Citibank eyes card fees
Citibank Thailand has offered extra privileges to targeted cardholders to make them feel they get value from paying an annual fee.
The move is aimed at boosting fee income after interest income faced a slowdown as more cardholders chose to pay off the full balance rather than the minimum instalment.
Tearavath Trirutdilokkul, head of credit payment products, said yesterday that the economic situation is also influencing customer behaviour. About 70-80 per cent of the bank’s cardholders pay the full amount.
The quality of debt is improving as cardholders become more disciplined, but that also reduces interest income, so the bank must find income from fees especially from premium cardholders such as those holding a Citibank ultima credit card, which charges an annual fee of Bt30,000. Ultima cards show monthly spending of Bt400,000.
More privileges should be offered for customers who are willing to pay an annual fee. Select credit-card holders is another focus. They have to pay an annual fee of Bt5,000. Their spending is about Bt50,000 per month.
The spending gap between select and ultima should be filled with the new segment and the attractive privileges to increase spending and fee income.
Citibank Thailand and partner Thai Airways International are launching a co-branded credit card called Citibank Royal Orchid Plus Preferred to offer more benefits to their customers and stimulate both spending and the travel industry.
These cardholders must have annual spending of Bt1 million.
Co-branding is expected to draw 5,000 new cardholders, of which half are select holders upgrading to the preferred card and half are Royal Orchid Plus silver cardholders upgrading to the preferred card.
The Citibank Royal Orchid Plus credit card has the highest spending among co-branded credit cards. Over 40,000 Citibank Royal Orchid Plus cards have been issued.
Co-branded cards account for 40 per cent of the total 1 million credit cards.
Spending was more important than the number of cards.
In the first nine months of this year, credit card spending of Citibank Thailand grew by 20 per cent, higher than the 18 per cent of the industry. Total monthly spending is Bt10 billion.
Next year is expected to be brighter than this year thanks to 3G cellular networks, which will boost spending on smartphones and IT products.
