An In-Depth Look At The Changes Coming To The Citi Prestige Card

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Long-time readers may remember that I’ve blown hot and cold about the Citi Prestige card for quite some time. I defended the value of the credit card following the devaluations which saw Admirals Club membership withdrawn as a benefit but, by the beginning of this year, I was set to swap my Citi Prestige card for the cheaper Citi Premier ThankYou card….but that downgrade never actually happened.

I didn’t get around to downgrading my card because Citi offered me a path to a valuable points bonus and, once I’d earned the bonus, I worked out a way to use the Citi Prestige’s 4th night free benefit to save quite a bit of cash on a suite booking I needed to make.

In a few weeks’ time, my Citi Prestige annual fee is set to hit and, coincidentally, that’s when some of the latest changes to the Prestige’s offering are due to kick in. That makes this a very good time for me to reflect on what the Citi Prestige will offer going forward.

Upcoming Changes To The Citi Prestige Card

The changes Citi is bringing to the Citi Prestige card are being introduced in 3 phases….

From 4 January 2019:

The Citi Prestige will earn the following in the specified categories:

• 5x ThankYou points at restaurants worldwide (up from 3x)
• 5x ThankYou points on air travel booked directly with an airline (up from 3x)
• 3x ThankYou points for spending with cruise lines (up from 1x)
• 3x ThankYou points for spending on hotels (no change)
• 2x ThankYou points on entertainment (through 31 August 2019 – then reverts to 1x)
• 1x ThankYou points on all other purchases (no change)

In addition to the above, the $250 air credit that the Citi Prestige has offered on air fares in the past will now be expanded to include all eligible travel purchases.

For the avoidance of doubt,”eligible travel purchases” include purchases from/through: airlines, hotels, car rental agencies, travel agencies/travel aggregators/tour operators, commuter transportation, ferries, commuter railways, subways, taxis/limousines/car services, passenger railways, cruise lines, bridge and road tolls, parking lots/garages, and bus lines

From 1 May 2019:

Citi is introducing cell phone protection for everyone who pays their cellular bill with their Citi prestige credit card.

From 1 September 2019:

• The annual fee will increase to $495/year (up from $450/year)
• The authorised user fee will increase to $75/year (up from $50/year)
• The complimentary 4th night free benefit will be limited to two bookings per calendar year.
• Entertainment purchases will only earn 1 ThankYou point per dollar (down from 2)
• The 25% bonus available when using Citi ThankYou points to purchase airfares will be discontinued.

Note: Only bookings made on or after 1 September 2019 will count toward the 2019 “4th night free” cap.

Also, per Citi:

Beginning 09/01/19, Citi Prestige Concierge will no longer be available for Fourth Night bookings and bookings must be made either online at ThankYou.com or by phone at 1-800-ThankYou in order to be eligible for the Fourth Night benefit.

This last point is important as I’ll discuss a little later in this post.

Thoughts

There’s good, bad and ugly in here so I’ll break down my thoughts into those three categories.

The Good…

Air Fare Earnings

The increased earnings for air travel (5x) are very welcome and should give people a nice option going forward.

Up until now the choice for a lot of us looking to maximize earnings when booking flights has been to…

1. Book air travel with the Platinum Card from American Express and earn 5 MR points/dollar while forgoing any trip delay/cancellation cover or…
2. Book air travel with the Chase Sapphire Reserve card and only earn 3 UR points/dollar but have trip delay/cancellation cover thrown in.

The Citi Prestige card offers similar (not identical) trip delay/cancellation cover to the Chase Sapphire Reserve card and so the increase in earnings on airfare should make quite a few people very happy.

Restaurant Earnings

American Express recently revamped its personal Gold Card to include earnings of 4 Membership Rewards points/dollar at US restaurants (since this post was written the card now offers 4 points/dollar at restaurants worldwide) and Citi has just blown that out of the water by offering 5 ThankYou points/dollar at restaurants worldwide.

This increase is going to be very popular with frequent travelers as restaurant spend (which covers just about any establishment that sells food that isn’t situated in a grocery store, department store, warehouse club or hotel) usually forms a sizeable chunk of their annual spending.

Cruise Lines

I’ve got to be honest and admit that the thought of going on a cruise has absolutely no appeal to me but I appreciate that hundreds of thousands of people feel very differently.

If you’re a fan of oceangoing resorts the Chase Sapphire Reserve has, to date, been your best option when it comes to choosing how to pay. Now you can add the Citi Prestige card to that list too.

3 point/dollar earnings means you just have to choose which currency you’d rather earn – Chase’s Ultimate Rewards or Citi’s ThankYou points.

$250 Travel Credit

The fact that the annual $250 credit now covers just about all forms of travel has to be seen as a positive move if not a move that will make all that much difference to people.

If you’re a traveler who has struggled to spend the $250 on air fare (which has been the historic restriction) I’m pretty sure the Citi Prestige card isn’t for you.

Ironically, now that the Prestige Card will now offer 5 points/dollar for spending on airfare I suspect that will still be the overwhelmingly most popular category in which the credit gets spent.

Cell Phone Protection

This looks like it will be a nice positive addition to the benefits offered by the Citi prestige card but, as I haven’t seen full details of the coverage that will be offered, I’m going to hold back on commenting further at this point.

The Bad…

Complimentary 4th Night Free

The fact that Citi will restrict the number of times we can use the 4th night free benefit to twice per calendar year is clearly a negative but it’s not a big enough negative for me to categorize it as “ugly”.

