The $95 annual fee recently posted on my Citi Premier Mastercard. We performed our usual review of the benefits of the card compared to the annual fee and made a retention call to Citi.
- We decided to keep the card and pay the $95 annual fee
- A single key benefit – the continuing ability to redeem ThankYou Points (TYPs) for 1.25 cents per TYP when booking through the Citi travel portal – made this card an absolute keeper for us
- We received a retention offer of 5,000 TYPs if we make $1,000 in purchases within 3 months
Background of Our Citi Premier Card
We applied and were approved for the Citi Premier card in early June 2018. We wrote about our approval in a Middle Age Miles pre-launch post:
- Middle Age Miles – Mini App-O-Rama Success – Approved for the Citi Thank You Premier Card! (June 5, 2018)
The annual fee was waived for our first year. This year was the first renewal of our Premier card and the first time we’d been asked to pay an annual fee to hold it. During the year that we’d held the card, we had put about $16,000 in spend on it. That said, almost all of the spend was in 2018, with only a few hundred within the past few months during 2019.
Basics of the Citi Premier Card
The Citi Premier Mastercard is a mid-tier card in Citi’s family of TYP-earning cards, with the Prestige being the premium card, with its hefty annual fee that has recently risen to $495. Basics of the Premier card and key benefits include:
- Annual fee: $95 (waived first year)
- Current sign-up bonus: 60,000 TYPs when you make $4,000 in purchases within 3 months of account opening
- Bonus categories:
- 3x TYPs on travel, including gas stations (3.75% return, at our baseline value of 1.25 cents per TYP)
- 2x TYPs on restaurants and entertainment (2.5%)
- Point redemption value:
- 1.25 cents per TYP when redeemed for airfare on any airline through the Citi Thank You Travel Center portal
- 1 cent per TYP gift card redemption
- Eligible for transfer to Citi’s airline transfer partner programs (all transfers are at a 1:1 ratio, and sometimes Citi runs promotions for higher-value transfers)
- Avianca LifeMiles
- Cathay Pacific Asia Miles
- Etihad Guest
- EVA Air
- Flying Blue (Air France & KLM)
- Jet Airways JetPrivilege (currently unavailable but still listed by Citi)
- JetBlue TrueBlue
- Malaysia Airlines Enrich
- Qantas Frequent Flyer
- Qatar Privilege Club
- Singapore Airlines KrisFlyer
- Thai Airways Royal Orchid Plus
- Turkish Airlines Miles & Smiles
- Virgin Atlantic Flying Club
- Note that TYPs may be combined among TYP-earning cards
- We give TYPs a baseline value of 1.25 cents, primarily based on their ability to be used at that rate through the ThankYou Travel Portal; the points can be worth significantly more if skillfully transferred & redeemed with Citi’s airline partners
- We believe that the Premier card allows redemptions at 1.25 cents per TYP on airfare, hotels and car rentals (all of these categories show up at 1.25 cents for us, but we can’t tell if any of this is solely attributable to holding the Prestige card, as opposed to the Premier; we can’t find the answer in Citi’s online materials)
- No foreign transaction fees
You can see more information about the Citi Premier card and its benefits at the dedicated Citi webpage here.
Another thing that’s worth noting is that the 3x and 2x bonus categories on the Premier card are very broad. Here’s how they’re defined in the official Citi Premier Card Terms and Conditions:
— 3 ThankYou Points for each $1 spent on purchases at airlines, hotels, car rental agencies, travel agencies/travel aggregators/tour operators, gas stations, commuter transportation, ferries, commuter railways, subways, taxis/limousines/car services, passenger railways, cruise lines, bridge and road tolls, parking lots/garages, campgrounds and trailer parks, timeshares, bus lines, motor home/recreational vehicle rentals and boat leases and rentals
— 2 ThankYou Points for each $1 spent on purchases at restaurants (including cafes, bars, lounges and fast food restaurants), and on select entertainment, including live entertainment, live theatrical productions, concerts, live sporting events, movie theaters, amusement parks (including zoos, aquariums, circuses and carnivals), tourist attractions including museums and art galleries), record stores, video rental stores and on-demand internet streaming media
Unfortunately, some important benefits relating to travel and shopping protection are being discontinued from the Premier (and most if not all other Citi-issued cards) as of September 22, 2019:
Despite the axing of these other benefits, the Premier card will continue to have Damage & Theft Purchase Protection (damaged or stolen within 90 days of purchase or delivery) and Extended Warranty coverage (extra 24 months).
