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Citi Prestige Changes Coming: Free Hotel Nights & More

by on August 4, 2014 · 18 comments

in Chase, Chase Sapphire Preferred, Citi, Credit Cards, ThankYou Points

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Citi has announced sweeping changes coming this fall to the Citi Prestige, the flagship card of Citi ThankYou Rewards. This card doesn’t get as much ink as some of its competitors, partly because ThankYou Rewards has historically been weaker than programs like Chase Ultimate Rewards, Amex Membership Rewards, and Starwood Preferred Guest. However, the recent addition of 8 new airline transfer partners has put ThankYou Rewards back in the conversation, and given a boost to cards within the ThankYou program.

Citi Prestige Card

Citi Prestige currently offers a sign-up bonus of 30,000 ThankYou points after spending $2,000 in the first three months after account opening. There’s a hefty $450 annual fee that is not waived the first year (or $350 for CitiGold clients), but as you’ll see, it is possible to make up for that fee if you maximize the card benefits. While Citi is eliminating some lucrative benefits, the updates to Prestige are generally good in my opinion. Most changes will go into effect starting on October 19, 2014. Read on to find out what to expect, and to see my analysis of whether this card can be counted among the elite travel cards currently available.

Citi prestige benefits

NEW AND CHANGING BENEFITS

Free 4th Night at Hotels
Previously, Citi Prestige cardholders received a free 4th night only at select properties in the World Elite Luxury Hotels and Resorts Portfolio. That benefit is being expanded to include all hotels, though there is a new stipulation that the room must be booked through Citi’s designated travel advisor, Carlson Wagonlit Travel. While the restriction is annoying, CWT generally prices out about the same as (or often better than) the major online travel agencies, and the terms of benefits actually state that “Rates provided will be equal to or lower than the lowest publicly-available fare at the hotel’s official website.”

This benefit comes at the expense of booking directly with the hotel, so your stay may be ineligible to earn points or elite status credit. That’s worth considering if you’re staying at a property with a solid loyalty program, especially if you have a co-branded hotel credit card, though I think it’s unlikely the value of any points you earn would match getting the fourth night completely free.

You can only receive the benefit once per reservation, so you can’t get two statement credits for an eight night stay. However, Citi removed language from the old benefit that limited the number of statement credits to two per calendar year, and added language explicitly stating that there are no blackout dates.  That means you could book an eight night stay as two separate four night reservations, and earn two statement credits that way.

Interestingly, the statement credit is calculated based on the actual rate of the free fourth night, even if that rate differs from the other nights. This means that you could book a four night stay starting on Wednesday night, and get Saturday night free even though it might be the most expensive of the four nights. Thus, the free night benefit could save you more than 25% off your hotel stay in the right circumstances.

Get your 4th hotel night free, anytime, anywhere.

Air Travel Credit
Citi Prestige currently offers an annual $200 statement credit for airline fees, good toward checked bag fees, lounge visits, in-flight entertainment, etc. In October, Citi will up that statement credit to $250, and will reframe it as an “Air Travel Credit” valid for any airline expense, including airfare. The increased amount and added flexibility make this benefit much more useful, as anyone who flies should have no trouble spending that amount. This effectively reduces the $450 annual fee to just $200.

Bonus Categories
Citi Prestige currently offers 2x ThankYou Points for dining and 1x elsewhere. Starting in October, Prestige will introduce a new 3x bonus category for airlines, hotels, and travel agencies, and will expand the 2x category to include entertainment (sporting events, movie theaters, amusement parks, record stores, video rental, and more). With the increasing value of ThankYou Points (up to 1.5 cents apiece in my latest monthly valuations), the new 3x category puts Prestige ahead of the stalwart Chase Sapphire Preferred in terms of earnings on travel expenses (though the Sapphire Preferred has a broader definition of what counts as travel). While I still wouldn’t use the Prestige as an everyday earning card, the souped up bonus categories at least make it a viable option.

Priority pass lounges

As of October, Citi Prestige will offer access to Priority Pass lounges instead of Airport Angel.

Lounge Access
Citi currently offers Prestige cardholders access to the roughly 600 Airport Angel lounges worldwide, though lounges are only available at nine U.S. airports, and access is limited to the cardholder alone. In October, Citi will instead offer membership in Priority Pass, which runs over 700 lounges worldwide with locations in 32 U.S. airports, and provides access to the cardholder and immediate family (spouse, partner, and children under 18) or up to two guests with same day travel.

Some people swear by Airport Angel, but really there’s a fair amount of overlap between the two programs. Priority Pass has more lounges overall, but their greater presence in the U.S. gives them an edge for domestic travelers. Add in the access for family or guests, and this is a clear improvement to the Citi Prestige benefits.

