Citi Dividend: Is the End of 5% Near?
Editor’s Note: The following info is oudated. For the latest details on the Citi Dividend Card, see this link.
Various message boards have been abuzz recently with rumors that the Citi Dividend card will soon no longer offer 5% cash back on supermarket, drugstore and gas station purchases. One such thread is on FW here.
Based upon several conversations with Citi CSRs, the general consensus is that changes are coming. And according to one poster who says that they have already received the new terms, they are:
- 2% for supermarkets, gas stations, drugstores, convenience stores and utilities including cable.
- 1% on all other purchases.
- Maximum of 300 Dividend Dollars in a calendar year.
- Utilities include electric, gas power, water supply and refuse services, but not telephone service. Cable includes satellite and other pay television and radio service.
The new terms should be mailed out to customers over the next month or so. If these new terms are indeed rolled out, it obviously represents a huge downgrade in benefits to existing cardholders. Then again, these type of changes should not be that unexpected, considering Citi was likely losing quite a bit of money on customers who only used the card for gas, grocery and drugstore purchases. It also follows Chase’s decision back in April to discontinue its own 5% cash back program.
The obvious question is what to do now. Already folks at FW have suggested the HSBC Direct Rewards Platinum Mastercard as an alternative. It offers:
5% CashBack at supermarkets, drugstores and gas stations. For other stores, 0.5% on up to $3K purchases, 1% for more. CashBack capped at $500 for any yearly anniversary period of the account. CashBack is paid annually, anything less than $10 is forfeited.
There are a few other potential downsides, including a reputation for low credit limits. Perhaps more importantly, one would almost expect that should HSBC receive a huge influx of new applications in the short-term, that these terms would be short-lived as well.
If Chase decided to “discontinue their 5% rewards program in April, why have I received 2 chase cards (Cash Plus Mastercard in May and Rewards Plus in August) that are both paying 5% on EDP? Just because the website does not have these cards does not mean that they are not available. Get your information straight.
Noorts,
Thanks for your comments. You’re right of course that I was imprecise in describing Chase’s offerings. What I should have said is that Chase has discontinued marketing the Cash Plus card.
Personally, I would take it as a sign of things to come, and would be reluctant to get the card now, with the expectation that those rewards would continue. Especially in light of the Citibank rumors.
It’s official. I just received their mail, stating that the 5% benefit will discontinue on October 13, and changed to 2%.
Thanks frugal. It’s now been confirmed in the Wall Street Journal as well.
Yea the credit card companies are getting jealous of the Oil company profits so they must do something (poor little rich guys). I say we all start using cash, stop buying stuff on credit, and quit buying gas. Fellow peasants revolt before it’s too late!
If Citi is changing terms for this 5% Dividend mastercard, they are keeping it v. quiet.
I applied online 2 weeks ago, received cards yesterday.
Citbank.com is still promoting on their website at:
” http://www.citibank.com/us/cards/cardserv/divplat/rebate.jsp ”
Would definitely be a bummer if they discontinue 5% just after I receive it.
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For existing cardholders, 5% cashback for supermarket, gas station, and drugstore purchases is replaced on Oct. 13 by 2% for supermarkets, gas stations, drugstores, convenience stores and utilities including cable. I checked my utilities – none of them accepts credit card payments for free – all charge fees of around $4 per payment. As for convenience stores, I do not shop there so often for this new feature to make any difference (I wonder who is…). Things definitely have not changed to the better with this card.