By Alexander Saeedy

Citigroup is launching a new premium credit card aimed at frequent travelers, the latest salvo in a high-stakes war among banks to win over affluent customers.

With a $595 annual fee, the Strata Elite card is Citi's answer to the JPMorgan Chase Sapphire Reserve and the American Express Platinum cards, which offer a bevy of rewards but charge higher annual fees.

While credit-card issuers have been backing off on opening new accounts for lower-income customers, competition for affluent customers has intensified.

Big spenders with high credit scores are attractive to banks because they are willing to pay steep annual fees and are less likely to default on their balances.

Banks also like these customers because they can be pitched on multiple accounts, mortgages and wealth services, providing steady fee potential.

Citi has been seeking to build out its credit cards as part of a push to compete with rivals that have a bigger footprint in consumer banking. Offering a premium card also dovetails with its attempts to build deeper relationships with wealthier customers.

To justify increasingly higher annual fees, credit-card issuers are dangling more specialized perks. The Chase Sapphire Reserve card, for example, now offers clients exclusive access to reservations at high-end restaurants through a partnership with OpenTable.

Citi says that the Strata Elite will launch on Monday and is for cardholders who want straightforward access to travel rewards, instead of the increasingly complex offers that require research to unlock.

"Some credit cards have gotten a little lost over time, and it's a shame, " said Pam Habner, head of U.S. branded cards at Citi and a former executive at JPMorgan and American Express. "Customers have told us that they're busy and don't want a coupon book of perks and benefits. We are going back to the core of what they want."

With the Strata Elite card, Citi will offer high rewards multipliers for certain categories of spending, including restaurants and food-delivery services on weekends. Cardholders also get a $300 hotel credit and a $200 "splurge" credit each year that can be used at American Airlines, Best Buy and a handful of other Citi partners.

Citi is also betting the card's $595 annual fee will give it an edge as the cost of premium cards keeps climbing. The Chase Sapphire Reserve card's annual fee recently jumped to $795 from $550, and analysts expect American Express to bump up the $695 fee for its Platinum card later this year.

Gonzalo Luchetti, head of U.S. personal banking at Citi, said credit-card issuers are learning they can charge more for premium cards without high rates of attrition.

"Pricing definitely has moved up over time, and people are willing to take on greater fees," Luchetti said in an interview.

Write to Alexander Saeedy at alexander.saeedy@wsj.com

(END) Dow Jones Newswires

July 27, 2025 09:00 ET (13:00 GMT)

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