Our Citi Credit Card “Stack”
We currently hold 4 Citi TYP-earning cards that are linked together into a single ThankYou account:
- AT&T Access More (ATTAM)
Remember that when you link your cards together into a single ThankYou account, the benefits of each card extend to all TYPs earned on any card in the linked account. Given this feature, the combination of the 4 cards has worked well:
- The Prestige has been good for earning TYPs, especially this year since the earning rate at restaurants increased to 5x. In addition, we’ve been able to earn at 3x at hotels when we used the Prestige card’s 4th night free benefit (which, unfortunately, has been severely gutted by Citi, to the point where it’s probably no longer useful to us for bookings made after the end of this month).
- You can read more about the Prestige card and its benefits, including the gutting of the 4NF benefit, in this article.
- The ATTAM card has also been great for earning TYPs, primarily due to its 3x bonus category for online retail and travel purchases.
- We’ve written extensively on this bonus category, most notably in this article.
- The no-fee Rewards+ card has a unique feature – a 10% rebate on all TYPs redeemed from the ThankYou account to which the card is linked, up to a cap of 10,000 points per year.
- You can read more about the rebate feature of the Rewards+ card in this article.
At the end of this month, however, things are changing a bit. Historically, the high-end Prestige card allowed holders to redeem TYPs through the ThankYou Travel Portal at 1.25 cents per TYP. However, that benefit is ending on the Prestige card as of 8/31/2019. From 9/1/2019 forward, Prestige holders will only be able to redeem through the Portal at 1 cent per TYP.
The Premier card, though, has not had a similar devaluation. The 1.25 cent redemption rate remains in place for the Premier card at this time. This means that from 9/1/2019 forward, you’ll have to hold a Premier card to redeem at 1.25 cents per TYP.
Our Personal Keep-or-Cancel Analysis
Based on our own booking and travel patterns, the way we usually redeem our TYPs is toward airfare using the Travel Portal. This is in large part because (a) most of our flying is on American, (b) air tickets purchased through the Travel Portal using TYPs earn elite qualifying miles and dollars, and (c) we need these EQMs and EQDs to re-qualify for Executive Platinum status on AA.
During the past year, we’ve redeemed well in excess of 100,000 TYPs for airfare purchased through the Citi Travel Portal at 1.25 cents per TYP. We can probably project that our earning and redemption of TYPs for the next year will be less than the past year, but it’s still likely to be 100,000 TYPs or more. Given our personal earnings-and-usage profile, the ability to redeem at 1.25 cents per TYP is extremely valuable to us. This benefit alone justifies the Premier card’s $95 annual fee for us.
To quantify this a bit more precisely, the difference between redeeming at 1.25 cents and 1 cent per TYP is 0.25 cents. We’d only have to redeem 38,000 TYPs at 1.25 cents rather than 1 cent, in order to get $95 worth of value from holding the Premier card. Again, given our expectation that we may redeem 100,000 TYPs or more through the Travel Portal at 1.25 cents per TYP within the next year (and we currently have a balance of more than 50,000 TYPs), this benefit makes keeping the Premier card a no-brainer for us.
Finally, given the value to us of keeping the Premier card, we didn’t seriously consider any product-change options.
More General Keep-or-Cancel Factors for Other People
Clearly, this analysis would be different, depending on different people’s travel and booking preferences. Given the huge devaluation of the Prestige card (which will cause many people to cancel), Citi’s cutting of most ancillary benefits on its cards, and the current inability to convert to the ATTAM card (which could be quite helpful in generating TYPs), we can certainly see where it may make sense for some (many?) people to forego Citi TYP-earning cards entirely and focus their efforts on Chase and/or Amex.
If you’re still in the Citi/TY game, though, remember that you’ll have to hold either a Prestige or Premier card in order to transfer your TYPs to Citi’s airline partners. And given the devaluations to the Prestige card, it may be very hard to justify its $495 annual fee (even though you can easily offset about half the annual fee with the $250/year travel credit). I’ve heard many people say that they plan to cancel their Prestige card the next time it renews. The Premier card and its $95 annual fee may look like a much better and cheaper option to preserve the ability to transfer TYPs to airline partners.
Turning now to the Premier card’s earning potential, we’d note that points-earning on the Premier is very good. That said, though, it’s not truly best-in-class for much at all.
Remember that on a point-for-point basis, we give Chase Ultimate Rewards (UR) points and Amex Membership Rewards (MR) points a higher baseline value than Citi TYPs – 1.5 cents for UR and MR points, compared to 1.25 cents for TYPs. (You may have different baseline values, depending on how you use the points.)
