It’s time to take that Citi Prestige Card you forgot about out of your sock drawer and put it back in your wallet. I’m sure there are quite a few of you who kept this card around for it’s Fourth Hotel Night Free benefit, as those who pay to stay at hotels can save thousands of dollars from it every year that easily make up for the $450 annual fee. That benefit is being devalued later in the year, at which point you may want to reconsider whether keeping the card longterm is worth it. In the meantime, it’s time to change your spending habits.
Today, January 4, 2019 (eeek…that’s the first time I’ve written the new year! hello) the Citi Prestige is changing its benefits package. At the moment, Citi is not accepting new applications for this credit card. I expect that will change soon, but I have no indication as to when. Here’s what’s new as of today.
Citi Prestige Benefit Changes as of January 4
- 5 ThankYou Points earned per dollar spent on all dining purchases
- 5 ThankYou Points earned per dollar spent on all air travel purchases
- 3 ThankYou Points earned per dollar spent on cruise line purchases
- The $250 travel credit is getting better in the sense that before, only charges with airlines counted. Now all travel related charges count. This benefit is based on cardmember year and not calendar year, so it’s possible to squeeze $500 of travel credit out of it before the second annual fee hits.
As a result, annual fees will increase to $495–up from $450–in September of 2019. That means your next cardmember anniversary after that point you will be charged $495. If your anniversary is between now and then, congrats, you get a good long period of boosted earning power for no extra fee.
All the changes above are more than welcome. While not a huge hit, there is one negative change as of today as well. Those with a checking account in The Citigold Account Package, a Citi Private Bank account, a Citi Priority Account Package, or those who are a Citi Global Client previously earned what Citi dubbed a “relationship bonus”. This amounted to a 15% points bonus based on total purchases in a cardmember year. Example: Spend $100,000 in a calendar year on your Prestige and you’ll get 15,000 bonus ThankYou Points at the end of that cardmember year. Cardholders will still earn that bonus at the conclusion of their next cardmember year, but not again moving forward.
How these New Category Bonuses Compare
5x on dining is unparalleled in the travel rewards world.
If you have a Prestige, I think there is little doubt that you should pull it out at restaurants from now on. Let’s take a look at the two other top options for return on dining spend: the Chase Sapphire Reserve and the Amex Gold.
I value Ultimate Rewards at 2 cents each, and Membership Rewards around 1.9 cents each. That means the Sapphire Reserve earns a 6% return on my dining purchases (3x).
The American Express Gold Card would earn a 7.6% return (4x) with the same 1.9 cent valuation. But do note that the Amex Gold only earns 4x at restaurants within the United States, not internationally like the Sapphire Reserve and Prestige do. So that 7.6% return for me personally is not accurate, as the majority of my dining purchases are international.
I value ThankYou points at 1.8 cents each, which means I’d get a return of 9% (5x) for dining purchases, internationally. 9% vs. the Sapphire Reserve’s 6% is no competition.
Note that the new elevated category bonuses won’t earn Prestige cardholders 5x on all travel purchases, just air travel. While the Prestige now kicks the Reserve’s behind for return on air travel as well (the same 9$ vs. 6%), for all other travel purchases, you’ll get a higher return–in my opinion–putting the spend on the Sapphire Reserve whose 3x category bonus applies widely to all travel related charges. The Prestige also offers 3x on hotels and cruises, but I value Ultimate Rewards a little more highly than ThankYou Points. If you value them more or less equally, then it’s an easy call for you to switch all dining and travel spend to the Prestige.
Travel Protection on the Reserve VS. the Prestige
As the Prestige is now king of return on air travel purchases, we should look at what kind of travel insurance you’ll receive putting tickets on it versus the Sapphire Reserve.
Travel credit cards, particularly expensive ones, tend to offer various forms of travel insurance. Back in 2017, I wrote a post comparing popular travel cards’ travel protection benefits. It’s time to update that post, and with the shift of spending we’ll see towards the Prestige for air travel, now’s an appopriate time to do so. The Prestige used to have the best travel protection benefits out of all the premium cards, but Citi has since devalued that aspect of the card. The Prestige and Reserve offer similar travel protection benefits now, but the Sapphire Reserve‘s are probably better. I’ll dive into this more once I have the chance to update the above linked post. If you have thoughts/opinions on this aspect of the Reserve vs. the Prestige, please leave a comment below.
More Changes to Come Later in the Year
- May 2019: Cell phone protection (reimbursement for damage or theft)
- September 2019: Fourth Night Free on paid hotel stay benefit limited to two uses per calendar year. This will be the biggest hit for the largest number of people.
- **Specifically: Any reservation made before September 2019 will still fall under the current, unrestricted Fourth Night Free benefit policy. So theoretically, you could make hotel reservations for as far out as possible in August of 2019 to pump the benefit for what’s it worth before the cap kicks in.**
- September 2019: Redeeming ThankYou points towards cash flights, their value will change from 1.25 cents to 1 cent a piece. I don’t recommend you do this with your ThankYou Points anyways, but this is still a devaluation for many.
- September 2019: Entertainment purchases will earn only 1 point per dollar spent instead of the prior 2.
Don’t forget Citi’s eligibility rule for credit cards within the same family.
You are only eligible to earn a sign up bonus if you haven’t opened or closed a card from the same type (brand or co-brand) within the last 24 months. So in the case of ThankYou Point earning cards, for example, if you opened a Citi ThankYou Premier Card seven months ago, for the next 17 months (a full 24 months after you opened it) you are not eligible for the same card, nor for the Citi Prestige Card. If you close that ThankYou Premier Card the 24 month clock will start over again and you won’t be eligible for that same card nor the Prestige for 24 months past the date you closed it.
So if you’re salivating over those category bonuses and want the chance to apply for a Prestige once they release the floodgates to new apps, then don’t get the ThankYou Premier in the meantime.
Thoughts on an Upcoming Bonus
It is my personal opinion that Citi will eventually introduce a new sign up bonus to entice applications. In the past, we’ve seen up to 75,000 ThankYou points offered for a a big spending requirement of $7,500 within three months. I wouldn’t be surprised if we see something similar again, as bigger bonuses with bigger spending requirements are trending at the moment.
The Prestige, after a spell of sitting quietly on the sidelines with no sign up bonus, has decided to play ball in the current game of category bonuses. It’s not surprising that banks are shifting towards competition over category bonuses instead of sign up bonuses, as category bonuses are crafted to benefit the long-term customer as opposed to the credit card churner. But as I said, I do think the Prestige will introduce a sign up bonus sooner rather than later, as they need a distraction from the big hit coming in September when the Fourth Hotel Night Free benefit gets drastically devalued.
As of today, Citi Prestige cardholders now earn an increased 5 ThankYou Points on dining purchases and air travel purchases and 3 ThankYou Points per dollar on cruise line purchases. The other category bonuses will remain the same for now: 3x on hotels, and 2x on entertainment. The air travel credit benefit is expanding its definition of travel credit to include general travel purchases, which makes it easier to take full advantage of. Other benefits like Priority Pass lounge access and Global Entry/TSA Precheck credit remain the same. Annual fees will jump to $495 for renewals in September 2019 and later.
I closed my Prestige a long time ago as I didn’t find it valuable enough to keep open (primarily because I don’t stay in hotels, especially not for four or more nights, so the fourth night free benefit isn’t worth much to me). But when Citi opens applications, depending on the sign up bonus situation, you can bet it will be at the top of my list.
Are you pulling the Prestige out of your sock drawer?
Read full details from Citi on the Prestige changes happening today and over the course of this year.