Relationship Bonus
One benefit that’s changing for the worse is the relationship bonus, which previously awarded up to a 50% annual bonus on base points according to card spending and the cardholder’s banking relationship with Citi. The benefit is being scaled back to no longer reward meeting spending thresholds, and the banking relationship bonus is being reduced as follows:

Citi Prestige Relationship bonus

These types of accounts involve substantial deposit and other requirements to avoid monthly fees, so unless you have a high level banking relationship with Citi and can get around the fees, or you’re spending $50,000+ on the card each month, these bonuses aren’t worth the effort.

UNCHANGED BENEFITS

ThankYou Points Redemption Bonus
ThankYou Points can generally be redeemed through the ThankYou Travel Center for 1 cent apiece toward flights, hotels, etc. The Citi Premier card allows you to redeem at the higher rate of 1.25 cents apiece, but Citi Prestige gives you a 33% bonus to redeem ThankYou Points for most travel at 1.33 cents apiece, or for flights on American Airlines and US Airways at 1.6 cents apiece!

While you may be able to find better value through transfer partners, keep in mind that air travel booked through the ThankYou Travel Center counts as a paid fare, and is eligible to earn miles and counts toward elite status. You’ll have to factor in the value of those miles and benefits when considering your redemption options.

The bar at American's Admirals International Lounge at JFK

Citi Prestige gives you access to American Airlines clubs like the JFK International Lounge.

Admirals Club and US Airways Club Access
Citi continues to accent its relationship with American Airlines (soon to include US Airways) by offering Citi prestige cardholders access to Admirals Club and US Airways Club lounges. Cardholders are entitled to access along with immediate family or up to two guests when traveling on a paid fare on American or US Airways. It would be great to see this benefit expanded to simply grant Admirals Club membership like the Citi Executive AAdvantage card, but given the other lounge access already available with the Prestige, it’s adequate.

Global Entry $100 Statement Credit
Like The Platinum Card from American Express, Prestige offers a $100 statement credit to cover the cost of applying for Global Entrya U.S. Customs and Border Protection program that expedites clearance for pre-approved, low-risk international travelers upon arrival in the United States. Unlike the Amex Platinum card, the credit does not apply to additional cardholders. Still, if you’re planning on getting Global Entry, this credit combined with the Air Travel Credit effectively reduces the first year annual fee to just $100.

No Foreign Transaction Fees, Chip & Signature
Continuing the welcome trend among travel credit cards, Citi Prestige does not charge foreign transaction fees, so you can use the card when traveling internationally without getting dinged for each purchase.

Citi Prestige also continues to offer Chip and Signature technology, which is becoming pretty standard among US credit cards. It would be nice to see Citi upgrade Prestige as a high level travel card to Chip and Pin technology, but the current setup is acceptable.

Reading on airplane

Citi Prestige is losing its companion ticket benefit, but on the bright side, you’ll have time for that nap you’ve been meaning to take! (Image courtesy of Shutterstock.)

DISCONTINUED BENEFITS

In its overhaul of the Prestige Card, Citi decided to do away with 3 major benefits: the Flight Points program, Worldwide Companion Travel, and Worldwide 15% Discount on Airfare.

While Flight Points were potentially lucrative, the program was widely misunderstood and convoluted to the extent that extracting full value took a fair amount of research. Cardholders who learned to navigate Flight Points will be sad to see them go, but most people will be better off with the new category spend bonuses and transfer partners.

Both the 15% discount on airfare and the annual companion ticket were useful, but not as useful as they sound, since travel had to be booked through Spirit Incentives, and many flyers complained that the agency’s prices were inflated prior to applying benefit discounts. Still, the removal of these benefits definitely translates into lost value.

citi thankyou banner

OVERALL OUTLOOK

I have no doubt that the new package of benefits for Citi Prestige is worth the $450 annual fee for the first year, especially for those who plan to enroll in Global Entry. I value the 30,000 point signup bonus alone at no less than $450, so adding in the Air Travel Credit puts you well into positive territory even before considering all the other benefits.

Beyond the first year, it’s hard to gauge the value definitively without firsthand experience using the free 4th hotel night, but the potential value of that benefit coupled with the Air Travel Credit, bonus spending categories, and new transfer partners makes me believe this card has a place in the wallet of serious travelers.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • SR

    I’ve used the 4th night hotel credit twice this year and got back close to $750. I’m happy that it’s unlimited now and can be used at any hotel. Before, most of the hotels were all 4 to 5 stars and pretty pricey per night. They were sometimes slightly higher priced than the hotel’s websites but within $20. They did come with a bunch of other benefits though such as hotel credit, free wife, free breakfast, and some other complimentary stuff.
    The biggest loss to to the card is that they are removing the companion pass. If you added an authorized user for $50 more, you got access to two international companion passes. This was worth $1000′s (to me). Spirit Incentives was slightly higher prices and a huge PITA to use their system, but you still could have saved a ton of money if you could put up with it. I did a flight to Mexico earlier this year and saved about $400 with the companion pass.