With those baseline values in mind:
- We can earn 5x MR (7.5%) for airfare using our Amex Platinum card, compared to 3x TYPs (3.75%) with the Premier
- Alternatively, if we want travel protection post-9/22/2019, we can use our Chase Sapphire Reserve to earn 3x UR (4.5%) plus have travel protection
- We can earn 3x UR (4.5%) for hotels using our Chase Sapphire Reserve (and more at certain chains like Hilton and Hyatt where co-branded cards earn at even higher rates)
- We can earn 3x UR (4.5%) for rental cars using our Chase Sapphire Reserve, plus receive primary collision damage coverage
- Chase’s 3x “travel” category on the Sapphire Reserve is almost as broad as the Premier’s 3x “travel” category, so we can earn 3x UR (4.5%) on most of the other types of travel expenses
- Our US Bank Altitude Reserve card also earns 3x points for travel expenses, redeemable at 1.5 cents per point (4.5%), although the Altitude Reserve’s definition of travel is narrower than the Premier’s
- With respect to the Premier’s 2x categories, the Amex Blue Business Plus earns 2x MR (3%) on everything (up to the $50k annual cap), which beats 2x TYPs (2.5%)
For the most part, this analysis leaves gas stations at 3x TYPs (3.75%) as the most notable potentially best-in-class bonus category on the Premier. Not many people will have enough spend at gas stations to justify a $95 annual fee, but this may indeed be a truly valuable bonus category for some people.
Turning the lens yet again, what if you don’t hold premium cards from Chase or Amex (and don’t want to, or if you can’t get approved for the Sapphire Reserve)? For those people, the Premier card is a great option, with its generous sign-up bonus, good points-earning and bonus categories, redemptions through the Travel Portal, and ability to pair with the no-fee Rewards+ card to get the points rebate on redemptions. For people who fall into that space, the Premier card seems like a solid keeper.
Finally, if you don’t want to pay the annual fee to keep the Premier card, you should definitely consider product change options. For the most part, Citi is liberal with allowing product changes, and it has some no-fee products that can be quite useful, like the Double Cash card (2% cash back on all purchases) and the Dividend card (rotating 5% quarterly bonus categories).
To summarize, the keep-or-cancel decision on the Premier card turns on a lot of individual factors. If you’re like us, where you can earn a fair number of TYPs and redeem them through the Travel Portal (or even airline transfers), then the Premier is probably a keeper. If you hold other premium cards such as the Sapphire Reserve, you may want to evaluate whether you want to be engaged in the Citi ThankYou world at all given the recent devaluations – and if not, cancel the Premier. If you don’t hold any premium cards, then getting and keeping a Premier may be a great option for you to generate travel rewards, and you can pair it with other Citi cards for additional TYP earning opportunities.
And if you don’t want to pay the annual fee to keep your Premier card, you should consider product-change options.
Did We Get a Retention Offer?
We already knew that we wanted to keep our Premier card, for the reasons we’ve discussed above, but we went ahead and made a retention call to Citi anyway. As usual, I told the agent that we recently received our statement where the annual fee posted, we’re trying to decide whether to keep the card or cancel it, and we were wondering if there was anything they could do to help make it worth it for us to pay the annual fee and keep the card.
The agent first asked me to confirm that I wanted to cancel the card because of the annual fee. I didn’t want to outright answer “yes” to this question, because I certainly didn’t want to be misunderstood, resulting in the agent canceling the card. I answered, “that’s what I’m considering.” At that point, the agent checked her system and said that our account did show that a retention offer would be available. At that point, she transferred me to a retention agent.
The retention agent first offered to let me redeem 7,500 TYPs for a $95 credit, to offset the annual fee. I politely told her that I wasn’t interested in doing that, and I wondered if there were any offers. She said yes, there was another offer – a bonus of 5,000 TYPs if I made $1,000 in purchases within the next 3 months.
I was happy to get this offer, and at this point I accepted it. In hindsight, before accepting, I should have said that it was an interesting offer and I’d consider it, but were there any other options. I’ve had situations in the past on my Citi ATTAM card where a subsequent offer was even better.
Still, I was pleased with the offer, and it was icing on the cake given that I wanted to keep the card anyway. The 5,000 TYPs are worth $62.50 at 1.25 cents per TYP, which almost offsets the annual fee in itself, and the spend requirement was minimal.
We’ll look forward to holding the Premier card for another year and hopefully getting some more very nice TYP redemptions using it!
What do you think about the Citi Premier card and our keep-or-cancel analysis? What other factors should people consider in their own keep-or-cancel decisions? Please share with us and other Middle Age Miles readers in the Comments!
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