Co-branding has been slowly disintegrating with the rising tide of convenience users and the challenges of deteriorating credit quality. The pace of dismantling such programs will now accelerate with the upcoming announcement that Citibank and Ford are throwing in the towel. Effective January 1, 1998 the ‘Ford Citibank Card’ will no longer earn Ford rebates on purchases. In notices to cardholders, over the weekend, Citibank says “Ford has decided that giving rebates on credit card purchases is not as effective in marketing cars and trucks in 1997 as it was in 1993 when the program was launched. The decision to discontinue the program will let Ford use the resources that would have been required to continue the program for other marketing initiatives in support of Ford Motor Company brands.” While Citibank and Ford do not disclose financial data on the program the latest research indicates the program has accrued about $5 billion in rebate liability and that approximately 600,000 cardholders have redeemed a rebate. There are an estimated six million Ford/Citibank accounts in the U.S.
Cardholders will continue to earn ‘Ford Rebates’ on purchases until the end of this year and will have five years to redeem the rebates provided their account remains open and continues to comply with the cardholder agreement. Under terms of the program Ford rebates expire five years from the calendar year in which they were earned. Cardholders opting to close the Ford card account or convert to another Citibank card will have 45 days from the closing or conversion to redeem the rebates.
Citibank indicated it has no intentions of changing card pricing.
Ford and Citibank said today that as of January 1, 1998, Ford Citibank cardmembers will no longer earn Ford rebates on purchases made using the card. Cardmembers will continue to earn rebates for all purchases made using the card through December 31, 1997 and will have five years from the end of the year in which the rebates were earned to redeem them for a qualifying Ford, Lincoln, Mercury or Jaguar vehicle as long as they continue to be Citibank cardmembers in good standing. Cardmembers will be notified directly about the changes made to the program.
Cardmembers can continue to use their Citibank card after January 1, 1998. Ford and Citibank value their customers and will fulfill their obligations for the duration of the program.
Letter Sent to Cardholders
We’re writing to let you know ahead of time about an important change to your Ford Citibank Card.
Starting on January 1, 1998, using the Ford Citibank Card will no longer earn Ford Rebates on purchases. Please note that everything else about you Ford Citibank Card will remain the same, so you can continue using your Ford Citibank Card as you always have.
We know that you’ve just recently become a Ford Citibank Cardmember and would like to earn as many Ford Rebates as possible. SO please be assured that all purchases made through the end of the year will continue to earn Ford Rebates good towards the purchase or Red Carpet Lease of a new Ford.
Here are the details of the changes to the program:
Your purchases on the Ford Citibank Card will continue to earn Ford Rebates through the end of the year.[EM1][EM2](1)
All your Rebates will be fully redeemable for a minimum of 5 years from the date they were earned(2), provided this Ford Citibank account remains open and you make at least your minimum monthly payment by each statement due date.(3)
Your Annual Percentage Rate and your credit line will remain as competitive as ever.
All other features and benefits will continue as before, with no annual fee.
We regret the change in the program, and want to secure you that you will receive the full value of all the Ford Rebates you’ve earned and will continue to earn through the end of 1997. To check the balance of your Ford Rebate account, please look on your monthly statements. We at Citibank are currently hard at work developing benefits and services that will continue to give you added value for using your card.
For additional details about changes to the Ford Rebate program, please see the enclosed Question & Answer brochure. If after reading it you still have questions, fee free to call us 24 hours a day at 1-888-639-9716
Once again, we appreciate your cardmembership. Thank you for being a Ford Citibank Cardmember.
Thomas W. Jones T. J. Wagner
President and CEO VP Customer Communications
Citibank (South Dakota), N.A. Ford Motor Company
P.S. Remember, you still have until the end of the year to earn Ford Rebates, so be sure to keep using your card everywhere you shop. And especially at Hertz and Texaco where you can earn promotional Ford Rebates that can bring your total well above the annual limit of $700.
