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Which Citi ThankYou Rewards Card Offers the Most Value?

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Update: Some offers mentioned below are no longer available. View the current offers here – Citi ThankYou PremierCiti ThankYou Preferred, Citi Prestige Card

Citi has made impressive strides this year with the addition of nine new airline transfer partners, and while ThankYou Rewards finished last in our transferable points programs showdown earlier this week, there’s still a lot of value to be found there. Today TPG Contributor Nick Ewen explores credit card options for earning Citi ThankYou points, and explains the differences between them.

October 19 has come and gone, which means that the Citi Prestige card now comes with a number of new benefits. In earlier posts I shared my thoughts on this card in relation to two other premium credit cards, and I did an in-depth analysis of the Citi ThankYou Premier card. In this post I’ll see how these two cards stack up against each other and Citi’s fee-free option in the ThankYou Rewards program, the Citi ThankYou Preferred. These cards all have their strengths and weaknesses; read on to see which one suits you best.

Citi ThankYou Rewards banner
These cards allow you to accrue ThankYou points that can be redeemed for a variety of rewards.

Let’s begin with a chart that highlights the key benefits of each card:

 

Citi ThankYou Preferred

Citi ThankYou Premier

Citi Prestige

Sign-up Bonus

20,000 points after spending $1,500 in first 3 months

20,000 points after spending $2,000 in first 3 months; additional 30,000 points after spending $3,000 in first 3 months of year two

30,000 points after spending $2,000 in first 3 months

Bonus Categories

2x points on dining & entertainment purchases

3x points on dining & entertainment; 2x points on airfare, hotel, & travel agency purchases

3x points on airfare, hotel, & travel agency purchases; 2x points on dining & entertainment

Points Transfer

Only if you also have a Premier or Prestige card

Yes

Yes

Redemption Bonus

None

Points worth 25% more when redeemed for airfare

Points worth 60% more when redeemed for airfare on US/AA and 33% more for redemptions on all other airlines

Lounge Access

None

None

Admirals Club and Priority Pass (with guest privileges)

Fee Credits

None

None

$250 air travel; $100 Global Entry

Hotel Benefits

None

None

Free 4th night

Annual Fee

None

$125 (waived for the first year)

$450

Foreign Transaction Fees?

Yes

No

No

This chart should make it clear why the annual fees are progressively higher as you move from left to right. You get substantially more benefits on the Premier and Prestige cards, so they (naturally) will set you back more each year.

Make sure you know what rental car insurance your credit card offers.
Car rental insurance is just one of the protections you’ll receive on any of these cards.

The same holds true when it comes to the various purchase and travel protections offered on each card.

Citi ThankYou Preferred comes with:

  • Citi Private Pass
  • Personal Concierge Services
  • $0 liability for unauthorized charges
  • Citi Price Rewind
  • Extended Warranty
  • Retail Purchase Protection
  • Auto Rental Insurance
  • Trip Cancellation / Interruption Coverage
  • Travel Accident Insurance

Citi ThankYou Premier comes with all of the above, plus:

  • Lost Luggage Coverage
  • Emergency Assistance Services

Citi Prestige comes with all of the above, plus:

  • Citi Private Pass Beyond
  • Trip Delay Reimbursement
  • Baggage Delay Reimbursement
  • Emergency Evacuation Coverage

These benefits also improve as you move up the premium card ladder, again quantified with the increasing annual fees on the Premier and Prestige cards, respectively.

Credit Cards shutterstock image
Which of these cards is right for you? Photo courtesy of Shutterstock.

So which card is best for you? Here’s a quick rundown of the types of spending and/or travel patterns that best fit each one:

Go for the Citi ThankYou Preferred card if:

  1. You’re new to the points & miles game;
  2. You need a fee-free card to improve the average age of accounts on your credit score (which can make up close to 15% of your overall credit score);
  3. You rarely (if ever) redeem points for airfare;
  4. Travel only a few times per year.
  5. You currently hold a Citi Premier or Citi Prestige card

For cards without an annual fee, the Citi ThankYou Preferred card is a pretty solid product (it made TPG’s Top 9 List earlier this year). It can be a good starter card, and no-annual-fee cards are good for improving the average account age component of your FICO score. It also offers a decent sign-up bonus, and it offers an uncommon category bonus for entertainment purchases, meaning that tickets to movies, concerts, sporting events, amusement parks, and tourist attractions can earn you 2 points per dollar.

