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I often discuss how helpful credit card sign-up bonuses and spending can be for earning award travel, but some readers are intimidated by the idea of opening too many new accounts. So today, TPG Senior Points & Miles Correspondent Nick Ewen demonstrates how much even a single card can offer you in travel rewards.
Award travel can be a daunting hobby to take up, especially when it comes to credit cards. If you don’t travel regularly for work, your everyday spending habits play a huge role in earning (and then redeeming) points and miles. However, with so many options, you may not know where to start. In this post, I’ll continue my series looking at how easy it is to earn rewards by opening and using even a single card for a year. Previous posts looked at the Chase Sapphire Preferred Card, the Citi Hilton HHonors Reserve Card and the Chase Ink Plus Business Card. Today, I’ll focus on a card I recently added to my wallet: the Citi ThankYou Premier Card.
Let’s start with a quick overview of the card and why it’s such a solid product. Just last month, Citi announced an increased sign-up bonus of 50,000 ThankYou points after making $4,000 in purchases within the first three months of opening an account. Past bonuses were actually tiered, with the bulk of the points coming in year two (after paying the annual fee), so this was a terrific improvement. My fall review of the Citi Premier listed the tiered bonus as a major drawback to the card, but this new offer led me to apply for it just a couple of weeks ago. The new sign-up bonus alone is worth $850, based on TPG’s most recent valuations.
The card is worthwhile for these one-time bonuses alone, but it’s also well-suited for everyday use, especially with the new category bonuses that went into effect last month. As of April 19th, you earn 3 ThankYou points per dollar spent on a wide range of travel expenses (including gas), 2 points per dollar spent on dining and entertainment and 1 point per dollar everywhere else. Points can be transferred to a variety of airline programs (the newest partners include Qantas, Virgin Atlantic and Air France) or redeemed directly for travel at a rate of 1.25 cents per point. This card also has no foreign transaction fees, and while it does come with a newly reduced $95 annual fee, the fee is waived for the first year.
So if you open the card, earn the sign-up bonus and use the card exclusively for the first year, where does that leave you? Obviously, the answer depends on your spending patterns, so for this analysis I used consumer-expenditure data from the Bureau of Labor Statistics for 2013 and 2014 to estimate what an “average” household would spend (and thus earn) on the Citi ThankYou Premier.
In doing so, I made the following assumptions:
- 60% of “Housing” expenditures cover mortgages or rent, and thus can’t be paid with a credit card (unless you’re willing to pay high fees by using a service like ChargeSmart).
- “Transportation” expenditures are split evenly between car payments (which typically can’t be paid with a credit card), gasoline and other transportation costs (parking, tolls, train/subway/bus tickets, etc.).
- All “Healthcare” and “Other” expenditures can be paid with a credit card.
- All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
Again, your situation may differ substantially, so feel free to adjust these assumptions in order to calculate your own earning potential.
Here’s a quick table that shows how these spending patterns in the first year of card membership translate to Citi ThankYou points:
|Food – At home||$3,977||1 point/$||3,977|
|Food – Away from home||$2,625||2 points/$||5,250|
|Apparel and services||$1,604||1 point/$||1,604|
|Transportation (gasoline)||$3,001||3 points/$||9,003|
|Transportation (other)||$3,001||3 points/$||9,003|
|All other expenditures||$3,267||1 point/$||3,267|
As you can see, the “average” American consumer would earn 97,558 ThankYou points in the first year. Not too shabby!
What Does This Get You?
Earning points is one thing; knowing how to redeem them for maximum value is an entirely different story. Though not quite as flexible as Ultimate Rewards points, ThankYou points can still be used in a variety of ways. Here’s a sampling of what you can do with one year’s haul:
1. Singapore Suites Class from New York-JFK to Frankfurt to Singapore. Arguably the most valuable airline partner in the ThankYou Rewards program, Singapore Airlines has one of the most sought-after first-class products in the world: Suites Class on the A380. The airline currently operates this aircraft on flights from New York-JFK to Singapore, with a stop in Frankfurt, and award availability is actually decent. This one-stop flight would require 93,750 KrisFlyer miles (plus ~$285 in taxes & fees), giving you over 20 hours of bliss at 35,000 feet.
Even if you don’t snag an award flight on the A380, Singapore’s other first-class products are top-notch, as TPG discovered on the carrier’s 777-300ER earlier this year. Other routes available with this first year’s haul of ThankYou points include San Francisco to Hong Kong (70,125 miles + ~$51), San Francisco to Seoul (74,375 miles + ~$203) and Zurich to Singapore (91,375 + ~$220). For more information, be sure to check out Eric Rosen’s post on how to book Singapore Airlines first class awards.
2. Round-trip business-class flights through Flying Blue Promo Awards. Every month, Flying Blue, the loyalty program of both Air France and KLM, releases a list of promo awards that offer discounted redemptions on specific routes. For July and August, the lone North American promotion is for flights from Dallas to Europe (or vice versa). If you book your flights this month, you’ll pay just 93,750 miles for round-trip business class, though you’ll also be responsible for a few hundred dollars in taxes and fees.
