Over the past 12 months, Citi has made several major changes to their credit card portfolio. The surprising thing is the inconsistent nature of these changes. While some of them add significant value to the cards, others cut the legs off the cards in regards to their usefulness in any serious traveler’s wallet.
Looking at the timeline of the changes will possibly give you a case of whiplash. Here’s a summary of the changes announced by Citi:
- July 2018 – Citi Prestige travel coverages devalued, bringing them in line with other banks premium card offerings.
- August 2018 – Applications closed for Citi Prestige
- November 2018 – Major changes announced to the Citi Prestige card
- January 2019 – New applications for Citi Prestige re-start and the card now earns 5x ThankYou points on air travel and restaurants and 3x on hotels and cruise lines
- January 2019 – Citi Rewards+ card launched with no-annual-fee, round up points feature and 10% rebate on points redemptions (applicable to all your ThankYou accounts).
- May 2019 – Citi Prestige adds cell phone protection benefit
- September 1, 2019 – Citi Prestige 4th night free benefit drastically devalued, 25% bonus for air travel redemptions removed and earning on entertainment spending reduced to 1x. The annual fee also increased to $495.
- September 22, 2019 – All Citi cards (including ThankYou and American Airlines co-brand cards) are losing all of their travel, purchase and price protection coverages including Price Rewind and Event Ticket protection. Only the Citi Costco Anywhere Visa is keeping some of the extended warranty coverages.
With all of these changes, you have to scratch your head and wonder, “What are they thinking at Citi’s HQ?” Make up your mind already. By adding additional bonus categories, they increase a card’s value when using it for travel purchases. Before you’re able to get the card out of the drawer to start using it, Citi announces they’re removing all of the travel coverages, which are the same charges for which Citi just gave you an incentive on spending.
The Prestige fourth night free benefit is now a shadow of its former self. Instead of being a good deal, you now have to consider the price you find on the Citi ThankYou portal against a lower price you can find on your own. Only being able to use it twice in a year and having to prepay for reservations are two more negative developments.
There’s much speculation behind the seemingly haphazard decisions Citi is making with their credit cards. Some say that it’s the costly acquisition of the Costco card portfolio from American Express in 2016 that’s putting a squeeze on Citi and causing them to reduce benefits of the cards so drastically. If that was so, why did they increase the points earned by the card in early 2019? Obviously, they knew that would mean they’d be paying out more in rewards which is not something you want to go when strapped for cash.
If it was cost savings they wanted, while it could make sense to remove the insurance protections and coverages from some of the less expensive cards, removing them from the $495 Citi Prestige and the $450 American Airlines Executive card just seems fool-hearted. Is Citi cutting off their nose to spite their face? Possibly.
Because of these devaluations, I’m seriously evaluating which, if any, of my Citi cards I want to keep. I can see no reason to keep the Citi Prestige anymore when all it will be for me is a good card for dining expenses. I’m not going to pay for airfare or a cruise with a card that offers no trip cancellation or trip delay coverages. I’m also not going to make any large purchases on a card without any purchase protection or extended warranty coverage.
Unless having fewer people holding their credit cards is the result that Citi wanted? If so, their plan is going along perfectly.
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This post first appeared on Your Mileage May Vary
7 comments
Seems like the Citi credit card management team is schizophrenic. I’ve had the Citi Double Cash card for years; no annual fee and 2% back (1% + 1%) on all purchases. If you’re looking for a good cash-back card, the Double Cash fits the bill. For points, Chase rules the roost.
I’ve had the prestige card for several years, but dumped it a few months ago for all the reasons you cited. What a shame! It was once my favorite travel card.
Simple answer: people like points. Rather than nebulous warranties
“I can see no reason to keep the Citi Prestige anymore when all it will be for me is a good card for dining expenses. I’m not going to pay for airfare or a cruise with a card that offers no trip cancellation or trip delay coverages. I’m also not going to make any large purchases on a card without any purchase protection or extended warranty coverage.”
I absolutely agree with your points 100%! And that is why I am cancelling it as soon as my annual fee comes up! The CITI folks are morons for destroying the Prestige card. This was my favorite card that I used all the time, and I was on the verge of cancelling my Chase Reserve Card, but now instead, I am absolutely cancelling this nonsensical Prestige card and using my Chase Reserve card. The folks at Chase must be tickled pink with CITI’s idiot moves.
Citi folks are not morons for destroying the prestige card, they are morons for not doing it quick enough. Like Rupert says below, the Prestige card was one which is utilized by the travel points people who are unprofitable for the bank. Bank of America has its premium rewards program tied to deposits and investments a customer keeps with the bank, and Chase is able to run the CSR/CSP at a loss since they can port these customers to their other mortgage, loan and banking products. Amex is known for offering Amex personal loans to their card holders. Citi is least likely to make money on premium credit card customers compared to the above banks. Now they will focus their efforts on profitable card customers. As a shareholder and customer I am fine with that. I love the points and miles game but long term if more and more people become aware of it and get into it, of course banks and airlines are going to have to make changes.
I think Citibank is perfectly sane – they are focusing on profitable customers.
Travel blog writers or readers who pay their bill every month, use every last benefit to the max and collect multiple sign-up bonuses are not profitable.
Many people dont go on vacation more than twice a year (to use 4th free), never knew the card offered insurance, etc
As much as i miss the benefits, Citibank’s action make sense to me – they are trying to filter out the costly customers and keep the profitable ones… and they probably have the data to do it…
It’s not just their credit cards. The Citigold designation, for accounts with over $200,000 in assets (10 years ago it was $50,000) have been getting worse and worse service. Citi seems to have decided on a policy of benign neglect for the bottom half of the 5%, continuing to accept deposits and issue credit to them but stop providing costly services and costlier marketing to them.