    Flight points were also a big loss as it was essentially double counting TY Points and Frequent Flyer Miles. If you flew a lot, this could be a significant amount of points.

    I can’t recommend the Prestige card enough, especially if you travel a ton. I’ve had it for about 8 months now and got $750 back in hotels, $400 savings on companion pass, $200 airline statement credit, $100 back on global entry, airline lounge access all over the world, pretty decent concierge service, no foreign transaction fees, and used the 1.6 point bump up on several American flights (ex. $200 flight was only 12,000 points). I’m going to check out the free rounds of Golf benefit soon too.

  • Laxman Bhattarai

    TPG – Not to forget Citi Prestige card annual fee is $350 for CitiGold clients.

  • Wellington

    Definitely signing up for this bad boy now that the 100k Citi AA cards are gone.

    My only question is WHEN will the travel companion pass disappear? With the Citi Premier card they allowed for grandfathering in the domestic travel companion pass but no new ones were issued after the cutoff date (I believe October of last year). I am curious if I can sign up now, get all of the new benefits, and also be grandfathered into a companion pass. That would make the card a win-win-win situation.

    Thank you for the solid news.

  • ahiddenkarl

    “They did come with a bunch of other benefits though such as hotel credit, free wife, free breakfast”–”Free wife”, that’s great benefit.

  • http://www.thepointsguy.com PR@TPG

    According to the T&C:

    “Effective October 19, 2014, this benefit will no longer be offered. You will have until October 18, 2014 to book your companion ticket, through our travel service provider, for travel completed by October 18, 2015. If you became a Citi Prestige cardmember after October 18, 2013 you will have a year from the date you became a cardmember to call 1-877-288-CITI and book your ticket for travel completed by October 18, 2015.”

  • SR

    Yes, free wife. That wasn’t a typo.

  • Nick DeSantis

    So with $250 airline credit, does this mean you could purchase a $250 airline gift card, earn 3x points, and still earn statement credit?

  • SR

    In the past, I’ve received the statement credit from Delta and American buying $100 e-giftcards.

  • JessP

    Can you confirm this somehow? I am CitiGold but don’t see it on the application anywhere or online – thank you!!

  • Miles

    I can confirm it, however I haven’t seen it documented anywhere. Anyway, if you are CitiGold, you should consider applying in branch. They often have a better offer, anyway.

  • Corys401

    I didn’t think we had access to US Airways Clubs? Please correct me if I’m wrong. I live in DC – a major US Airways hub and would love to take advantage of that benefit.

  • Brian C. Lee

    The T&C of the Prestige card specifically say you don’t get access to US Airways Clubs, They’ll all become Admirals Clubs eventually, but they aren’t yet.

  • yeshu

    time to ditch amex platinum for this card?

  • Chris Coveney

    Is Priority Pass access independant of the carrier you are flying on – e.g. if you are flying on JetBlue, can you still use the United loungue (assuming they are in the same terminal)?

  • Brian C. Lee

    I wouldn’t. The TYP transfer partners aren’t all that exciting, except for SQ (and maybe CX & TG, depending on your needs).

  • Wildcat1

    A couple of questions TPG:

    1) When you mention ‘Previously, Citi Prestige cardholders received a free 4th night only at select properties in the World Elite Luxury Hotels and Resorts Portfolio.That benefit is being expanded to include all hotels’, does that mean ALL hotels only within the World Elite Luxury Portfolio or ANY hotel anywhere, irregardless of featured in portfolio BUT has to be booked through CWT ?

    2) Trying to understand difference between ‘access’ and ‘membership’ with regards to Prestige vs Executive. Does this mean that with Prestige you are only allowed to enter the lounge if you have an AA ticket and this card whereas with the Executive you can enter the lounge irregardless of whether you have an AA ticket or not ? Also what do they use as verification for access, just the card being shown or is your ticket flagged in some way

    Thanks

  • http://www.thepointsguy.com PR@TPG

    1) Yes, according to Citi, the new free night benefit will include ANY hotel booked through CWT; the previous portfolio is no longer relevant. Here’s the language from the T&C:

    “You will enjoy a complimentary fourth night with no black-out dates, when you book four consecutive nights at any hotel booked by a personal travel advisor designated by MasterCard (the “designated travel advisor” is Carlson Wagonlit Travel). Bookings made through other methods such as, travel agents, websites or directly with a hotel will not qualify.”

    2) You nailed it. With Prestige, you must be ticketed on AA or American Eagle within 12 hours of your visit. With the Executive, you can visit regardless of what airline you’re flying. According to the Prestige T&C, you will need to show a boarding pass or stand-by ticket to enter an Admirals Club lounge.

  • Juan

    I thought that was only if used in the Philippines?

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