More news is good news in the credit card market, and things are really starting to heat up. It appears there is a duel between American Express, Citi and Chase, all vying for the most business. We are seeing improved earning rates on bonus categories at a rapid pace, and it’s hard to keep up with all the activity. For this article, I want to explore more deeply the new Citi Prestige card and my take on its place in the market.
For starters, let’s review the key benefits taking place with the updates on the Prestige card starting in January 2019:
- 5x points on dining and air travel
- 3x points on cruise lines and hotels
- $250 airline credit
- Cell phone protection plan (starting in May 2019)
Unfortunately, this increase in value on the earning side accompanied by the generous travel credit is hampered by a few items as well, starting in September 2019:
- Annual fee increases from $450 to $495
- Fourth night free benefit only usable 2x per calendar year
- 2x points on entertainment will move to 1x
- 25% decrease in redeeming for air travel
Looking at all changes at first glance, I thought this card might be valuable in my credit card portfolio. But, I have changed my mind. I do not believe this card fits into my personal portfolio, and maybe it shouldn’t for you either. Here are my reasons as to why I don’t think the Citi Prestige is a replacement for my cards. Keep in mind I currently hold the Chase Sapphire Reserve card, the American Express Platinum Card, and American Express Gold Card.
1. Citi Thank You Points Not as Valuable as Ultimate Rewards or Membership Reward
Despite the common knowledge out there purporting TYP as valuable as UR or MR, I do not agree. All partners aside from Singapore, Virgin Atlantic and Flying Blue are niche, complex to use, and do not have generous award charts.
Turkish Airlines has a nice 45K business class award, but you must stop in Istanbul and the layover is often very long, killing precious time you could otherwise use at your destination.
Asia Miles is a solid partner, but I would always book through American or Alaska to get to Asia on Cathay Pacific metal.
Avianca has a decent award chart, but the mile sales make these points cheap to acquire. And, the booking engine is terrible, often not showing award availability that United sees. Imagining the frustration with this, I can’t recommend transferring miles over.
Etihad Guest has a good award chart to Europe, but you must fly Brussels Air or find award space on American Airlines flights. Good luck with that.
Bottom line, I don’t find the sweet spots here. I would rather take on more miles with Amex to book through Aeroplan for Europe, accrue Alaska miles for redemptions to Asia, or apply for a few more Citi AAdvantage cards to acquire American miles for trips to South America. I would even forgo extra TYP earnings for MR since the MR partners are that good.
2. Transfer Times Take Too Long
I don’t have direct experience with the program, but by spending time online and reading stories about Citi Thank You Point redemptions, it is common for transfer times to take more than 2 days, often up to days or weeks. This is not an option for Practical Points Practitioners. Availability needs to be open and points available immediately for use. Chase and American Express often have almost instantaneous transfer times, which certainly does add value because you can book the award you want!
3. Trip Delay Protection Is Not as Good as Chase
Some might disagree, but I view the trip delay protection as significantly weaker than Chase. The key being that delays causing missed connections will not allow you to take advantage of the benefit for an overnight or extended delay due to the missed connection. Reports are out on the internet that a 2-hour delay on the first flight causing a 12-hour delay will not trigger this benefit.
I personally must connect almost every time I fly somewhere domestically. And in the last two years, EVERY time I have had an overnight was due to a missed connection from a delayed first flight. Therefore, in my situation this trip delay protection offers zero value. I’ll stick with Chase if I want this benefit. If not, I’ll stick with American Express to accrue Membership Rewards.
4. No Primary Rental Car Coverage in the United States
I have a harder time giving up primary rental car insurance than any other benefit. A black swan event that could cause you to incur a huge dollar loss from an accident is not something I want to deal with. Chase will cover you in the U.S., while Citi won’t. I can forgo trip delay protection since you may be out a few hundred dollars. With rental car damage, it will be thousands. I’d rather protect myself fully here.
5. No Diversification If You Go All-In
This is a catch 22. It is now possible to accrue a ton of Thank You Points with these new categories. Dining is my biggest spend category, so I would benefit tremendously. But, is it worth forgoing increased Ultimate Rewards and Membership Rewards earnings? In my case, I would primarily accrue TYP and MR while forgoing UR. I don’t think TYP are valuable enough to do so. My best redemptions are with MR, and I’d rather focus my points over there since I have found my favorite sweet spots, points transfer instantly, and I can bundle my unbonused spend from the Blue Business Plus card to have a lot of fire power when redeeming.
If I went all in with TYP on dining, airfare and hotel spend, I have a feeling I’d be left with a pile of TYP, and the inability to redeem for the awards I want, in a cheap manner, without any inconveniences of fuel surcharges or long layovers. I want simplicity, and TYP does not offer that.
6. Annual Fee Increase
The annual fee increase is significant. The annual fee is going up, the travel credit casts a wider net, but is still lower value than what Chase offers. Outside of the increased earnings, there is no added value from perks or benefits. The Amex Platinum blows it out of the water. I can’t justify a net $245 fee for no added perks. I already have Priority Pass, and I don’t value price protection.
7. Fourth Night Free Benefit
I don’t stay in hotels for 4 nights. It’s rare when I do. Therefore, this benefit does not add value to me. But even if I did, it is now only usable 2 times per calendar year. For this to be worthwhile, you need to spend MORE money on the three nights prior to receive MORE credit on the fourth night. Spend more to save more, as it goes. This doesn’t make sense to me.
8. Limited Complimentary Points Earning Options
If you somehow do disagree with my last 7 points, then this point might sway you. American Express and Chase both have baseline, no annual fee cards that offer 2x and 1.5 respectively as a base earning rate, on ANY purchases. Citi does not offer this, meaning you don’t have a true way to maximize earnings and go all-in on the currency.
9. Citi Has a History of Devaluing Benefits
Even if all of these benefits make you want the Citi Prestige Card, you have to be skeptical of the long term value. Citi has notoriously downgraded benefits on this card over the years, making me apprehensive about choosing this card. I wouldn’t be surprised if the added earnings for airfare and dining are too good to last. Chase and American Express have figured this out, and they don’t devalue that often or nearly as much as Citi has.
To me, the Citi Prestige Card is not worth keeping in my wallet for any extended period. The American Express Gold Card will offer me 4x on most of my dining in the U.S., and the Chase Sapphire Reserve will cover me internationally.
On the travel side, the trip delay offers no value to me compared to what Chase offers. If I forgo insurance, American Express is still the winner.
The only way Citi will hook me on this card (only for a year!) is with a juicy sign-up bonus with a reasonable minimum spend. Last offer on the market was 75K TYP for $7.5K in spend. That’s a lot of spend for a bonus that isn’t even 100K. I would need a higher point offer, or a lower minimum spend to even consider applying.
Guys, what are you planning to do? Are you shifting your portfolio for the Citi Prestige?