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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 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.
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.
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.
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.
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.
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:
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.
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.
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 Entry, a 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.
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.
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.
Update: Several readers have reported that there is a better offer available in Citibank branches. This offer is only available to CitiGold/Private Bank customers at the branch and offers a $350 annual fee. If you are a CitiGold/Private Bank customer and apply through an open market offer, a process will clean it up in the background and set you up with the lower annual fee of $350, but you will not get the higher incentive of 60,000 points which is only available in branch.
Know before you go.
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