Citibank Kills their 5% Dividend Card?

cardhold.jpgAlas, could it be true? I was alerted two days ago that you can no longer apply for the Citibank Dividend card which is one of my favorite rewards cards. If you try to apply, you get this:

Changes are underway to the Citi Dividend Card, so we are unable to process your application at this time. Please check back soon for more details…

At first, I thought “no big deal, probably just temporary”. But according to commenters, Citi says that the card is discontinued and there are currently no more straight cash-back credit card options. No more 5% back!! I would be more distressed, but I just switched over to the Citi Driver’s Edge Card which gives 6% back on gas, groceries, and drugstores for a year, but it’s via car expenses or their ThankYou points. Instead of going for the tires though, I may just cash them out for gas cards for the convenience. After that, looks like I’ll have to start looking for another card…

Comments

  1. By the way, that’s supposed to be a bullet hole through the Dividend Card. What can I say, it’s Friday ;)

  2. John Wilks says:

    That’s horrible. I just applied for that very card 1 week ago. I should get a response in the mail soon. Does that mean they hard pulled my credit, I wont get the card, and I have to apply for something else (meaning 1 more hard pull)??

  3. Over at Fatwallet they are reporting now that it is going to switch to 2% back on gas, groceries, drugs plus more things like utilities and convenience stores. Which is useless to me since I already get 2% back on those extras, but maybe will keep some other customers happy.

    My initial thought was that they are going to move everyone onto the ThankYou points system. Citi hasn’t contacted existing users yet, so we’ll see.

  4. John Wilks says:

    I’d rather get 2% back, then points. And utilities might work in my favor too. All I hope is that I get it without another hard pull.

    Are there any 5% back gas cards still in existence.

  5. I guess I’ll be moving to the Citi Driver’s Edge card soon, since my 1 year on the Citi Diamond Preferred will be up in October. I am glad that I moved to the Chase Rewards Card when I did, since they will probably follow suit shortly.

  6. I wonder what will happen to my current cashback balance. I hadn’t quite reached the minimum to cash out yet. I expect to see more rewards cards get worse. The media alerted the masses..now that everyone signed up, time for the bait and switch!

  7. I don’t see American Express mentioned much on this blog, but for the last 6 months, my wife and I have been using the AMEX Blue Cash credit card. It’s 5% cash back at:

    -drug stores
    -grocery stores
    -gas stations

    And 1.5% back on all other purchases.

    Minimum yearly usage is 6500$, with the benefits capping at 50k$.

    Blue Cash Rewards info page.

  8. The problem with the Blue Cash is you get a low 0.5% cash back on all purchases and 1% cash back on gas/groceries/drugs on the first $6,500 even if you spend more than that (only purchases over $6,500 get the higher rate, it doesn’t apply to for all purchases). That’s a lot of lost potential rebates.

    If the Dividend card does go away, it may be a good card for high annual spenders – like over $20,000 a year?

  9. Upon further thought, if you could strategize it to buy $6,500 of non-gas/groc/drug first to get over the 1st tier, then the hit might not be so bad. Versus a 1% card you’d lose $32.50 and versus a 2% card you’d lose $97.50 of potential rewards, but you’d get 5%/1.5% after that. But if you spend that first $6,500 on gas/groceries, you’d lose close to $300.

  10. Well, some recent articles on newspaper have been saying that people are getting smarter and more people are paying off total balance every month vs. paying only the minimum payment. This new trend is causing a dramatic profit reduction for the entire credit card industry.

    The interesting thing, though, is that it’s not the consumers are becoming frugal and orgnized. Their spending habit haven’t changed a bit. The only difference is that mortgage loan is cheap (6% vs. credit cards’ 21%), and home equity is going up like a grass fire. So all of sudden, a lot of people found that they are sitting on a big pile of case (their home), and they were able to borrow home equity loans and pay off their credit cards all at once.

    So, I assume the condition will change when the housing market cools down. Imposive buyers will go back to credit cards when they failed to sell their expensive houses…

  11. I have fidelity mastercard which gives 2% cash back on every purchase. I guess I’ll use more of it.

    Is there any other 5% cash back card similar to citi dividend card?

  12. does that mean if you own the card you don’t have that 5% anymore?

