Citi Premier: Should This Be Your Next Card?

Jul 8, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Citi is a TPG advertising partner.

Update: Some offers mentioned below are no longer available. View the current offers here- Chase Sapphire Preferred Card, Citi Premier® Card 

The Citi ThankYou Rewards program isn’t generally considered to be as valuable as its transferable point brethren, Amex Membership Rewards and Chase Ultimate Rewards. However, there are a couple of intriguing cards in Citi’s portfolio that provide a solid value proposition for certain travelers, especially if you’re into the program’s transfer partners. So, today we’ll take a closer look at the Citi Premier® Card — including its benefits, redemption options and more — before considering whether it would be a good fit for you.

In This Post

The Basics

The Citi Premier currently comes with a bonus of 60,000 ThankYou Points after you spend $4,000 in purchases within the first three months of account opening. This haul is worth $1,020 based on TPG’s most recent valuations, which peg the value of ThankYou points at 1.7 cents apiece, due to the value that can be obtained when you transfer your points to select airline partners. However, if you prefer the simplicity of booking airfare directly through the ThankYou Travel Center, you can still get 1.25 cents of value per point. So, you can expect to get at least $750 of value from this sign-up bonus.

It’s important to note that you won’t be able to earn the bonus on this card if you’ve received a new cardmember bonus for a Citi Rewards+, Citi ThankYou Preferred, Citi Premier or Citi Prestige card, or closed any of these accounts, in the last 24 months.

The information for the Citi Prestige has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.      

In addition to the sign-up bonus, the Citi Premier includes bonus earning rates for certain categories of spending:

  • Earn 3x points on travel, including (most) gas
  • Earn 2x points on restaurants and entertainment
  • Earn 1x points on all other purchases

The great thing is that Citi defines these purchases quite broadly. Here are the merchants included in the travel category:

“3 ThankYou Points for each $1 spent on purchases at airlines, hotels, car rental agencies, travel agencies/travel aggregators/tour operators, gas stations, commuter transportation, ferries, commuter railways, subways, taxis/limousines/car services, passenger railways, cruise lines, bridge and road tolls, parking lots/garages, campgrounds and trailer parks, timeshares, bus lines, motor home/recreational vehicle rentals and boat leases and rentals.”

Here’s the same list for restaurants and entertainment:

“2 ThankYou Points for each $1 spent on purchases at restaurants (including cafes, bars, lounges and fast food restaurants), and on select entertainment, including live entertainment, live theatrical productions, concerts, live sporting events, movie theaters, amusement parks (including zoos, aquariums, circuses and carnivals), tourist attractions (including museums and art galleries), record stores, video rental stores and on-demand internet streaming media.”

Earning a 5.1% return on all travel purchases is terrific. You’ll also earn 5.1% at gas stations, although gas purchases at warehouse clubs, discount stores, department stores and convenience stores are excluded. Plus, you’ll earn 3.4% return on a wide selection of dining and entertainment purchases.

When it comes time to redeem your ThankYou points, you’ll have many options at your disposal. However, only two options can provide more than one cent of value per point. The first of these options is to redeem your points for 1.25 cents each toward airfare booked through the ThankYou Travel Center, and those itineraries would be treated as revenue tickets and thus still eligible to earn miles.

Your points are worth 1.25 cents each toward airfare when you book through the Citi Travel Center. (Photo by JT Genter/The Points Guy)

The second option you should consider, which will allow you to extend the value of your ThankYou points even further, is to transfer your points to one of the program’s transfer partners. Although none of the major legacy carriers based in North America are transfer partners, there are transfer partners from each of the three major alliances.

Here are some TPG guides on how to maximize your Citi ThankYou Rewards points:

Other Benefits

We recently learned that Citi is slashing benefits on most of its cards as of September 22, 2019. For the Citi Premier, the following previously offered benefits will be discontinued:

Worldwide Car Rental Insurance, Trip Cancellation & Interruption Protection, Worldwide Travel Accident Insurance, Trip Delay Protection, Baggage Delay Protection, Lost Baggage Protection, Citi Price Rewind, 90 Day Return Protection, Roadside Assistance Dispatch Service and Travel & Emergency Assistance

This means that as of September 22, the Citi Premier’s benefits will include:

  • No foreign transaction fees
  • Extended warranty protection
  • Purchase protection covering damage or theft that occurs shortly after you make an eligible purchase
  • Citi Private Pass, giving you access to VIP concerts and other events

There are two important shopping protections on that list: damage and theft purchase protection and extended warranty protection. Purchase protection may repair, replace or reimburse you if a product you’ve recently purchases is damaged or stolen, while Citi’s extended warranty protection adds two years to most manufacturer’s warranties as long as doing so wouldn’t extend the total coverage past seven years. Citi has also promised that additional benefits will be introduced, but hasn’t provided details regarding these new benefits.

