Citi Launches New 5% Cash-Back Credit Card

The Citi Custom Cash Card rewards you on your top spending category each month

On June 10, Citi launched a brand-new credit card to compete with the small contingent of cards that offer rotating bonus rewards categories. Like the Chase Freedom Flex and Discover it Cash Back, the new Citi Custom Cash Card offers 5% cash back on select categories, but the categories are slightly less arbitrary than those of its competitors. 

Key Takeaways

  • The Citi Custom Cash Card is the bank's answer to rotating cash-back credit cards that offer 5% cash back on select categories of the bank's choosing.
  • Cardholders can enjoy a little more flexibility with the new Citi card over similar cards, but there are still limitations.
  • Other benefits may make the card a decent alternative to the Freedom Flex and Discover it, depending on your spending habits.

How the Citi Custom Cash Card Works

The new Citi Custom Cash Card offers 5% cash back on up to $500 per month in purchases made in your top spending category from the following list: 

  • Restaurants
  • Gas stations
  • Grocery stores
  • Select travel and transit
  • Select streaming services
  • Drugstores
  • Home improvement stores
  • Fitness clubs
  • Live entertainment

Unlike the Freedom Flex and Discover it, the Custom Cash Card doesn't rotate bonus categories every few months, and it doesn't require you to activate your bonus every quarter. Instead, it offers its impressive cash-back rate based on how you spend your money, albeit with some limitations. All other purchases will net you just 1% back.

While it'd be difficult to spend $500 per month on some of the card's bonus categories—such as streaming services and fitness clubs—it may be easy to max out the bonus every month at grocery stores or restaurants, depending on how you spend your money.

While the card is technically billed as a cash-back credit card, you'll actually earn your rewards in the form of Citi ThankYou Points, which is similar to how the Chase Freedom cards work. This gives you more flexibility than if you were to earn simple cash back because the points can be of greater value if redeemed, for example, for travel.

The card also offers an introductory 0% APR for 15 months, after which the APR jumps to the card’s ongoing variable rate, which is based on your creditworthiness. New cardholders will also get $200 cash back—or 20,000 points—when they spend $750 in the first three months from account opening.

Should You Apply for the New Citi Card?

The new Citi Custom Cash Card is a solid alternative to the Chase Freedom Flex and Discover it Cash Back, especially for credit card users who prefer ThankYou Points. The $500 monthly spending limit may seem low, but it lines up with rotating cash-back credit cards, which limit bonus rewards to $1,500 spent per quarter. 

Also, the $200 bonus is in line with some of the best cash-back credit cards that, like the Custom Cash Card, don't charge an annual fee.

If you plan to apply for the new card, consider pairing it with another card that offers a better base rewards rate. For example, you might use the Citi Custom Cash Card to max out its 5% category, while using the Citi Double Cash Card, which offers a flat 2% back on everything, for all of your other purchases. That will make it easier to maximize your rewards across the board.