(1) Ford Rebates are not earned on returned purchases, cash advances, transferred balances, fees and finance charges. Ford Rebates are subject to a maximum of $700 over 12 consecutive months, for a total maximum Ford Rebate of $3,5000 over five consecutive years.
(2) Ford Rebates will now be redeemable for five years from the end of the calendar year (instead of the calendar quarter) they were earned. So Rebates earned in May of 1994 will not expire until December 31, 1999.
(3) Ford Citibank accounts closed or converted to another Citibank card are issued a Ford Rebate Certificate which will allow you to redeem your Ford Rebates within 45 days from the date of closure or conversion.
The Ford Rebate Program
Questions & Answers
Q: How do I redeem my Ford Rebates?
A: Ford Rebates are redeemed as they always have been:
1) Visit your Ford dealership and make your best deal on the purchase or Red Carpet Lease of a new Ford car, van or light truck with the salesperson.
2) Tell your salesperson you are in the Ford Citibank program. You and your salesperson will then the Ford Rebate Center to verify your account.
3) The Rebate Center will provide an authorization number right away.
4) Your salesperson will them apply your Ford Rebates.
The minimum amount of Rebates your can redeem is $50.
Q: What about Promotional Rebates earned at Hertz and Texaco?
A: You can continue to earn a 5% Rebate plus a 5% Promotional Rebate at Hertz and Texaco until December 31, 1997. These rebates can be in addition to your $700 yearly/$3,500 five-year rebate earning cap.
Q: Why is the Ford Rebate earning feature ending?
A: Ford has decided that giving Rebates on credit purchases is not as effective in marketing cards and trucks in 1997 as it was in 1993 when the program was launched. The decision to discontinue the program will let Ford use the resources that would have been required to continue the program for other marketing initiatives in support of Ford Motor Company brands.
Q: Will this affect my Annual Percentage Rate?
A: No, we are pleased to say that your Annual Percentage Rate, credit line, and minimum monthly payment calculation will all remain as competitive as ever. There will continue to be no annual fee for the card.
Q: Will I still receive all the other benefits of my Ford Citibank Card?
A: Yes, absolutely. You will continue to enjoy all the convenience and security features of Citibank cardmembership, such as:
The Citibank Photocard. Your photo and signature on the front of your card make if difficult for anyone else to use your card.
Fraud Early Warning protection. If we notice any unusual activity on your account, we may call to make certain that the charges are authentic.
Exceptional Customer Service 24 hours a day to help with virtually every aspect of your cardmembership.
Credit line increases based on periodic account reviews.
Easy access to the cash advance portion of your credit line.
Q: Can I continue to use my Ford Citibank Card after the program ends?
A: Of course. You are a valued cardmember and you can continue to use your card beyond December 31, 1997 and receive the same high-quality service you receive today. You Annual Percentage Rate and credit line will not be affected by this change.
Q: When will I stop earning 5% Ford Rebates on purchases?
A: You will continue to earn 5% Ford Rebates on purchases until December 31, 1997.
Q: What happens to the Ford Rebates I’ve earned?
A: The Rebates you have already earned will be fully redeemable toward the purchase or Red Carpet Lease of a new Ford, Lincoln, Mercury or Jaguar car, van or light truck for five years from the calendar year in which they were earned. So Rebates earned this year will be good until the end of the year 2002. For example, Rebates earned between January 1, 1993 and March 31, 1993 will expire on December 31, 1998.
Q: Do I have to keep this Ford Citibank account to redeem my Ford Rebates?
A: In order for Rebates to be redeemable for five years form the calendar year in which they were earned, you will have to keep this account open and continue to comply with the terms detailed in the cardmember agreement, such as remaining within you credit line and making at least your minimum monthly payment on or before each statement due date.
If you choose to close you account or convert to another Citibank card, we will issue you a Ford Rebate Certificate, which will allow you to redeem your Ford Rebates within 45 days from the date you close you account or convert to another Citibank card.