Is the Citi Premier worth the annual fee?

Editor's note: Citi is a TPG advertising partner.

The Citi Premier® Card definitely receives less attention than other travel rewards credit cards, especially when you compare it to premium credit cards. It also lost the majority of its consumer protections and insurance benefits back in 2019.

With that in mind, you might wonder whether the $95 annual fee on the Citi Premier card is worth it. Let's take a look.

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Welcome bonus

In examining whether the card is worth it, let’s start with the introductory bonus offer.

With the Citi Premier, you can earn a sign-up bonus of 80,000 ThankYou® Points points after you use your new card to make $4,000 in purchases within the first three months from account opening. TPG values these points at 1.8 cents each, so the bonus is worth $1,440.

Citi ThankYou Points have increased in value over the past two years thanks to its transfer partners. A good example is Etihad Guest, which you can often use to book American Airlines award flights cheaper than booking directly with American Airlines' own AAdvantage program. You can also use Turkish Airlines Miles&Smiles miles to book lie-flat business class awards to Hawaii for just 12,500 miles per person each way.

On the hotel side, you can transfer your points at a 1:1 ratio to Wyndham Rewards and at a 1:2 ratio to Choice Privileges. These programs can both provide excellent value not just at budget properties but also when traveling near holidays, when cash rates are high but points rates aren't prone to fluctuation.

Related: 5 of the best Citi ThankYou Rewards redemption sweet spots

Solid points earning

While many other cards find their strengths in the perks and benefits they offer — think reimbursement for your Global Entry application fee or lounge access memberships — the Citi Premier doesn't offer those benefits. But it also doesn't have a $400-plus annual fee like credit cards that tend to offer those benefits.

Instead, if you ask people what they like about the Citi Premier card, the most common answer may be that it earns points in popular spending categories.

Cardholders earn 3 points per dollar on air travel, hotels, gas stations, supermarkets and at restaurants (including takeout). Since TPG values these points at 1.8 cents apiece, this represents a 5.4% return on spending. Plus, these bonus categories apply worldwide, as opposed to some cards that only offer these bonus points on purchases within the U.S.

Outside of these categories, you'll earn 1 point per dollar on all other purchases. That's a 1.8% return on spending.

Related: How to redeem Citi ThankYou points for maximum value

$100 annual hotel credit

While this benefit sounds promising and might be great when staying at boutique, independent properties, it may not lead to the $100 in savings you expect from the benefit's name.

When testing out the $100 hotel credit on the Citi Premier, TPG found that the benefit often was significantly less than $100. That's because Citi's travel portal doesn't always have the lowest rate — especially when you factor in members-only rates for your favorite hotel chain.

The $100 hotel credit can be used once per year on a hotel stay that costs $500 or more, and the stay must be booked through thankyou.com — Citi's travel portal.

Related: The Citi Travel portal is getting a complete makeover: Here’s what to expect

Cardmember protections

While the card has lost numerous protections over the past few years, it retained two that can be valuable: extended warranty protection and damage and theft protection.

The extended warranty protection on the Citi Premier adds an additional 24 months to a manufacturer's warranty. The damage and theft protection benefit can provide for the repair or replacement of an item that's damaged or stolen within 90 days of purchase (up to $10,000 per item and a $50,000 annual limit).

World Elite Mastercard benefits

As a World Elite Mastercard, you can enjoy multiple benefits and perks. These include cellphone protection and Global Emergency Services, a $5 Lyft credit when you take at least three rides in a month and a ShopRunner membership that provides free two-day shipping for numerous online purchases. You'll also get rental car elite status and benefits with Avis, National and Sixt.

Entertainment perks

While not particular to the Citi Premier card, anyone with a Citi credit card can access Citi Entertainment. This can provide access to exclusive events, and priority access or advance ticket sales to concerts, shows and performances, film festivals and more.

Bottom line

While it might not be the best card for everyday spending, there’s plenty of value to be had with the Citi Premier card. Unlike other credit cards with luxurious benefits and automatic elite status, this card tends to provide its value through the points you earn when using the card in its bonus categories.

To be honest, you likely won't achieve enough value from the $100 hotel credit perk to offset the $95 annual fee. However, if you are able to save money with the cell phone coverage or cardmember protections, these alone can provide hundreds of dollars in savings.

If not, the question of whether or not the Citi Premier's annual fee is worth it will come down to the points you earn, how you value them and which other cards in your wallet earn points in the same categories.

Official application link: Citi Premier® Card with an 80,000-point welcome bonus after you spend $4,000 on your card within three months of account opening.