  13. This is one of the saddest days in my life. I loved getting checks for 50 bucks every other month.

  14. Ashley Barton says:

    What about the Direct Rewards MasterCard from HSBC? Wouldn’t this be a suitable replacement? You only get paid annually rather than once you have a $50 balance, but it’s better than a 2% reduction.

    http://www.directrewardscard.com/

  15. That really stinks for those who were considering applying. I just really hope that they don’t do anything to change the program for current cardmembers. In fact, they did something today for me that left me very happy. I got a letter in the mail saying thank you for being a customer and giving me the opportunity to call and make any changes to the account that I would like. I called the number (866-706-5826) and they went through some offers like a low rate balance transfer, lower my APR, change my due date, etc. When I stated that none of those really interested me, the next offer was to give me 5% cash back on restaurant purchases for the next 6 months, in addition to my current 5% cash back on groceries, gas, and drug stores. I jumped on this one, especially since we are guilty of eating out a lot. No mention was made of the program possibly ending, so I hope this isn’t the case. I included the toll-free number in this post in case anyone is interested in trying to call and get the same deal for themselves, but I’m not sure if it’s something that you have to receive a special invitation for or not.

  16. I got a letter from Discover that they are discontinuing the Gas card (5% back) and giving me a Velocity card. Yet on the website it still shows a Gas card and no Velocity card in site… =(

  17. Wait, I tried to apply for a Discover Gas Card and it now shows Velocity and Octane as choices. Maybe they are just going on a weird naming phase for their Gas Cards.

  18. The 6% you are talking about though is only for 12 months, so it would be nice if you edited that part, because I’d hate to have gotten this credit and not notice it’s only for 12 months.

    If you want the 6% you might as well get chase’s credit card that hasn’t expired and the first 6 months you get 6% and then after that as far as I’m aware it’s like citicard’s plus there’s a higher limit than 300 dollars. Plus here’s a 50 dollar bonus
    http://home.earthlink.net/~gerrety/images/FlexRewards.jpg

    I don’t have this card though, I’ve opened too many credit cards lately and I’ll wait for the notice of them not giving me 5% cash back. I only use it on gas also, since I shop at a place that’s probably 10% cheaper than most grocery stores and get the 2% back there with the fidelity card.

    I’m carrying 3 cards now
    5% for gas, 3% for resturants and 2% for everything else.

  19. Interesting thoughts.

    Out of curiosity, I did some math on the past month of my spending on my amex blue cash card, to see how I do over the course of a year, assuming this past month is indictive of how my wife and I normally spend (which, I would say is a decent assumption based on the last month’s expenditures for me).

    $2575.00 total spent total,

    24.95% in groceries and gas (all of which would qualify for higher rate),

    75.05% on everything else.

    So, for the first 6500:

    ((6500 * .2495) * .01) = $16.22 rebate.
    ((6500 * .7505) * .005) = $24.39 rebate

    For the following 6500.01 up to my total for the year, $30900 (which is 2575*12).

    (((30900-6500) * .2495) * .05) = $304.39 rebate
    (((30900-6500) * .7505) * .015) = $274.68 rebate.

    Total cashback on these numbers: 619.68, which is exactly $1.68 over a 2% rebate on 30900 (30900 * .02 = 618). Huh. That’s kinda freaky. Just for informations sake, if you spend the full amount, 50,000, at the same rate (25 higher/75 lower), you’d be up to a 2.144% rebate overall.

    Obviously, the rewards here are potentially alot more lucrative if you put some thought into it (which I hadn’t been, bit certainly am inspired to now), as Jonathan highlighted above.

  20. Dang it, there’s a flaw in the math, my qualified expenditures is actually higher than 25%, probably closer to 35%, because I totally forgot that I can’t put my rent on my AMEX (how nice would that be :p).

    Nevertheless, assuming the math still shows how the rebate turns out if you spend at a 25/75 ratio, the rebate slowly improves as you get closer to 50/50.

  21. Sad day. This was my first card that I received freshman year of college. Hopefully Citi will keep 5% back in the form of TY points.

  22. I noticed when I logged into the Citicards website today that up at the top where you pick which card you want to work with, it now just says “Citi Mastercard” and I am pretty sure it used to say “Citi Dividend Mastercard.” It still looks as though I am accumulating awards though (yay just got over $50 again too!)

    Interestingly enough, my Amex Dividend card also through Citi still says Dividend.

    I will be heartbroken if these cards go away as I have been using them to full advantage for almost a year and they have yielded more rewards than other rewards cards I have used in the past (Discover and National City Everyday Rewards Visa – both of which are tiered so you don’t make jack for your first 10 grand spent or whatever).

