When I went to pay my monthly balance I saw on the splash page that they have 27 different freakin’ cards! I took a casual look and they do indeed seem to be different, at least in name. I note that ten of them are cards they underwrite for other businesses like Macy’s and Home Depot. But still, 17 cards is a lot.
There are also the cards affiliated with airlines and hotels. The world has dozens of hotel chains and dozens of airlines. You know each airline has at least one card provided by some bank. Why not Citi? heck, American Airlines alone has 5 different flavors of Citi card. They (Citi) are in the business of creating credit cards. Mo’ kinds of cards are mo’ bettah for them.
They’re all the same basic credit product if you back off a few hundred feet; each just with a different assortment of “coupons” attached.
And there are cards for business, not consumer. And ,and, and.
I just checked. Chase offers 42 kinds. And each airline they work with has 3 or 4 or 5 kinds. Some hotel chains have 4 kinds too. It multiplies up quickly.
I guess I just find it surprising anyone is surprised that the largest banks in the country offers lots of kinds of affiliated credit cards.
Did you think Citi Bank only had two or three cards? They have a marketing department/organization that spends countless hours trying to find new ways to lure in new customers. Each card has slightly different perks, and some people are attracted by one perk but not another. They interview lots of people and find out what they are interested in in terms of features and perks and design a new card to suit them and others just like them. It obviously costs them something to launch a new card, but if they can get enough new customers it’s more than worth it considering what they charge for interest on unpaid balances. To put it bluntly, they wouldn’t have so many credit cards if it didn’t make smart financial sense to do so.
My Citi credit card was originally my Sears card. At some point the Sears card became Citi. I just went with it.
And going the other way, I’ve had a Shell gasoline branded card from Citi for ~10 years. Shell just moved their affiliate program to a different provider. So a new card and a new deal and a new place to send the money. Bye bye Citi.
I think the bottom line is the last 20-ish years in the credit industry has been all about loyalty cards. Whether from Amazon, Airline X, Hotel Y, or Disney, those non-bank corporations benefit when you have and use a card with their name on it. Even when you’re buying stuff from somebody other than them.
So the vast proliferation of kinds of credit cards is not about banks (card issuers) competing to offer different terms for credit itself. The competition is about the vastly larger number of big consumer-facing businesses competing with others in their industry to generate customer loyalty through branded credit cards.
And as we’ve just seen, those branded cards are not shy about changing their card-issuing bank if they think there’s benefit (for them) to be had from doing so.
Further, there’s a change of seasons working through this happy proliferation that may well kill the whole loyalty industry. And upend a few other mini-industries along the way.
The existing bargain that merchants just suck up credit card fees is breaking down. More and more merchants are charging 2-4% extra to use a card. Me buying everything on my e.g. airline card for “free to me” miles, now costs me more in incremental CC surcharges than the miles are worth in airfare. That’s a mug’s game.
There’s a lot of inertia out there, in me and millions (billions?) of other people. But if there doesn’t come a consumer backlash, or regulation (hah!), that prevents CC surcharges, real quickly the entire loyalty system will collapse in a very large cloud of dust and noise.
Or else the loyalty rewards need to get richer; a lot richer.
If CC surcharges become nigh universal, the only card I’d want then is a cash back card that reimburses me all of those surcharges or more. And if it’s less (darn good bet), I start to question using a credit card at all vs debit card or greenbacks. There is value to paying merchants on average 45 days late. But not more than WAG 0.75% worth.
The credit and consumer loyalty industry pundits have been talking about this for awhile now. Pressure is building and something is gonna give. I expect, like a dam bursting, there’s going to be a sudden stampede in some direction. Unlike a dam burst, it’s hard now to say which way the water’s gonna go.
Here’s further recent discussion on loyalty cards, points, and the coming crisis if anyone is interested in that topic.
Affinity cards lead also to some interesting reverse situations: same affinity, different bank. For example: JetBlue branded credit cards are normally issued through Barclay’s. HOWEVER! Because of peculiarities of banking/tax regs, Puerto Rico-based customers wanting to originate an account, even though PR’s part of the greater USA, must instead do so through Banco Popular. (And no, not the same terms, either.)
I’m not surprised at all by the affiliated cards. But they still have 17 cards with a Citi name with different financial scenarios for each one. From the Simplicity card to the Strata Elite. I’m really not surprised that they do that but they must think awfully hard to come up with each new card.
I seem to remember when my Sears card became a Discover card. I had no choice in the matter at all.