Citi’s new credit card lets you round up points on small purchases — but is it worth getting?

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Citi is rolling out a new credit card that will round up the number of rewards points that consumers earn in an effort to get them to use their credit cards for smaller, routine purchases.

The Citi Rewards+ credit card














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 will launch on Jan. 10 and has no annual fee. The card has an introductory annual percentage rate of 0% for the first 12 months after opening the account on purchases and for balance transfers after the date of the first transfer. After that, a variable APR (between 15.74% and 25.74%) kicks in for purchases and balance transfers. The national average APR on rewards cards was 17.37% as of this week, according to CreditCards.com.

Here are the rewards consumers can earn with the Citi Rewards+ card:

  • 2 ThankYou Points for every $1 spent at supermarkets and gas stations for the first $6,000 in spending at those locations per year and then 1 point per $1 spent thereafter
  • 1 ThankYou Point for every $1 spent on all other purchases
  • Additional benefits include access to pre-sale tickets for concerts and other events, trip cancellation and interruption protection, car rental insurance, travel accident insurance and 90-day return protection, among other features.

The main draw of the card is that the rewards points earned will be rounded up to the nearest 10 points, so buying a $1 purchase will earn 10 rewards points rather than just one. Additionally, Citi is offering 10% back in points for the first 100,000 points that Rewards+ card holders redeem each year.

Also see: Citi prepares to relaunch its top credit card with focus on dining and travel rewards

The Rewards+ card currently comes with a sign-up bonus where consumers can earn 15,000 points after spending at least $1,000 in purchases within the first three months of opening the card.

Altogether, the card appears to be a replacement for the Citi ThankYou Preferred Card that Citi took down a couple weeks ago, said Brittney Mayer, credit strategist at CardRates.com. And it seems to be designed to appeal to consumers who make frequent, small purchases, such as buying lunch daily. “The Rewards+ card will likely be a popular choice for consumers who make frequent small purchases, like daily visits to the local coffee shop, as well as those who make a lot of smaller purchases that don’t often fall into bonus categories, such as some subscription services,” Mayer said.

Citi pointed to a survey of 1,000 adults it conducted that found consumers make 14 routine purchases a week on average, but less than a third of them use a rewards credit card for those transactions. Chris Fred, head of proprietary products at Citi Cards, said the new card “truly turns everyday purchases into something bigger.”

Why consumers may not want to get this credit card

Consumers could benefit from incorporating this card into a broader rewards strategy. “This is a nice pair to Citi’s Double Cash card,” which offers double points on all purchases with no cap, said Brian Karimzad, co-founder of personal finance website MagnifyMoney. “Use that for everything but purchases under $5 and this for the small purchases under $5.”

For consumers who want to open only one rewards credit card, the Rewards+ card may not be the best one because the rewards rate on the Rewards + card pales in comparison to similar offerings.

The American Express Blue Cash Everyday card














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 earns 3% back on supermarket purchases up to $6,000 and 2% on gas. And the Costco Anywhere Visa card














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 from Citi earns 4% cashback on gas, 3% cashback on restaurants and certain travel purchases, 2% back on Costco purchases and 1% on everything else. Even the Citi Double Cash card might be a better fit for some, even though it doesn’t have the round-up option, because it comes with no rewards cap. These three cards all come without annual fees, though the Costco card requires membership to the warehouse club.

And other cards have better sign-up bonuses, said Ted Rossman, industry analyst at CreditCards.com. For instance, the Wells Fargo Propel American Express card














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 has a $300 bonus, while the Bank of America Cash Rewards Card














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 has a $200 bonus.

Moreover, the round-up bonus is somewhat diminished by the value of the rewards points themselves. For instance, while a $1 purchase will earn 10 points with the Citi Rewards+ card, those points are only worth 10 cents when redeemed. “You’d have to make a lot of small purchases to even begin to notice,” Rossman said.

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Source : MTV