Citi Explains Why They’re Walking Away From Rich Rewards

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Over the summer Citi Prestige Card customers lost:

  • Access to American Airlines Admirals Clubs when flying American
  • Free golf
  • Points worth 1.6 cents apiece towards paid American Airlines flights
  • 1.33 cents apiece on other airlines (all air travel is now down to 1.25 cents)
  • Rebate of taxes for the fourth night free hotel benefit

They introduced new benefits in July and those were uninspiring at best.

  • Book 4th night free hotel reservations online (but in doing so, give up points-earning and elite status benefits for the say)
  • Metal card, but not as nice or heavy as others
  • Redeem points for cash at a penny apiece (lower value than air redemptions)

In other words it seemed like Citibank had given up. And in the face of Chase’s success with the Sapphire Reserve product and increased investment in the Platinum Card by American Express, it turns out they have at least according to the bank’s CFO.

[A] Citigroup executive said that after JPMorgan’s move Citi changed course and turned its marketing toward no-fee cards that offer free borrowing for as long 21 months instead of travel rewards.

“We shifted our focus away from rewards because of the competitive heat,” Citigroup Chief Financial Officer John Gerspach said in a conference call with reporters after posting quarterly results.

They appear to be focused far more on the admittedly fantastic Citi Double Cash Card than they are investing to keep up with Chase and American Express at the top of the rewards game.

Frequently these strategies seem to shift and they’re at least surveying more changes to the Prestige card so we could still see improvements yet.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. “Book 4th night free hotel reservations online (but in doing so, give up points-earning and elite status benefits for the say”

    If I use the citi portal to book Hyatt do I not receive elite benefits? What if I call in?

  2. @max – If you book online, you will not receive elite benefits or points earnings. If you call, you will.

    @Gary – At least they’re honest?!? As you say, these strategies shift a lot; I can’t imagine a huge credit card player like Citi will be far out of the “elite” space for long.

  3. The 4th night free benefit, which now combines with Starwood Luxury Privileges rates, is still a huge savings.

  4. What does this mean for cardholders of the Citi Prestige card? Or even the Citi ThankYou Premier card?

  5. @Michael But you have to book Starwood Luxury Privleges with agents that have access to these rates – does Aspire (citi)?

  6. What is up with this with Citi “Please note that the only rates which will qualify for the 4th Night benefit are the lowest rate for each room, whether flexible or non-cancellable. Any breakfast rates that are more expensive than the lowest available price will not qualify for the 4th Night benefit.”

  7. Annual fee just posted, and I’ll be canceling. I’ve only ever used the 4th night free once, so the card simply isn’t worth it anymore. I loved AA lounge access and would have kept the card had that benefit stayed intact. I have the Premier card to keep my TY points active, but I have a hard time figuring out a good use for them compared with other types of points. I ended up using over half to buy flights at 1.25 cents apiece — something I’d never even consider with UR, MR, or SPG. Where’s the value? Guess that’s why Citi is giving up.

  8. The Citi Prestige trip delay benefit has been of huge value to me, covering $500 for hotel and dining during IROPS last winter.

  9. @Michael and others – I just spent a half hour on the phone with Aspire – they can’t quote me memberships in any particular program like SPG Luxury Privileges. However when I attempted a dummy booking with the St. Regis Osaka, they are able to offer the full LP amenity package. What they could NOT offer for this hotel was the included 4th night free offered by the hotel (google luxury privileges amenities) – this otherwise could present an incredible opportunity to double down on the discount similar to Z3H codes and get the free breakfast and other upgrades. I have feeling that because they don’t offer the SPG offered 4th night free, that they belong to their program.

    Their system was glitchy so I didn’t investigate further. The concierge could not send me a list of “luxury collection” hotels – it is not publically available. Their computer system puts a “star” next to hotels in a location search to indicate the presence of a hotels with benefits. For all that we know, this might be identical to what World Mastercard Luxury Collection (google it) offers. Still, its useful to know that you might get extra benefits paying the flexible rack rate and still get the Prestige offered 4th night free.

  10. I had booked a floght to NZ with my prestige for vacation for 500 USD plus 44k ThankYou points. My grandmother died so I was unable to go. I filed a claim with trip interruption and they said “A payment in the amount of 300.00 , which represents the full amount payable for this claim,…” — I couldn’t believe it as the benefit guide states the whole trip would be covered.

  11. Cancelled mine in July, right after the lounge benefit was removed. The 4th night free benefit had gotten inconsistent (I would have to call and remind them to credit). New portal that doesn’t include elite credit. TY points have good values only in fringe cases.

    Subpar product. Hopefully it changes someday.

  12. The most valuable perks of this card are two years added to the manufacturer’s warranty and price matching. Ignoring all the travel benefits just these make the card worthwhile. Between them I’ve saved over $2,000 this year alone.

    Yet bloggers rarely even mention these benefits.

  13. Jeff, if you cancel your card you lose your TY points. Just keeping another card active won’t do it. You have to downgrade the Premier to a no fee card.

    Unlike Chase TY points are tied to the specific credit card account that generated them (and TY points earned in other ways such as by opening or having a bank account are further segregated and have their own different rules). So if you close an account those points are lost once the window to redeem them passes.

  14. @max – I had that situation on a prior trip, but was able to work it out (breakfast was free; no additional charge). Citi concierge had to contact the hotel and walk through it all. It took a couple more calls, but I finally got it done.
    One other “warning” that should be posted in connection with this article is that those who plan to walk away from Prestige are limited in how long they have to use the points – isn’t it 3 months?
    It is my understanding that there is no way to “save” the points with another TY points card (unlike Chase and AMEX).

  15. @Craig, @Steve, @Jeff… Now we know why they are called “Thank You” points.

    Citi is crazy if they think they will be better off alienating American Airlines and their customers by removing Admirals Club access. They need to think about ways to partner with them however possible. This gives them front row access to the best customers available. It is the reason Chase cards are in my wallet, while Citi, Barclays, Discover are at home. Amex has some wallet space also, because they are usually/always pleasant to work with, although the merchants take a beating on their fees.

    With the days of manufactured spending quickly fading away, it is time for Citi to update their marketing and spreadsheet models and figure out how to leverage their position with travel partners and retail merchants and anybody else that wants to figure out how to help a shared customer base rationalize using a premium card without it turning into a financial disaster for any of the participants.

    Considering how much they spent to acquire the Costco account, they don’t need to focus on destroying a card with a loyal customer base.

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