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One Year of Earning and Burning with the Citi Premier

Aug. 24, 2018
13 min read
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If you're looking to up your travel game, opening a new travel rewards credit card is a critical first step. In addition to offering lucrative (and often limited-time) welcome bonuses, these cards generally carry an array of bonus categories to boost your earning potential and additional perks to make your life easier or less costly. Adding a new card to your wallet can immediately enhance your ability to travel for free, especially in the first year, and today I'll update an earlier post in my series that looks at how rewarding a card can be in just one year.

Previous entries in this series have looked at numerous popular cards in this fashion, including the Amex Platinum, Southwest Premier Card and the Alaska Visa Card. Today's post will analyze just how valuable the Citi Premier® Card can be in just the first year of cardmembership.

Welcome Bonus and Benefits

As noted above, the Citi Premier is currently offering an enhanced sign-up bonus of 50,000 points after spending $4,000 on the card in the first three months, a haul that's worth $850 based on TPG's most recent valuations. You'll also earn 3x points on a wide variety of travel purchases (including most gas stations), 2x points on dining and entertainment purchases, and 1x point everywhere else. These points can be redeemed directly for travel at a rate of 1.25 cents per point or can be transferred to one of the ThankYou Rewards program's travel transfer partners, allowing you to potentially get even more value.

In addition to the earning side of the equation, the card carries several additional benefits, including trip cancellation/interruption insurance, trip delay coverage and price protection via Citi Price Rewind. While the card does carry a $95 annual fee, this is waived for the first year.

So if you open the Citi Premier, 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 the most recent year available (2016) to estimate what an “average” household would spend (and thus earn) on the Reserve in one year.

In doing so, I made the following assumptions:

  • Only the “Other lodging” category under “Shelter” can easily be paid with a credit card (since you’ll pay a fee for paying most mortgage and rent payments with credit cards), and these transactions earn 3x points as travel purchases.
  • The “Vehicle purchases” category under “Transportation” can’t be paid with a credit card, but all other transportation expenses can.
  • All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
  • All other expenses (including “Education”) can 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 cardmembership translate to ThankYou points:

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CategorySpendingEarning RatePoints
Sign-up bonusN/AN/A50,000
Food at home$4,0491 point/$4,049
Food away from home$3,1542 points/$6,308
Alcoholic beverages$4841 point/$484
Housing (other lodging)$7983 points/$2,394
Utilities, fuels and public services$3,8841 point/$3,884
Household operations$1,3841 point/$51,384
Housekeeping supplies$6601 point/$660
Household furnishings and equipment$1,8291 point/$1,829
Apparel and services$1,8031 point/$1,803
Transportation (gasoline)$1,9093 points/$5,727
Other vehicle expenses$2,8841 point/$2,884
Public and other transportation$6233 points/$1,869
Healthcare$4,6121 point/$4,612
Entertainment$2,9132 points/$5,826
All other expenses$3,4501 point/$3,450

As you can see, the “average” American consumer would earn over 97,000 ThankYou Rewards points, worth just over $1,600, in the first year alone. Not bad!

What do these points get you?

Of course, earning points is one thing, but knowing how to redeem them for maximum value is a completely different story. Fortunately, the ThankYou Rewards program has a variety of valuable redemptions, most of which involve transferring to the program's partners.

Here’s what a year’s worth of points on the Citi Premier gets you:

1. Round-trip business-class flight from the US to Japan

One of the ANA Star Wars 787s in Seattle on May 12, 2018 (Photo by Alberto Riva / The Points Guy)
You can redeem your ThankYou points for flights to Japan on ANA by transferring to Virgin Atlantic's Flying Club, and you may wind up on a Star Wars-themed plane! (Photo by Alberto Riva / The Points Guy)

If you're looking to get across the Pacific in comfort, this sign-up bonus can help you do just that! There are actually a couple of different options for accomplishing this. The first is by transferring your ThankYou points to Virgin Atlantic's Flying Club program. Unfortunately the carrier has gained notoriety in the frequent flyer world for the horrendous fees and surcharges it imposes on award tickets on its own flights. However, there are a handful of redemption partners that don't incur these fees, and one of the best is ANA. Virgin Atlantic uses a separate award chart for eligible ANA routes bookable with Flying Club miles, and the rates from the US to Japan are very reasonable. A round-trip flight from the Western US to Japan would set you back just 90,000 miles, and you'd need just 95,000 miles for any other US gateway. Some carriers require nearly that many miles for a one-way flight to Asia, so you'd be scoring a terrific redemption.

If you're more of a Oneworld kind of traveler, you also have the ability to get to Japan by transferring your points to Etihad Guest and booking award flights on American to Japan. Etihad's award chart for American-operated flights still uses the rates from before the 2016 AAdvantage program changes, so one-way business-class flights from the US to Japan clock in at just 50,000 miles apiece (American would charge 60,000 miles each way for the exact same flight). Availability isn't terrific, but you can use ExpertFlyer to set alerts for your desired flights and dates, allowing you to extract some terrific value from the program.

