Citi recently introduced a slew of negative changes to credit cards like the Citi Prestige. It has everyone wondering whether the card has any redeeming qualities left. It does carry a hefty annual fee and with these benefits going away, it may not be worth keeping.
In addition to removing Citi Price Rewind, Citi is eliminating travel protections, further limiting the 4th-night free benefit, increasing the annual fee by $45, and eliminating the 25% air travel bonus.
If you’re a Citi Prestige cardholder, you may be wondering whether it’s time to dump this card. I think you should consider it. Especially, since many of the Citi Prestige card’s best benefits can be recouped with other premium credit credit cards like the Sapphire Preferred and Amex Platinum Card. Why keep paying ~$500 annual fee when you can get those benefits elsewhere?
Replacing the Citi Prestige 4th night free benefit
Benefits like the Citi Prestige card’s complimentary 4th night free on paid bookings have so far helped justify the high annual fee. When news broke that the 4th night free would be limited to two bookings per year, it wasn’t a deal breaker. After all, that 25% hotel discount could still be substantial enough to justify the annual fee.
Now, the 4th-night-free benefit will be further devalued because bookings will be prepaid and no longer eligible for rewards or elite credit. Paying for a hotel stay and not earning points is no bueno.
You’ll now have to weigh the savings against the points and elite qualifying nights you’re giving up. Chances are the cash savings are going to be the better option, but it’s one more thing to think about when booking hotels with the Citi Prestige Card’s 4th-night free benefit.
The good news is that other cards can substitute this benefit. For starters, Amex Fine Hotels & Resorts sometimes offers the third and fourth night free at select hotels. The same is true for the Visa Signature Hotels program.
If you have a qualifying credit card (i.e. Amex Platinum, Chase Sapphire Preferred, etc.), you can utilize this benefit. Of course, there are limited hotels participating in these programs and offering free nights, but you could still save money.
25% air travel bonus
Citi took an equal opportunity approach to devaluing benefits. In addition to taking all the fun out of hotel bookings, they’re also doing away with the 25% bonus on airfare. No more 1.25 cents per point. Now it’s down to just 1 cent.
It’s not the same, but the occasional Citi airline transfer bonus can take the sting out of the loss of this benefit. In fact, Citi is currently running a 25% FlyingBlue transfer bonus through July 20. I’m personally going to use my ThankYou points for that promotion so I can score discounted business class tickets on my favorite airline, KLM.
FlyingBlue has good availability to Europe and redeeming points online is a breeze. Taxes are higher than, say, a United award redemption, but I can offset those with via manufactured spending.
Lost travel protections
Of all the Citi card benefits being devalued, travel protections seem to sting the most. On September 22, Citi will eliminate trip cancellation and interruption protection, worldwide travel accident insurance, worldwide car rental insurance, lost bag protection, and roadside assistance.
It’s brutal. And a surprising move, considering Citi was courting frequent travelers with this card and clearly competing with the Amex Platinum and Sapphire Preferred. Decimating their most valuable travel benefits is pretty baffling.
I’m not surprised that Citi is citing a lack of usage for the reason they’re doing away with these benefits. The average consumer probably isn’t aware of them. But doing away with Citi Price Rewind? They boasted about this feature in commercials. It’s something I closely associate with the Citi brand.
I’m very surprised and disappointed to see this go. But then again, considering the benefit was capped at $200 per year, it’s not a massive loss. Besides, there are other credit cards that still offer price protection, so you can still get this benefit without the Prestige Card.
Most of the travel protections (i.e. primary rental coverage, trip cancellation + interruption protection, trip delay coverage, etc.) are covered by the Sapphire Reserve. And since everyone and their grandmother (literally) has this card in their wallet, the loss of this benefit on the Citi Prestige card isn’t going to be massive. Except to Citi. Because with the world in such a dire state, who is going to forego trip insurance (or pay extra for it) to earn Citi ThankYou points?