  23. Chase has an almost identical card to the Citi Dividends card. Its called the Cash Plus card and it pays 5% on gas, groceries, and drug store purchases and 1% on everything else.

  24. I have a citi Divident AmEx card and I just called them. They were extremely vague and didn’t really want to say what is changing but I managed to squeese “nothing is changing on the Amex Divident cards, just on the straight citi Divident cards”. The guy was extremely reluctant to talk about it and wouldn’t even answer a YES or NO questions. He just kept saying “I am not authorized to say what is changing!” So what the hell does that mean?

  25. I just spoke with a Citibank customer service rep and he said “The Dividend Card is not being offered at this time.” Suggesting that it will be offered again shortly. Whether the 5% is gone or if they are moving to the ThankYou Network, who can tell. The guy flatly said “I don’t have any more information at this time.” Of course I just applied for this card. 6% Drivers Edge card for a year seems like a good second choice. Although the Citibank rep didn’t have the same offer as the website. It was only 1% over the phone. No good.

  26. I don’t think it will affect current holders of the card. Maybe they will not renew it though after the current card expires. Here’s to hoping nothing will change…

  27. Driver’s edge’s 6% sounds tempting. But I dont have the time or inclination to send them my new vehicle purchase or vehicle maintainence records. I liked didvend’s flat cash payout. I received $328 a few months back from dividend rewards – although even that seemed to be a hassle since I had to call citibank to send me check. Why cant they do something like discover card – where you could just apply the rewards towards your next credit statement ? (although discover sucks in terms of % reward they give, along with a lot of gotchas).

    I’ve sent rebate papers for my driver’s edge card (I have once since 1999), but I definitely dont enjoy it. If I get my rewards for this, I’ll just close my driver’s edge account after it. BTW do driver’s edge proponents here realize that they have to send paperwork of car to citibank within 90 days of buying car or having service on it? After 90 days citi will not honor it.

  28. Re: Matt

    I just checked my statement as well, and my Citicard still says “Citi Dividend Platinum Select Visa Card” (with (R)s in there somewhere). I was going to switch over my Mastercard too but I never max out my total reward for the year with Visa (still a student, but its pretty much the only card I use except every once in a while to keep my MasterCard working)

  29. Chase’s similar Cash Reward Plus whatever will most likely be phased out too.. you cant apply it via their site anymore, although there are links that take u to the application page.

    discovery’s 5% gas is only 5% for first $1,200… gas purchase exceeding $1,200 is at a meager 0.25% or something. bah.

    such sadness. I just finished paying off my dividend card’s BT too. was looking forward to $300 back per year. ah well, might hop on the fidelity 529 card.

  30. Justin Andringa says:

    Just looked at Fat Wallet, there are a few members who have received letters. It is 2% back on gas, groceries, drugstores, convenience stores, utilities, and cable. 1% on everything else, $300 annual cap still. This marks the end of this card. I would now recommend either the Chase Cash Plus card, which there is a link on Fat Wallet to apply for cuz’ it isn’t on the Chase website. Otherwise, you can try to apply for the HSBC Direct Rewards card, at directrewardscard.com. It is also 5% back on gas, grocery and drugstore, up to $500 per year, paid on your anniversary date of the card.

  31. Bankrate.com says that is a Direct Merchants Bank card, not a HSBC one. And I tend to agree, since there is no trace of it on the official HSBC site.

    While I like the 5% part, I don’t want a relationship with an unknown lender.

  32. Thanks for the heads up, Jonathan. I can’t believe how on top of things you are! I think we’ll just all have to wait and see how the domino effect affects other similar cards and then see how the dust settles.

  33. Looks like I’m going to stop using my dividend card now. Today I received a letter in the mail saying that it’s changing to 2% also for everything, but they are including utilities. I’m already getting 2% back for fidelity’s 529 credit card.
    Looks like I’m going to start to use citicard proffesional more as it’s at least giving me 3% cash back at gas stations.

  34. Mistake on my behalf. I never noticed, but the chase is only a year introduction. I don’t like wasting my time with 12 months only to be honest.

    Looks like this card is one of the more favored cards that I can see with 5% cash back on gas, which is the important one for me:
    http://www.directrewardscard.com/
    Thanks for posting it, I don’t see any thing worse about this card than the citicard dividend one I was using before. It doesn’t seem like any introduction rate, except they pay you back at the 1 year mark, but there’s a 500 dollar limit, which is higher.