The ThankYou points you earn on this card can be redeemed for travel and gift cards at 1 cent per point, meaning that the sign-up bonus is worth up to $200. You can also earn double points when dining out, but this is also true of other no-fee cards, and since cards like the Barclaycard Arrival give you this bonus and a 10% rebate when redeeming points for travel, that offers a better overall return on restaurant purchases. That makes ThankYou Preferred a good option for those who typically use points for non-travel redemptions and wouldn’t utilize the more generous benefits when actually traveling.

This card is also useful is if you currently hold either the Premier or Prestige card. Since Citi ThankYou points can be pooled among your different accounts, you can open this card, earn the sign-up bonus, and use your points for more valuable transfers or travel redemptions.

Adding American to go from 8 to 9 transfer partners would make Citi ThankYou points a MUCH more valuable currency!
You’ll get even more value out of a ThankYou Preferred card if you already have the Prestige or Premier.

This summer, the ThankYou Rewards program got a much needed jolt of benefits when it added 9 new airline transfer partners. While it doesn’t offer the variety of partners of Membership Rewards, nor the “mainstream” partners of Chase Ultimate Rewards, the program did become significantly more valuable. In fact, TPG upped the value of ThankYou Rewards from 1.1 to 1.5 cents apiece (and later to 1.6) in response. Thus, this enhancement added approximately 50% to the program’s value. Even though points you earn from the ThankYou Preferred don’t ordinarily transfer to partners, they will if you also have either the Premier or Prestige card.

The ThankYou Premier offers several bonus spending categories.
The ThankYou Premier offers you several bonus spending categories.

Go for the Citi ThankYou Premier card if:

  1. You typically spend more than $20,833.33 per year on dining, entertainment, and on purchases with airlines, hotels, and travel agencies;
  2. You not sure whether you plan to keep the card long-term;
  3. You typically redeem points for airfare (thus earning elite-qualifying miles); or
  4. You plan to transfer points to redeem them on a ThankYou Rewards transfer partner.

There are two main benefits you get on this card that you don’t get on the Preferred card: higher category bonuses for everyday purchases, and more lucrative redemption options (both for airfare and transfer partners). According to TPG’s most recent points and miles valuations, ThankYou points earned on the Premier card are worth 1.6 cents apiece, so you’re getting 0.6 cents more in value for each point with this card compared to the Preferred card. Since you earn one additional ThankYou point on dining and entertainment (3 per $ instead of 2 per $) and one additional point with airlines, hotels, and travel agencies (2 per $ instead of 1 per $), you’ll need to spend about $20,833 in those categories annually to cover the $125 annual fee and make the premium card worthwhile (since $125 / 0.6 cents = $20,833.33).

Of course, this only applies to the card in a typical year, since the annual fee is waived in year 1, and the extra 30,000 bonus points you would earn in year two more than cover the annual fee.

On the other hand, if you’re just planning to try this card for the first year or two, then it’s a much better option than the Preferred card. You earn the same 20,000 points as a sign-up bonus in year one (though you’ll need to spend $500 more in the first 3 months), but the bonus categories are much better.

Citi ThankYou flights
This flight would only set you back 13,708 points if you hold the Citi Premier card.

The other benefit of the Premier card is that it gives you access to improved redemption options. You’ll need 20% fewer points when you redeem for airfare, so a $500 ticket only costs 40,000 points. At 1.25 cents/point, this is significantly less than the 1.6 cents/point that TPG offered in his recent valuations. However, it’s still a better rate than you get with the Preferred card. If this is the only way you redeem (or plan to redeem) ThankYou points, you would need to spend $50,000 a year in the bonus spending categories to cover the annual fee ($125 / 0.25 cents = 50,000).