Loss of category bonuses
With the loss of travel protections, 5x air travel and 3x hotel category bonuses are inadvertently affected. After all, if you’re not getting all those extra travel benefits, why bother charging paid travel to the Citi Prestige card?
5x points on flights and 3x on hotels
The Amex Platinum Card earns 5x on flights and prepaid hotels booked directly or through Amex Travel. The Sapphire Reserve only offers 3x points. Depending on how you value Chase Ultimate Rewards points vs. Amex Membership Rewards, 3x points might not be a bad tradeoff for 3-5x ThankYou points.
That being said, Amex and Citi have many of the same transfer partners. So it’s not like you’re losing out substantially by earning 5x Membership Rewards points (or 3x Ultimate Rewards) instead of 5x from Citi.
5x points at restaurants
As for the 5x restaurant bonus? The American Express Gold Card pays out 4x on dining. The Chase Freedom occasionally offers 5% back as part of its rotating category bonuses (limited to $1500). Even the Barclay Uber Visa offers 4% cash back on dining, including UberEats (referral code eats-uberpointchaser). You can pretty easily replace the 5x Citi ThankYou points on dining with these other credit cards.
Citi Prestige annual fee increase
To add insult to injury, the Citi Prestige card’s annual fee is increasing to $495. Citigold and Private Bank clients will continue to pay a discounted rate of $350 per year. I’m not one of these accountholders and I’ve had all the premium card annual fee hikes I can take.
I’ll finally cancel this card once I’ve earned enough points visa gift card churning to get the most out of that 25% FlyingBlue promo. It ends in July, so there’s no sense in cancelling the Prestige Card now, especially since the annual fee isn’t due until next March.
I will eventually replace the Citi Prestige with a Citi Premier card because Citi ThankYou points are still useful. Even though I no longer drive a gas-powered car, I can find ways to use the 3x gas station category bonus.
Do you plan on keeping the Citi Prestige card after September? How will you substitute the Citi Prestige card benefits being discontinued this fall?
Nice column! Having had the Prestige card for several years, I decided to cancel it when it renewed last month. The news that the TY points would no longer garner the 25% bonus when redeeming for airfare was the impetus for me to cancel. I had the card back when TY points were worth 1.6 cents for AA fares. Then it dropped to 1.25 cents on any airline, and the news that it was dropping to a penny a point in the fall, coupled with the 4NF limitations and increase in annual fee pushed me over the edge. While the 5X points for airfare was enticing, now with the elimination of travel insurances, why on earth would one purchase air using the card? For that matter, even basic credit cards come with car rental insurance. Citi likely hopes that AmEx and Chase will follow their lead, but I wouldn’t bet on it. None of the other card issues who offer Priority Pass have dropped the restaurant benefit yet, after AmEx announced they would be doing so.
Exactly. The lack of travel protection makes putting thousands of dollars on travel too risky for just 5x points. I don’t see Chase following Citi’s lead and Amex has a reputation for offering exceptional purchase and travel protections. But you never know. This could lead to a Delta – United – AA style domino effect for credit card companies.
can you downgrade it to a no annual fee card instead of cancelling it
Absolutely
Yes you can downgrade. I’m still on the fence. I want the sign-up bonus from the Premier card but won’t qualify for it for another 7 months.
I just got my Prestige a couple months ago. Can I cancel it and be eligible to get the Premier card and bonus? If I transferred all points out to flying blue before closing, I could avoid losing points. A little confused.
When did you get your Premier card? You have to wait 24 months between applications.
Same here. Got it in Feb and less than 6 months in they announce the cuts. Sucks.
I called to voice my dissatisfaction. I think they’ll bring them back because too many people have downgraded/cancelled it in response to charging more in annual fee, and providing less benefits.
I doubt it. Citi has no loyalty to its customers, and there no reason to keep the Prestige card. I can’t wait to cancel mine.