Had a Citibank card before? Citi changes rules for if you can get signup bonus again

Via Doctor of Credit, Citi appears to be changing its rules for welcoming back past cardmembers with a signup bonus.

You are now only eligible for the bonus if the card was not opened or closed in the past 24 months.

There appear to be a few card products showing the earlier 18 month language, which may not have been updated yet.

That’s an interesting change — they’re basically following Chase’s approach here (although not to the best of my knowledge also clamping down on approvals for the products themselves), and not going in the direction of American Express limiting customers to one bonus per card product in a lifetime.

Why do banks give out bonuses more than once?

Imagine a Citi AAdvantage cardmember who spends $30,000 a year on the card. She has an awful American flight, gets mad, and decides to cut up her card in protest, promising never to fly the airline again.

She keeps that promise for awhile, but finally relents and flies American. And realizes she really liked the perks of the card (like early boarding and free checked bags) and values her miles.

She sees an ad in American Way magazine and decides to sign up. She’s denied the bonus. Now she’s really mad. Why is a new cardmember, who never had a relationship with the bank, more valuable than she is — when she’s proven herself a loyal cardmember for years?

A customer who has shown loyalty to a product in the past is likely to be a better customer in the future, and a less expensive customer to acquire, than someone with no history with the card issuer. But that customer is told they’re less valuable than someone who has no history with the issuer.

But they don’t want to be too generous

Signup bonuses are expensive and only worthwhile to acquire customers who generate a certain level of revenue over a long period of time.

Naturally, some customers are gaming bonuses. When a card company is acquiring customers, they are acquiring good customers and also bad customers. What counts is the proportion — that the portfolio they’re acquiring is profitable. And it makes sense to try to optimize that, to make the portfolio even more profitable.

There’s a balance between not just wanting to hand out bonuses over and over, and attracting good cardmembers who are among a card company’s most likely pool of customers to bring onboard for a product.

Blunt instruments like “once in a lifetime” aren’t the way to do it, in my view. Instead, it would seem more effective to welcome back cardmembers who demonstrated profitability in the past, or have characteristics that make it reasonably likely they’ll be good customers in the future. I’m not sure tweaking 18 versus 24 months is a meaningful distinction here, but it’s a reasonable approach to test.

Since summer 2014 Chase’s generall approach has been to give a bonus again to people that do not currently have the card they’re applying for, and who have not received a bonus for that card in 24 months. Citibank now seems to be matching that.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This is different from Chase because you couldn’t have closed an account within the last 18 months either. Chase doesn’t give you the bonus if you’ve gotten the bonus within the past 2 years, they don’t (to my knowledge) care when you closed the account. I originally got the Citi Executive Aadvantage card in 2013 but closed it last year. I’ve been waiting for another big signup bonus to get it again, but it seems as though I’ll have to wait 18 months from when I closed it. I’d like to think I’m exactly the type of customer Citi wants; I hit the $40,000 spending threshold easily and do all my banking with Citibank. But I’m not going to spend $450 on a card that doesn’t come with a signup bonus.

  2. Do I have a legal argument with AMEX if I died of a heart attack but was then brought back to life by a defibrillator?

    Any attorneys want this case on a % basis?

  3. @Andrew: I get the feeling that Citi doesn’t enforce the “or closed” part of “opened or closed.” Perhaps others with more Citi churning experience can weigh in.

  4. Losingtrader I will take your case. Do you have preference how you die? I will take a smaller percent if you let me experiment.

    Standard disclaimer of course: no guarantees you will be revived.

  5. You ask “when she’s proven herself a loyal cardmember for years?” in the context of being a return customer.

    Reasonable question, but don’t forget this cardmember has proven themselves to be a disloyal cardmember recently too. Why should this hypothetical cardmember be told she is more valuable than someone who did not cancel at all?

    Canceling a card in the last two years is a negative signal that carries weight. And the banks are clueing in to it.

  6. About a week ago I applied for a Citi Hilton Hhonors Visa. Before applying, I checked to make sure I would be eligible to be accepted and was told I was eligible. This was true even though I currently have that card. The key thing was that I had opened the card more than 18 months ago. The person I spoke with said that I should not cancel my current card or it would start the 18 month clock again. I hope that helps.

  7. I’m a victim of Amex’s lifetime policy. When I called to switch my AeroplanPlus Amex to an SPG card, they convinced me to sign up for Premier Gold Rewards card.

    But silly me forgot to spend the minimum, and I never got the welcome bonus, and I ended up cancelling the Gold after 4 months. Now, I’m never eligible for the welcome bonus.

    Which is a shame, since the Premier Gold is a great card, and one I would have considered switching if/when it comes time to kill off the SPG card due to the Marriott merger. I’ll probably just switch to one of their no-annual-fee cards to keep my credit history with Amex active, but Amex won’t be the card I use for my primary spending anymore.

  8. Well, the banks have just made us less profitable clients, and they have only themselves to blame.

    The wife and I have been putting significant spending on every single one of our open cards, (even the “useless ones” like Marriott) in order to be considered demonstrably “good clients”, so we can get approved for more cards. And apparently they thought we were good clients, since whenever we call Customer Service they say something like “thanks for being such a good client for (5/10/20) years”.

    I thought we had a deal. They give us cards with good sign up bonuses, we spend significant sums on those cards for at least a year, (longer if they are no AF cards}, then we cancel them, and reapply. Rinse and repeat….

    Now AMEX is saying “nevermore” for cards we had in the past, Chase is rumored to soon never approve us for anything at all ever again, and Citi has cards with sky high AFs and no bonus whatsoever.

    So we have stopped the good client thing, and are only spending where there is a significant bonus, (grocery on Freedom right now), points are worth the cost (SPG miles to top off FF accounts), to meet minimum spend, or of course cash back (6% grocery with AMEX Blue Cash).

    The banks have stopped being loyal to us, and so we have stopped being loyal to them. I do note, ironically, as they make it harder and harder (in some cases impossible) to get approved, they have been forced to offer “highest ever” sign up bonuses to attract the few people left who can get approved for their cards. Apparently “market share” is no longer in their vocabulary.

  9. Anyone have recent experience with CitiAAExecutivePlatinum customer service?

    I have gone a few rounds with Customer Service regarding a ticket order where tickets were never provided. Vendor won’t respond to Citi, but Citi reversed the credit and now tells me I failed to return the tickets which were never provided, for a game which was never played. Tough customer service on a $495 card. And they claim there is no appeal.

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