[Update] Citi has now announced changes via TPG. The 4th night free benefit will be limited to 2 times per calendar year, and the annual fee will become $495. See the update part of Citi Prestige review for more details.
Today one of our readers reported that a new point earning structure will come to Citi Prestige later this year. He got this information by a Citi representative when calling for a retention offer. We have further corroborated this update with Citi and we anticipate seeing these changes coming into effect early next year!
New Citi Prestige earning structure
The change includes:
- 5x TYP on dining
- 5x TYP on air tickets
- 3x TYP on travel
- 2x TYP on entertainment
Even better, Citi would keep the following perks that make the Prestige card a great value proposition in the first place:
- 4th Night Free
- $250 annual air travel credit
He was also told that the change would be put into effect on Nov 9th 2018, which seems too early to us. We then phoned Citi Prestige customer service ourselves, and the representative mentioned the same upcoming benefits. However, we were specifically told that this change will come into effect in Jan 4th, 2019. Given the fact that it’s less than 3 weeks from the purported November change date, we tend to view the 4th of Jan to be more credible.
The largest uncertainty comes from its annual fee. Right now Citi Prestige has an annual fee of $450, but effectively can be offset to $200. However, given the enhanced earning opportunities, it is possible that the annual fee will be raised as well.
What does this mean to Citi’s competitors?
If the rumored change is true, Citi Prestige will become an extremely competitive product out there.
It used to be the case that Citi Forward offers 5x TYP per dollar spent on dining. However this product was discontinued and all Forward cards eventually became Citi ThankYou Preferred. Since then, no credit card issuer offers persistent high-return on dining for a while. All you can get is either quarterly 5% cashback with Discover and Chase Freedom, or 2x points with Chase Sapphire Preferred and old Citi Prestige/Premier.
However, it appears that the situation has begun to improve again (in customer’s favor).
First came the true game-changer, Chase Sapphire Reserve, who offers 3x earning on dining. It was so popular that Chase is essentially losing money in acquiring customers. When you hold CSR you can redeem Chase UR points at 1.5 cent each, so it represents at least 4.5% return on dining expenses.
Soon Barclays followed suit and launched a co-branded credit card with Uber that offers 4% cashback on dining. What’s particularly impressive is that this card has no annual fee. This offers a great potential for someone who might not be a big spender on restaurants.
More recently, Amex upped the game with their new Amex Gold card. It now offers 4x MR earning for restaurant spending in the United States as well as $120 annual dining credits that can be applied to select partners. If you factor in the value of Amex MR points (ranging from 1.5 to 1.8 cent depending on how you want to use them), the potential return could be as high as 7.2%.
Now once Citi Prestige earns you 5x points on dining, on the surface it will become the card with the highest return in dining. I found ThankYou Points to be quite useful because of some of its unique partners (LifeMiles, for example). Putting a value of 1.6 c/pt for ThankYou Points, this card would yield a whopping 8% return on dining expenses. Plus, it is always a good idea to diversify your point portfolio to hedge against potential devaluations.
What does this mean to you?
If you are currently holding Citi Prestige, be sure to keep it, at least until the official announcement is made. The new earning structure makes this card very appealing. So all in all we consider it to be mostly good news (albeit some uncertainties remain).
If the benefit changes are accompanied by a hike in the annual fee, perhaps you need to re-evaluate whether it’s worth it to keep Citi Prestige. That being said, I personally often use Citi’s 4th Night Free benefit and it has saved me a ton in the past. Even if the annual fee might increase, I would most likely keep this card in my portfolio.
What do you make of this change to Citi Prestige?
Hat tip to reader 池鱼