In an earlier post about the Citi Prestige, I mentioned a refresh of the card was likely brewing and that it could prove a positive development. Surely, Citi would have to “step it up” to compete with Chase and American Express, right?
Huge Changes Are Coming To The Citi Prestige Card…
Well, we finally got confirmation today on what the Citi Prestige refresh will look like, and well, it’s complicated.
A lot depends on what happens with the related Citi Premier credit card before we’ll truly know whether these changes will either be good or not so good.
The Confirmed Positive Changes To The Citi Prestige Card
The following changes are believed to go into effect in January 2019:
- The card will now earn 5x points on dining and air travel (an increase from 2x on dining and 3x on air)
- The card will now earn 3x points on cruise lines (an increase from 1x)
- The $250 credit for air travel will become a more flexible $250 travel credit
- There will be a new cell phone insurance benefit (this is yet to be defined)
The Confirmed Negative Changes To The Citi Prestige Card
The following changes are believed to go into effect September 2019:
- The 4th night free benefit will now be capped to twice per calendar year (devalued from unlimited usage)
- The annual fee will be increased to $495 from $450 (a $45 increase), although it is believed Citigold and Private Bank clients will continue to pay $350
- Points redeemed for travel through Citi’s Thank You portal will no longer have a 25% bonus (this is potentially a 20% devaluation on Thank You points across the board)
- The card will no longer earn 2x points on entertainment
More Questions Than Answers
These changes bring up a whole lot more questions than answers. Here are some questions that will ultimately require solid answers from Citi:
- Will the [related] Citi Premier card still keep the 25% bonus on Citi travel portal redemptions?
- Will the Citi Premier’s earning structure change? If so, how?
- Will it still make sense to hold both the Citi Premier and Prestige?
- Will the Citi Prestige still earn 3x on hotels?
- Will current Citi Prestige cardholders be grandfathered into the $450 AF, and if so, for how long?
- If the 25% bonus on Citi portal redemption disappears, does it still make sense to hold other cards like the AT&T Access More card?
- If the 25% bonus on Citi portal redemption disappears, how long will you have to use the points you have stacked up before they lose 20% of their value?
- Is the new Citi Prestige a “refresh” or an “upgrade”? (Think Chase with their new Hyatt and IHG cards)
- What will the new sign-up welcome bonus, if any, look like for the new Citi Prestige?
- Can you earn a welcome bonus if you’ve already held the Citi Prestige?
- Will there be any upgrade bonuses to the new Citi Prestige, if so, how many Thank You points?
- Does the Citi Prestige’s new 5x point earn structure really beat the Chase Sapphire Reserve if Ultimate Rewards have a 50% bonus on all travel and dining?
- Is the Citi Prestige worth keeping?
- Are any of the Citi Thank You point cards worth keeping?
Thank You vs. Membership Rewards
For those of you fired up about the new American Express Gold Card that earns 4x on dining, the Citi Prestige’s new 5x on dining must give you pause. Are 4x Membership Rewards points better or 5x Thank You points? If your primary redemption usage is through the travel portals, the new portal redemption value for both points currencies is 1%.
However, you can still get 35% more value if you hold the American Express Business Platinum card and redeem on airfare; on the other hand, Thank You points are worth more than Membership Rewards points when redeeming for hotels, rental cars, tours, etc.
If your primary usage for points is transfer to airline loyalty programs, this may be a conundrum as well. In the end, it would come down to what transfer partners you value the most, although both Membership Rewards and Thank You points now have Star Alliance, One World, and SkyTeam partners.
Thank You Vs. Ultimate Rewards
If you consider the Chase Sapphire Reserve, you may think 3x on travel and dining is no longer competitive. Here’s why you may be wrong: Ultimate Rewards points still receive a 50% bonus if redeemed through the Reserve’s Ultimate Rewards portal, so 3x on dining * 1.5 = 4.5%.
And that’s assuming you don’t transfer your points to the arguably more valuable Ultimate Rewards transfer partners – like Hyatt – where you can easily earn 3x * 2.5x (my typical Hyatt redemption value) = 7.5%. On top of this, factor in the Sapphire Reserves’s net annual fee of $150 (after travel credit) vs. the Citi Prestige’s new $245 net annual fee (after travel credit) and the Sapphire Reserve starts looking a whole lot stronger.
The Bottom Line:Â Huge Changes Are Coming To The Citi Prestige Card…
Barring any new information, it looks like this refresh is an overall devaluation by limiting the 4th night benefit and getting rid of the 25% bonus, and the new 5x categories don’t quite make up for it with the increased annual fee. Still, if you love Thank You points and their transfer partners and can take advantage of the 2-time 4th night benefit, you can likely still break even or even come out ahead.
The real question is: Is the new Citi Prestige worth getting or keeping? We may not know the answer to this until we know the fate of the Citi Premier card.
Cheers?