2. Up to seven round-trip, short(ish) United flights

Though far from the definition of luxurious, redeeming your ThankYou points for short-ish United flights (booked via Avianca LifeMiles) can save you a ton of money.

Avianca LifeMiles was added as a ThankYou Rewards transfer partner in November 2017, and while the carrier may not always deliver, its loyalty program's award chart has some hidden gems. One of the more unique options involves United flights within the US. The LifeMiles program separates the lower 48 states into three different groups:

United States 1: Connecticut, Delaware, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, New Hampshire, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington (D.C.), West Virginia
United States 2: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Tennessee, Texas, Wisconsin
United States 3: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming

(Note that LifeMiles’ Star Alliance award chart doesn’t include West Virginia or Washington state, but I’ve slotted them where they fit based on searches I’ve run.)

If your origin and destination both fall within a single of these groups, even if you connect outside, it'll cost you just 7,500 miles each way, or 15,000 miles round-trip. With the year's worth of points from the Citi Premier, you're looking at up to seven round-trip flights.

What's particularly nice about this option is that each region is home to at least two United hubs: Newark (EWR) and Washington-Dulles (IAD) both fall in United States 1, Chicago-O’Hare (ORD) and Houston (IAH) are both included in United States 2, and Denver (DEN), Los Angeles (LAX) and San Francisco (SFO) all appear in United States 3. This should give you plenty of options, assuming you can find availability, of course.

3. Round-trip business-class flight to Europe

Delta One
Flying Delta One to Europe and back is also within your reach with a year's worth of ThankYou points. (Photo courtesy of Delta Air Lines)

Looking for business-class trans-Atlantic flights? This haul can get a round-trip flight to Europe in business class in a few different ways, depending on how you plan to get there:

  • Delta flights through Virgin Atlantic: Another lucrative partner of the Flying Club program is Delta. If you book through Virgin Atlantic, you'll redeem fewer miles for flights to Europe on Delta metal than you would by using SkyMiles. A round-trip flight from the US to Europe in Delta One will set you back 100,000 Flying Club miles, though be aware that if said flight is to the UK, you'll be subject to some hefty taxes, fees and surcharges.
  • Sky Team flights through Flying Blue: The loyalty program of Air France, KLM and others provides another great option for crossing the Atlantic in style. Though Flying Blue did change its redemption scheme as of June 1, 2018 (creating some illogical award rates), many US gateways still offer one-way business-class flights for 53,000 miles. Use the program's online calculator to explore these rates and then search for availability as usual.
  • American flights through Etihad: As noted above, Etihad typically charges fewer miles for American-operated flights in premium classes that the AAdvantage program does, and this holds true for flights to Europe. A round-trip flight on American from any destination in the US to Europe would cost you 100,000 Etihad Guest miles; the exact same itinerary would require 115,000 AAdvantage miles.

4. $1,339.54 worth of paid flights

(Photo by Chuttersnap via Unsplash)
You could also book paid flights on virtually any airline with the 100,000+ ThankYou points you'll earn. (Photo by Chuttersnap via Unsplash)

The last redemption option I'll highlight is the least "glamorous" but still can represent some terrific value for the points earned on the Citi Premier. In addition to the ThankYou Rewards program's transfer partners, you have the ability to redeem your points directly for flights through the ThankYou travel center at a rate of 1.25 cents per point. Your 107,163 points are thus worth $1,339.54 toward airfare booked in this fashion.

Why would I recommend this when the above options result in much more valuable redemptions? Well, it’s important to remember that redeeming points directly for travel typically results in those flights being categorized as regular revenue tickets. This means that you’ll earn miles that can be redeemed for future flights along with credit toward elite status qualification. If it’s looking like you’ll come up just short of reaching that next tier of status by the end of the year, now’s a great time to add the Citi Premier to your wallet to close that gap thanks to the increased sign-up bonus.

Bottom Line

The Citi Premier® Card offers a terrific value proposition in the first year of cardmembership thanks to its waived annual fee, lucrative bonus categories and large sign-up bonus. However, these perks and others may make it a great fit for your wallet in the long run as well. While the ThankYou Rewards program may not have as many useful partners as its transferable point program brethren, there are some fantastic ways to maximize your ThankYou points in the first year and beyond.

Bear in mind that this calculation may be a bit too conservative:

  • The calculation assumes that you’re an average consumer. If you typically spend more in a year, then your earnings will be even higher.
  • The calculation assumes that you don’t make any purchases through an online shopping portal. While there's no ThankYou Rewards-specific portal, you can use cash-back sites like Ebates or airline-affiliated portals like the AAdvantage eShopping site to boost your earnings even more.
  • The calculation assumes that you only open one card. Other travel rewards credit cards (like the Capital One Venture Rewards Credit Card or the Citi / AAdvantage Platinum Select World Elite Mastercard) can be opened and used right alongside the Citi Premier for even more earning potential.

Regardless of these last points, I certainly hope that this post has demonstrated just how lucrative a new card like the Citi Premier® Card can be in just a single year!

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