Again, though, this evaluation is based on year three and beyond; if you’re eyeing the sign-up bonuses earned in the first two years and plan to redeem those points for airfare, this card is a great option. The 20,000 points earned in year one are worth $250 (compared to just $200 on the Preferred card), and the 30,000 additional points you earn in the 2nd year are worth $375 for airfare, easily covering the annual fee.

Citi prestige benefits
The Citi Prestige is a great option for frequent travelers, especially if you enjoy lounge access!

Go for the Citi Prestige if:

  1. In a typical year, you spend at least $4,687.50 more on airfare/hotels/travel agency purchases than you do on dining and entertainment;
  2. You travel frequently for business or pleasure; or
  3. American and US Airways are your primary airlines.

The Prestige card is interesting in that the bonus categories for everyday purchases are flipped with those on the Premier: you only earn 2 points per dollar spent on dining and entertainment (3 per $ on the Premier), but you earn 3 points per dollar spent on airlines, hotels, and travel agencies (compared to just 2 per $ on the Premier). If airfare/hotel/travel agency purchases – dining/entertainment purchases = at least $4,687.50, Prestige is the better option.

Let’s say (for example) that you spend $10,000 a year on dining & entertainment and $14,687.50 a year with airlines, hotels, and travel agencies. Here are your points earnings on each card:

  • Citi Premier: ($10,000 x 3) + ($14,687.50 x 2) = 30,000 + 29,375 = 59,375 points
  • Citi Prestige: ($10,000 x 2) + ($14,687.50 x 3) = 20,000 + 44,063 = 64,063 points
  • DIFFERENCE = 4,688 points

Here are the effective annual fees:

  • Citi Premier Annual Fee: $125
  • Citi Prestige Annual Fee: $450 – $250 airfare credit = $200

At 1.6 cents/point, those additional 4,688 points earned on the Prestige card will (almost) exactly cover the $75 of additional annual fee on the card (here I’m assuming that you will make use of the $250 air travel credit on Prestige, which effectively lowers the annual fee to $200). If the difference in yearly spending is greater, you’ll come out ahead when using the Citi Prestige card.

The Prestige now lets you redeem points at 1.6 cents each for AA/US flights.
As a Citi Prestige cardholder, your redemption rates for flights are higher than those of the Preferred or Premier card. They go even higher for American or US Airways redemptions!

Remember that these calculations only apply to the cards in a typical year with no sign-up bonus (and no Global Entry fee reimbursement, which is available once every 5 years on the Citi Prestige). This is also based on TPG’s valuation of 1.6 cents/point; if you don’t transfer them to partners to squeeze the most value out of them, or if you redeem points for travel on an airline other than American or US Airways (at 1.33 cents/point), your yearly difference in spending categories needs to be at least $5,639.10 to cover the $75 difference in annual fees.

The other big benefits of the card apply when traveling. As of October 19, the Citi Prestige includes complimentary Priority Pass membership, which allows you and your immediate family (or two guests) to enjoy over 700 lounges when traveling. In addition, you can access Admirals Clubs when traveling on American (again with your immediate family or up to two guests). With the lounge access and the increased value when redeeming points on AA/US, this card is an ideal product for those who primarily fly one or both of those carriers.

FINAL THOUGHTS

As I mentioned above, having both the Citi ThankYou Preferred and either the Premier or Prestige card can be a powerful combination, as you can transform your static ThankYou points earned on the Preferred card into the transferable points earned on the Premier/Prestige. The Preferred card by itself won’t offer as much of a return, but it’s a solid option for beginners.

If you’re just looking for one card, I would recommend the Prestige over the Premier so long as you can take full advantage of benefits like the annual $250 airline travel credit, lounge access, and 4th night free at hotels. Despite the higher annual fee, those benefits make Prestige the best value.

Which of these three cards do you prefer? Please share your thoughts in the comments below!