    Thanks for posting it Ashley

  35. Ervin, regarding this new card’s affiliation with HSBC, it is clearly stated on the directrewardscard.com page:

    “Direct Rewards MasterCard is issued by HSBC Bank Nevada, N.A.”

  36. This is just a thought (a guess really), but maybe they will re-offer it once gas prices go down. I have to imagine that when they introduced this card, the models they used had something like $2/gallon gas, not $3-$4. While the cap protected them to some extent, I’m sure they were paying a lot more than they expected to the people who didn’t know how to efficiently use their credit cards (where they make their money on i%).

    Just my $0.02.

  37. I have this card as well, I just started using it after using Blue Cash as my exclusive card last year. I racked up an average cash back return of 1.68% on the Blue Cash on $22K of spending.

    I just had Citi Retention give me favorable terms a couple of weeks ago – 5% on gas/groceries/drugstore and 2% on everything else for 3 months. Hopefully they will honor that and don’t change it. If they do change it, I guess I’ll have to switch back to Blue Cash. I just dislike the tiered structure though.

  38. Citibank…its official….just got a letter stating that they are reducing gas, grocery etc to 2%

  39. How could this happen to me
    I made my mistakes
    I?ve got no where to run
    The night goes on
    As I?m fading away
    I?m sick of this life
    I just wanna scream
    How could this happen to me

  40. Got the letter today. Dooms day is Oct 13th. Buy all the gas and groceries you can before then.

  41. Jon in NYC says:

    The Wall Street Journal published an article on the change today. I read it here four days ago. Congratulations on your scoop.

  42. Hi everyone, I am new to the site but I have been using credit card balance transfers for at least 7 years…so I am used to fine print on credit card applications. I will probably stop using my Dividend card this week and apply for the Direct Rewards Card, however there is one caveat about this card:

    The fine print says that you get 5% for groceries, gas, & drugstore purchases but you only get .5% on other purchases until you get to $3000 in purchases, then you move up to 1%.

    I would recommend people use another card for all other purchases to get at least 1% on everything. You have a great site, Jonathan!

  43. Thanks Vanya about telling us about the fine print. I actually was going to apply for this card, but haven’t gotten around to it. I was planning on using my fidelity card at 2% for everything else, but it’s good to know that you don’t get 1% until you’ve reached 3,000 dollars. Going to use this card only for gas, drugs and groceries when I finally get around to applying for it.

  44. moneyminded says:

    For those of you who may have recieved an invitation letter from Citi, make sure to take advantage of it.

    I got a letter from Citi on how to make the card better. In light of recent events with the card you should call 1-866-754-6870 to activate the options for your last great spin with Citi Dividend.

    The letter gives you 3 options. 1. A reduced APR – they offered me 6 months at 2.99%. 2. The 5% purchase rate was extended to ALL purchases for 90 days and 3. The ?Thank You? Network options were enhanced too. Not sure how, was not interested. I chose the 5% for all purchases for 90 days. I thought the option would start from the time I accepted the invitation (the end of July) and go on for 90 days. Well when I called to confirm my activation date so I could time my purchases, I was told the 5% applied to purchases starting in the beginning of July. In light of the discontinuation of the card I am sure they did that to make sure I get to use the card at the invite rate before the October 13th cut off, otherwise my invite rate date would have ended around October 24th.

    The letter had nothing to do with notifying you about the change of the rate. In fact that letter gave me a false sense of security about the Citi Dividend. I have not received notification yet of the changes. I have noticed that the card was no longer on the Citi website or other credit card websites recently. Also noticed that I have not seen ads in the Sunday paper for a few weeks. All good things must come to an end.

    Get what you can while you can. Hope this helps.

  45. The offers in those letters are “by invitaton only” I tried the phone provided by Camilla earlier and what they do is they plug your name and zip code and if you are not in the system they can’t give you any benefits. :( I even tried to call customer service and request a “benefit” like 5% on all other purchases but they said ” Sorry, we don’t have that offer available”

  46. 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.

  47. I am leaning towards the Chase Speedway Card, 8% first 60 days and 4% after that, since I buy 80% of my gas at Speedway anyway.

  48. savingeverything says:

    Strange. It is August 2007, and Citibank still has the Citi Dividend Card available for new applicants. I’m not sure if they’re really discontinuing it. Are they?

Speak Your Mind

*