I appreciate that there will be a vocal group within the miles & points community who will be outraged at this change and who are probably in the process of forming an angry, torch-wielding mob ready to march on Citi HQ….but these guys are almost certainly a small minority of Citi Prestige cardholders.

While some travelers have been able to use the 4th night free benefit an impressive number of times every year, anecdotal evidence suggests that most of us haven’t used it more than 2-3 times per year since the card was first introduced.

Am I happy to see this cap introduced? Of course not. Do I really care? Not really – it’s not going to affect me all that much and I suspect that I’m in a significant majority in this case.

Reduced Earnings On Entertainment

I liked the 2x/dollar earnings that the Citi Prestige earns on Entertainment so I’m disappointed to see it disappear next year.

As far as I know no other credit card offers a bonus for Entertainment spending so I’m not entirely sure where we can make up for this loss a cashback card will probably be the best option.

The Annual Fee

I would have thought that the negative changes Citi is making to the Citi Prestige’s benefits (more of these in the next section) are more than enough to balance out the positives that we’re seeing….but Citi doesn’t see things that way.

The increase in annual fee to $495 (10% increase) seems unnecessary and the increase in authorised user fee to $75 (50% increase) is just greedy.

Yes, Chase charges a $75 authorised user fee on its Sapphire Reserve card (a card that Citi clearly views as being a close competitor to the Prestige card) but at least the Sapphire Reserve’s main annual fee is still $450 (for now)…..and the card gives you a $300 annual travel credit to Citi’s $250.

The Ugly…

25% Bonus When Redeeming Points Through The ThankYou Portal

I’m a fan of using convertible currencies directly for airfares as the option can offer a good amount of flexibility.

When you use points to book air fare directly you….

• Don’t have to find award space as the points are being used in exchange for a cash fare
• Will earn credit towards elite status as well as airline miles/points because you’re effectively buying a cash fare
• Don’t have to wait for a points transfer to take place – you book instantaneously just as with a cash fare.

Citi allowing cardholders to use ThankYou points for airfare at a value of 1.25 cents per point meant that the bank was matching a similar benefit offered by the Chase Sapphire Preferred card. Notably it was still shy of the 1.5 cents/point on offer by the Chase Sapphire Reserve card.

Citi is now reducing the value of ThankYou points to just 1 cent each (when they’re redeemed directly for airfare) and that’s a BIG hit to the Prestige’s value proposition.

When one of your main competitors offers 50% more value that you do you had better be sure that your offering is SIGNIFICANTLY better….and I’m just not sure that’s the case here.

I don’t know why Citi has decided to go down this road but I suspect this will be a decision that annoys a lot of people and one which makes it harder for people to give up their Chase Sapphire Reserve cards in favor of the Citi Prestige card (which is what Citi almost certainly wants them to do).

Limitations To How The 4th Night Free Can Be Booked

As I discussed above, I can live with the new limit of just 2 “4th night free” bookings per year but I’m not sure I can live with the changes to how we’ll soon have to book the 4th night free.

Citi has said that the 4th night free benefit will not be bookable via its concierge service from 1 September 2019 and that all bookings will have to be done online (via ThankYou.com) or via the ThankYou phone line….and that’s very bad news.

Bookings through the Citi concierge service are treated in a similar way to direct bookings by the hotel chains while bookings through the ThankYou channels are viewed as 3rd party bookings (if I’m reading things correctly).

All the popular hotel chains view bookings through 3rd party channels in a pretty negative way. This means that ….

• The bookings do not qualify for elite status benefits (no complimentary upgrades, no complimentary breakfasts etc…)
• The bookings don’t qualify for elite night credits
• The bookings don’t qualify for points earning
• The bookings aren’t be eligible for discounts like those offered by AAA (unless specifically mentioned on the site)
• The hotel chains that ordinarily allow members of their loyalty program to upgrade cash bookings with points (e.g. Hyatt) will not let members do so on bookings through the ThankYou channels.

Essentially a booking through ThankYou.com or through the ThankYou phone line will see guests treated the same as someone with no status at all….and who wants that?!

This is a HUGE devaluation to the 4th night free benefit and one which will affect a lot more people than the cap on the number of times the benefit can be used – it will put an end to the method I used to save on the suite booking I mentioned earlier.

Bottom Line

When I heard that the Citi Prestige card would soon earn 5 points/dollar on airfare and restaurants worldwide I was delighted. I was convinced that I finally had a solid reason to keep the card long-term and to use it a lot more than I do why.

It even (briefly) had me considering the value of my favorite card of all – the Chase Sapphire Reserve.

Sadly, having read the full details of the changes I’m not sure the Prestige card is all that improved.

Yes, the new earning rates look great….but at what cost?

The annual fees have increased, the 4th night free benefit appears to have been devalued to a point where most miles & points fans won’t have much use for it and the value of ThankYou points has taken a significant hit.

With the relaunch (coming in January) Citi had a fantastic opportunity to turn the Prestige card into the best premium card on the market….but it has failed to take its chance.

In a number of ways the Citi Prestige card is significantly better than it was but, in other ways, it’s significantly worse. What Citi has managed to do it to both gain and lose ground on its competitors in a single blow….and that’s quite some trick to pull off.

I hope Citi didn’t pay a consultancy firm too much for whatever advice it was given because the revamped Citi Prestige card isn’t going to have the effect I suspect Citi is looking for….and Citi only has itself to blame.