"Citibank probably loses 3.5 million to 4 million cardholders a year just through normal attrition," said H. Spencer Nilson, publisher of the Nilson Report, an industry newsletter. "It's cheaper to spend money on programs like this to keep holders, than to go out and get new cardholders."

"They avoid price competition whenever possible," said Elgie Holstein, director of Bankcard Holders of America, a nonprofit consumer advocacy group. "Citibank's program may be of use to some consumers, but most will save more money by switching to a card with a lower interest rate. With Citibank's credit card interest rate at 19.8 percent, they're near the top of the heap."

Under the price-protection program, Citibank's cardholders can submit a claim within 60 days of charging a purchase on their cards. If they see the same item advertised for less, they can call a toll-free number or write Citibank for a claim form.