This Citi offer is no longer available. The information below is for reference purposes.
For decades Citibank has been synonymous with MasterCard, so why in 2014 is it the Citi Dividend Visa? And is it better or worse than the previous version?
You see up until a few years ago, banks were not allowed to issue credit cards under both payment networks. For example, Bank of America was a member of the Visa network – and hence – all the cards they issued were Visa.
However lawsuits and litigation during the last decade changed all that. Now banks can – and sometimes have to – issue cards from multiple payment networks.
And that brings us to the Citi Dividend Platinum Select Visa (which was formerly a MasterCard).
The 411 on the rewards
Those generic bullet points used in advertisements don’t always tell you much, so let me explain in depth how the rewards program works.
5 percent cash back on quarterly categories of spending – As you may recall, 5+ years ago the Citi Dividend card gave 5 percent and then they ended it around ’06 to ’07 (I don’t recall the exact year).
Well back in 2011 Citi brought back the 5 percent. So far some of the categories they have offered each quarter consist of department stores, hotels, healthcare, and more. During any given quarter there are typically 2 to 3 types of spending that can qualify for the 5 percent cash back.
The downside is that some of the categories have been disappointing. For example, “health clubs” has been a category in the past and popped up again for the first quarter of 2014. But how much do we really spend there in three months? Not enough to make their card worth using.
This is why I prefer the Discover it® – New! Double Cash Back your first year card. The 5 percent program is superior:
1 percent cash back on everything else – You get 1 percent on eligible purchases.
The rewards cap is different than most competing credit cards on the market. With something like the Chase Freedom or Discover it® – New! Double Cash Back your first year, the amount of category spending eligible for 5 percent is capped – $1,500 per quarter.
However the Citi Dividend Platinum Select structures it differently: rather than a quarterly cap, there is a yearly cap. Between your 5 percent categories and 1 percent on everything else, you can earn up to 300 Dividend Dollars ($300 cash back) during any calendar year.
The biggest advantage here is that it allows you to milk your 5 percent without worrying about maxing out. For example during Q1 of 2012 healthcare was a 5 percent category – let’s say you had to get a root canal and dental implant that cost you $4,000. You would be able to earn 5 percent on that full amount, instead of just the first $1,500.
Obviously you can see why even if you have those other 5 percent cards, the Citi Dividend Visa fills a unique void. But with some of the spend categories being less than optimal, there may be better choices in the cash back market.
The benefits reviewed
This credit card comes with a few nice perks:
- Extended Warranty: For eligible purchases with a manufacturers warranty of one year or less, Visa will provide extended coverage of up to 1 additional year free of charge.
- Trip Interruption/Cancellation Coverage: You will see this on some fee-based cards, but it’s rare to find it on a no-annual-fee credit card. You get up to $1,500 in coverage with this benefit on eligible travel.
- Lost Luggage Coverage: For checked luggage on common carrier travel (such as airlines) you get up to $3,000 in coverage if they are lost/stolen/damaged.
- Price Protection: The number of credit cards on the market that include this I can count on one hand, maybe two. It will pay the difference under some circumstances if the advertised price of a purchase drops within 60 days. The drawback is there are a lot of fine print restrictions so it’s not the most useful benefit, but still better than not having it at all.
- Retail Purchase Protection: If you have an American Express card, then you may be familiar with this. Citi’s version for their Platinum Select Visa card is similar: up to $1,000 in coverage for 90 days after purchase in the event of theft/fire/accidental breakage on qualifying items.
- Common Carrier Travel Accident Insurance: This pays out for death/dismemberment during common carrier travel accidents. Odds of using it of course are quite slim, but it doesn’t hurt to have it.
- Car Rental Loss & Damage Insurance: Keep in mind this is secondary coverage and you will have to decline the rental car company’s collision, loss/damage waiver.
- Travel Emergency Assistance Hotline: You can call this number up anytime you need info/advice for emergencies, ranging from lost passports to locating a doctor or clinic in a foreign country.
Note: Check with Citi for the rules and restrictions surrounding each benefit.
Yes or no?
The benefits and rewards are equal to the predecessor version. The real drawback (with both the old and new) is that there is a $300 cap per year on the rewards. But when you consider that:
$300 = 1 percent of $30,000 in normal spending
$300 = 5 percent of $6,000 in category spending
The chances of you maxing out are unlikely, especially if your spending is spread across multiple reward credit cards. And being that the Visa Dividend Platinum from Citi has no annual fee, it might make sense to add it to your cash-back card arsenal. But I certainly wouldn’t make it my first choice. You can do better with other cash rewards programs.
This post was written or last updated August 13, 2015