Other promo awards outside of North America that fall under the 97,558-mile threshold include Europe to Jakarta (80,000 miles round-trip in premium economy), Europe to Beijing (75,000 miles one-way in business class) and Europe to St. Maarten, Punta Cana or Havana (90,000 miles round-trip in premium economy). Not a bad opportunity to follow in TPG’s footsteps and visit Cuba!
Past months have seen much better offerings for these awards; for example, April’s list of promo awards included 25-50% discounts on business-class flights to Europe from Atlanta, Miami, Minneapolis and New-York JFK. Be sure to check back under the Flying Blue category at the beginning of each month to see the newest list of destinations available at a discounted rate.
3. Virgin Atlantic Upper Class flights to several destinations. Virgin Atlantic became a ThankYou Rewards transfer partner at the beginning of 2015, allowing you to convert ThankYou points into Flying Club miles at a 1:1 rate. Several of Virgin Atlantic’s long-haul destinations cost just 80,000 miles round-trip in business class, including:
- New York (JFK and Newark)
You could also transfer your points to Virgin Atlantic and redeem them for a round-trip flight in premium economy to anywhere the airline flies (Hong Kong, the most expensive destination, requires just 80,000 Flying Club miles for round-trip premium economy tickets from London). Just be prepared to shell out quite a bit of cash in addition to the miles; round-trip business class flights from the U.S. to London will typically set you back around $1,300 in taxes and fees.
4. A seven-night Royal Caribbean cruise. Another way to redeem your ThankYou points is by booking travel directly at a rate of 1.25 cents per point. The points you earn in the first year (with the above spending patterns) are thus worth just over $1,200 toward flights, hotels, rental cars and cruises. A quick search through the Citi ThankYou Travel Center uncovered a variety of cruise options that would fit within this budget, including a seven-night Southern Caribbean cruise on Royal Caribbean, with stops in St. Thomas, St. Croix, Antigua, St. Lucia and Martinique.
For a complete list and to book a cruise using your ThankYou points, call a rewards specialist at 1-800-THANKYOU.
5. Etihad First Apartment flight(s). Another sought-after first-class product is Etihad’s First Apartment, available exclusively on its A380 aircraft. This plane currently flies between Abu Dhabi and Sydney/London, though it will also fly between New York and Abu Dhabi starting in December. While it’s generally a better deal to redeem partner miles for Etihad award flights, you can transfer your ThankYou points directly to Etihad Guest. In fact, through tomorrow, the program is offering a 25% bonus on these transfers, opening up a variety of ways to use your points:
- London to Abu Dhabi: Typically about 55,250 Etihad Guest miles for a one-way first-class flight, you’d only need to transfer 44,200 ThankYou points (or 88,400 points for a round-trip flight).
- New York to Abu Dhabi: Typically about 111,000 Etihad Guest miles for a one-way first-class flight, you’d only need to transfer 88,800 ThankYou points.
- Sydney to Abu Dhabi: Typically 120,896 Etihad Guest miles for a one-way first-class flight, you’d only need to transfer 96,717 ThankYou points.
The Citi ThankYou Rewards program was an afterthought in the points and miles game for a while, but with last year’s announcement of new transfer partners and new bonuses on both the Citi ThankYou Premier Card and Citi Prestige Card, it is clearly trying to establish itself as a key player in the credit card market. Keep in mind, too, that the above calculations may be too conservative:
- The calculation doesn’t include any online shopping portal bonuses.
- The calculation assumes that you’re the average consumer. If you typically spend more in some of the bonus categories each year (I definitely do at restaurants), then your earnings will be even higher.
- The calculation assumes that you only open one card. Other products with similar transfer partners (such as the Chase Sapphire Preferred Card and the Starwood Preferred Guest Credit Card from American Express) can be opened and used alongside the Citi ThankYou Premier for even more earning potential.
These items notwithstanding, I hope I’ve illustrated that one card (especially in the first year) can open up a wealth of redemption possibilities.
How would you redeem one year of points from the Citi ThankYou Premier?
- Earn a $100 statement credit after you make $1,000 in purchases on the Card within your first 3 months of Card Membership.
- Plus, earn an additional $100 statement credit after your first purchase on the Card at a participating SPG® or Marriott Rewards® hotel within your first 6 months of Card Membership.
- From now through July 31, 2018: Earn 2 Starpoints® for every dollar of eligible purchases on the Card at participating SPG® and Marriott Rewards® hotels. Earn 1 Starpoint for all other eligible purchases.
- On August 1, 2018, SPG will convert every one Starpoint in a loyalty member account to three points. In general, corresponding redemption changes will occur. Visit members.marriott.com for details.
- Effective August 1, 2018: Earn 6 points for every dollar of eligible purchases on the Card at participating SPG and Marriott Rewards® hotels. Earn 2 points for all other eligible purchases.
- No Foreign Transaction Fees on International purchases.
- Earn free nights at over 1,500 hotels and resorts in over 100 countries with no blackout dates. Some hotels may have mandatory service and resort charges.
- Enjoy complimentary, unlimited Boingo Wi-Fi on up to four devices at more than 1,000,000 Boingo hotspots worldwide. Enrollment required.
- $0 introductory annual fee for the first year, then $95.
- Terms Apply.
- See Rates & Fees