Related: The Best Credit Cards for Travel Protections

Is the Citi Premier Worth the Annual Fee?

So, how much would you have to spend on the Citi Premier to justify the annual fee? Let’s use TPG’s valuation of 1.7 cents per point to determine the break-even threshold, assuming you only use the card for travel expenses on which you’ll earn 3x ThankYou points:

$95 / ($0.017 * 3) = $1,863

If the figure of $1,863 seems daunting, remember that it works out to $156 per month, which is fairly low if you travel frequently or incur everyday travel expenses at home. If you’d rather use Citi’s valuation of 1.25 cents per point, you’d need to spend $2,534 on travel expenses per year to break even.

Even if you don’t spend much on travel, the Citi Premier may still make sense if you dine out or partake in entertainment on a regular basis. Check out the following table for the break-even threshold on dining and entertainment, assuming different spending thresholds for travel. (In this table, we assume TPG’s valuation of ThankYou points at 1.7 cents each.)

Annual Travel Spending Annual Dining and Entertainment Spending to Offset $95 Annual Fee
$1,863 ($156 per month) $0
$1,600 ($134 per month) $395 ($33 per month)
$1,200 ($100 per month) $995 ($83 per month)
$800 ($67 per month) $1,595 ($133 per month)
$400 ($34 per month) $2,195 ($183 per month)
$0 $2,795 ($233 per month)

The Citi Premier® Card also offers no foreign transaction fees on purchases made outside the US. By comparison, the Citi® Double Cash Card charges 3% on those purchases, which is the norm for cards that levy a fee for foreign transactions. If your travels take you abroad, and you don’t already have a card that waives foreign transaction fees, it may be worth paying the Citi Premier’s annual fee.

Indeed, the breakeven point between the Citi Double Cash and the Citi Premier — assuming you’d use both cards only for travel expenses abroad and you value ThankYou points at 1.7 cents each — is $1,558 per year. Here’s how the calculation breaks down:

  • Citi Double Cash: $31.16 of cash back – $46.74 of foreign transaction fees = $15.58 deficit
  • Citi Premier: $79.46 of Citi ThankYou points – $95 annual fee = $15.54 deficit

As you can see, you won’t justify the annual fee if you only spend $1,558 on travel abroad using the Citi Premier. But it doesn’t take much more spending on travel, gas, entertainment or dining expenses to break even.

Compared to Sapphire Preferred

The Chase Sapphire Preferred Card is probably the most comparable card to the Citi Premier, as the two have a number of very similar components:

  • $95 annual fee
  • Ability to book flights at a rate of 1.25 cents apiece through the issuer’s travel portal
  • Ability to transfer to numerous partners

However, the cards differ in two important areas: bonus earning rates and travel protections. As noted above, the Citi Premier earns 3 ThankYou Points per dollar spent on travel (including gas stations), 2 points per dollar spent on restaurants and entertainment and 1 point per dollar spent on all other categories. On the other hand, the Sapphire Preferred only offers 2 Ultimate Rewards points per dollar spent on travel and restaurants and offers 1 point per dollar spent on all other categories. Depending on your typical spending pattern in a given year, this could make a big difference.

If you’re trying to decide between the Citi Premier and the Sapphire Preferred, here are some sample calculations to help. Let’s say you have the following monthly expenses over the course of a year:

Using these assumptions, you’re spending a total of $2,000 per month on these cards, or $24,000 annually. However, the earning rates will play a large role in just how many points you’d earn. Here’s a table that breaks this down:

Bonus Category Citi Premier Chase Sapphire Preferred
Travel $500 x 3 points/$ = 1,500 points $500 x 2 points/$ = 1,000 points
Gas $300 x 3 points/$ = 900 points $300 x 1 point/$ = 300 points
Entertainment $200 x 2 points/$ = 400 points $200 x 1 point/$ = 200 points
Dining Out $500 x 2 points/$ = 1,000 points $500 x 2 points/$ = 1,000 points
Other $500 x 1 point/$ = 500 points $500 x 1 point/$ = 500 points
Monthly Totals 4,300 points 3,000 points

When you extrapolate these out to yearly totals, you’d get the following value from these earnings (based on TPG’s most recent valuations):

  • Citi Premier: 51,600 points x 1.7 cents/point = $877.20
  • Sapphire Preferred: 36,000 points x 2.0 cents/point = $720

As you can see, you’re getting roughly $150 of additional value each year from spending on the Citi Premier® Card when compared to the Sapphire Preferred.

