Why I’m downgrading my Citi Prestige despite getting $1,200 in value last year
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It’s that time of year again when I get into an argument with everyone on the internet about the merits of the Citi Prestige® Card. I usually make a pretty good case for why keeping it makes sense for me, but that argument has been losing steam lately. For starters, the Citi Premier® Card began offering new 3x category bonuses last year, which lined up much better with my new quarantine eating habits.
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.
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While I earned a lot of points on dining and travel last year, it was from a single trip I took with my family. I got to charge everyone’s airfare, hotels and some restaurant purchases to my card, earning thousands of points. While I earned a lot of points on that trip and managed to save cash with the fourth-night-free benefit, I’ll be spending less on travel this year, thanks to the points I’ve stockpiled in quarantine. So the Citi Prestige, despite all of its perks, isn’t a great fit for me anymore. Here’s a detailed look at why I’m downgrading the card even though it got me more than $1,200 in value last year.
Value of travel credits: $250
The $250 annual travel credit makes the Citi Prestige’s $495 annual fee much more palatable. In fact, I wish more premium credit cards would expand this benefit to all travel, rather than focusing on a specific airline or hotel (your move, Amex). Beyond its flexible travel use, Citi also expanded the credit to supermarkets and restaurants all the way through December 2021.
Last year, I managed to quickly max out this benefit on grocery purchases. This year I put it to use at two of Chicago’s best restaurants: Girl & the Goat and The Purple Pig. It was a fun splurge, made all the more rewarding when the entire tab was offset by the $250 travel credit.
Needless to say, I got my money’s worth over the last two years. As for 2022, I don’t anticipate any issues finding a way to spend $250 on travel. If vaccine access expands to all adults by May 2021, I will probably be traveling abroad by June. The travel credit will help offset award taxes and fees.
4th night free: $175
The Citi Prestige’s fourth-night-free benefit is always the toughest one for me to maximize. It’s rare for me to spend four consecutive nights at any hotel but when I do, I try to do it as cheaply as possible. That means I’m either redeeming points for the stay or booking a cheap cash rate where the fourth night free gets me poor value.
Last year, I struck a nice balance by locking in a $175 nightly rate on a suite at the Hagia Sofia Mansions in Istanbul. Because of an error on the website, I had to call the Citi concierge to complete the reservation. The agent ended up booking the stay directly on the Hilton website, securing me the Hilton Honors discount and refunding $175 to my card a few weeks later. That stay not only qualified for Diamond elite benefits, but I also earned almost 16,000 points.
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Whether I’ll be able to use this perk again this year remains up for debate. I’ve been stocking up on Hyatt and Marriott points during the pandemic and would like to redeem them before an inevitable devaluation hits.
Value in points: $796
Last year, I spent $28,381.85 in purchases on my Citi Prestige and earned 46,848 points. Don’t panic – I don’t have a late-night shopping addiction driving me into massive debt. The majority of that spending consisted of mortgage payments made through Plastiq. I earn at least 3,000 “fee-free dollars” with Plastiq every month from a story I wrote years ago for another publication. To this day, it generates enough referral credits to offset fees on these mortgage payments.
TPG values Citi ThankYou points at 1.7 cents each, so the points I earned with my Citi Prestige are worth about $796. While that point value is terrific, it’s important to remember that most of those points came from non-bonus spending. I would have earned the same 1 point per $1 spent on mortgage payments charged to the Citi Premier.
Only 17,816 points came from travel and the odd restaurant purchase. So am I better off with a Citi Premier Card?
- 5x at restaurants – 3,153 points
- 5x on air travel – 7,066 points
- 3x at hotels – 7,597 points
Comparing earnings on the Citi Premier
If I had channeled all of that dining at restaurants, air travel and hotel spending to my Citi Premier Card, I would have earned just 13,728 bonus points. The Premier Card earns 3x points in all of these categories, meaning I would earn 4,088 fewer points than with the Prestige. Using TPG’s valuations, that’s about $69 in value I’d be giving up. However, I would also be paying a much lower annual fee ($95 rather than $495).
Of course, my spending habits going forward will be different. While I will be traveling more in the latter half of 2021, I’ll be using the points I’ve been saving up over the last year. Nearly all my air travel and hotel spending came from a family trip where everyone pitched in at the end, so those weren’t just my travel expenses. I don’t know if a trip like that will happen again in 2021 or after, so the 5x bonus from the Citi Prestige isn’t going to be as lucrative as it was last year.
More importantly, Citi did away with all travel protections, making the Citi Prestige less than ideal for travel purchases. I’m applying for The Platinum Card® from American Express — with its $550 annual fee (see rates and fees) — which earns 5x on flights booked directly with the airline (up to $500,000 on these purchases each calendar year) and hotels booked through Amex Travel. It also offers better travel protections and more valuable points.
When you’re deciding whether to cancel or keep a credit card, it’s really important to do the math and break down how much value you’ve gotten out of it in the last year. In my case, despite the pandemic and the fact that I took just one trip last year with family, I still managed to get more than $1,200 worth of value out of my Citi Prestige. However, when you factor in the difference in category bonuses between this card and the Citi Premier, that value drops to around $473.
Considering that I’ll book most of my travel this year on points, the 5x bonus from the Citi Prestige Card isn’t a big sell for me anymore. I will also get more value out of the Citi Premier Card’s 3x grocery bonus, while the Amex Platinum Card will allow me to get valuable perks on hotel stays.
The fourth-night-free benefit seems like a useful perk but last year was maybe the second time I ever used that benefit. Through the Platinum Card, I can get third- and fourth-night-free deals at select hotels when booking with Amex Fine Hotels & Resorts.
The Citi Prestige’s annual travel credit is great, but I do have other premium cards that offer similar credits. Granted, these credits are less flexible than the Citi Prestige’s, but since I’m using mostly points for travel anyway, that won’t be a major issue.
I also realize that while 5x on travel from the Citi Prestige is nothing to scoff at, I can earn 5x from the Amex Platinum Card on most travel expenses. Those points are valued at 2 cents each and are going to be more useful to me.
All things considered, downgrading the Citi Prestige Card seems like the best move for me.
Update: After writing this story, I reached out to Citi and got a retention offer decent enough to make me reconsider. If you’re on the fence about whether to cancel or keep a credit card, it’s worth reaching out to your bank to see if they can offer you an incentive to keep the account open. These offers aren’t always available, so assess your decisions acccordingly.
For rates and fees of the Amex Platinum card, click here.
Featured photo by The Points Guy.
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