However, especially with Citi removing all travel protections from the Citi Premier as of September 22, 2019, the Sapphire Preferred will provide significantly better travel protections going forward. These protections include trip delay protection, delayed baggage protection and other protections that can provide value when things go wrong.

Other Considerations

Shot of a young woman relaxing with her laptop at home. (Photo by Squaredpixels/Getty Images)
(Photo by Squaredpixels/Getty Images)

So should the Citi Premier® Card earn a spot in your wallet? The card currently offers a 60,000-point sign-up bonus that can offset the $95 annual fee for up to ten years, depending on how you redeem your ThankYou points. So, the card is clearly worth considering if you’re eligible for the sign-up bonus. But as far as keeping the card long-term, here are a few questions to ask yourself:

1. Do you spend more than $1,863 each year on travel including gas? If you don’t have another card that provides better earnings in these categories, then the Citi Premier could be a good fit for your spending habits. You might also find the card worth hanging onto if you travel internationally, but don’t have another card that waives foreign transaction fees.

2. Do you value an online shopping portal? One big drawback of the Citi Premier is that it doesn’t offer an online shopping portal. By starting at these sites (rather than going directly to a merchant’s site), you have the opportunity to earn bonus points or miles with a variety of programs. Chase does offer an Ultimate Rewards portal, but the ThankYou Rewards program does not. If that’s a critical perk to you, the Sapphire Preferred could be the better option. Of course, you’ll always be able to use airline shopping portals or cash-back sites like Ebates or Mr Rebates, but earning bonus transferable points could be much more lucrative.

3. Do you get value out of the ThankYou transfer partners? Another strike against the Citi Premier is the limited utility of the ThankYou Rewards program transfer partners. Even though the program has airlines in all three major alliances, it still lacks a legacy US carrier whereas Chase has United and American Express has Delta. That being said, there is some definite value to be found. And of course, you always have the option of redeeming points directly through the ThankYou Rewards travel portal, where each point is worth 1.25 cents apiece toward airfare. That can be a useful feature, especially if you have another card that also earns ThankYou points.

4. Do you have a non-premium ThankYou Rewards card? One scenario where the Citi Premier does offer great value is for current cardholders of another Citi card that accrues ThankYou points that are not transferable, such as the Citi Rewards+® Card. When you have both a premium and non-premium card in the ThankYou Rewards program, you can combine points across accounts and thus turn your entire balance into more flexible, transferable points (just like Chase Freedom (No longer open to new applicants) points turn from simple cash back to full Ultimate Rewards points when you have a premium Chase card).

5. Do you have friends or family members with ThankYou Rewards balances? One of the unique aspects of the ThankYou Rewards program is how easy it is to share points with other members. They don’t need to be family members or even authorized users; they just need to have an active ThankYou Rewards account. This gives you valuable flexibility with your points, as you can effectively pool your account balances to reach a desired award. Just bear in mind that when you do share, the transferred points must be used within 90 days or they’ll be forfeited.

6. Is your points and miles portfolio in need of diversification? Finally, the Citi Premier® Card can be another way to diversify your points and miles balances. It’s essential to have pots of travel currencies in a variety of programs, and Citi ThankYou points do offer additional flexibility, both with unique transfer partners and the ability to redeem points for airfare at 1.25 cents apiece (especially since airfare purchases through the ThankYou Travel Center are treated as paid tickets, and are thus eligible to earn redeemable and elite-qualifying miles). If you happen to have a need for miles or points on any of the aforementioned airline/hotel partners, or if you want additional points to cover an upcoming flight, the Citi Premier could be a good option for you.

Bottom Line

The ThankYou Rewards program can offer some tremendous value when used strategically. And, the Citi Premier® Card is one of the best ways to quickly earn a bunch of ThankYou points both in the first year and beyond. If you’re considering adding this card to your wallet, I hope this guide has helped you decide which way to go!

Interested in applying? Here’s the link to apply now for the Citi Premier® Card with a 60,000 point bonus.

The information for the Citi Prestige has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Additional reporting by Katie Genter and Mark Spivak.

Featured photo by filadendron/Getty Images.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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.