Citi Prestige card holders are in for a rough summer. On July 23, 2017 my once favorite credit card is losing some of the card’s best benefits. For starters, Citi is cutting ties with American Airlines. In July Citi is revoking Admiral’s Club access from the primary card holder. Additionally, Citi is reducing the redemption value of ThankYou Points for American Airlines flights from 1.6 cents per point to 1.33 cents per point. Further, Citi is cutting the free golf benefit and adjusting the lucrative 4th night free benefit.
Even with all of the negative changes the Citi Prestige card is still was one of the best credit cards on the market. Unfortunately for Citi a lot has changed in the last year. American Express drastically improved the Platinum Card and Chase introduced the Chase Sapphire Reserve. With the reduction in benefits and increased competition should you keep, cancel, or downgrade the Citi Prestige card in July?
Keeping the Citi Prestige Card
First, let’s assume the Citi Prestige card is your only “premium” credit card. There are definitely many reasons to keep the card:
- For starters, the card still offers a $250 automatic travel credit which reduces the effective annual fee to just $200.
- The card still offers the 4th Night Free benefit which is now calculated based on the average nightly rate rather than the “4th” night. In theory, one four night stay is enough to completely offset the annual fee or even profit from the card.
- Citi Prestige card holders receive 3X ThankYou points on nearly all travel categories (excluding gas), 2X ThankYou points on Dining and Entertainment purchases, and 1X ThankYou point on all other purchases. ThankYou points are fairly valuable and easily transferred to several airline and hotel loyalty programs. Personally, I transfer ThankYou points to Singapore Airlines to redeem for their incredible Suite Class product.
- The Citi Prestige card still comes with a complimentary Priority Pass membership.
- Card holders still receive the TSA PreCheck / Global Entry credit.
There are of course additional benefits, but the above benefits are the ones that mostly help justify the $450 annual fee.
Lastly, when I downgraded the card (more on that later) a Citi phone rep informed me that when canceling the card you must redeem your ThankYou points within 60 days. I’ve read that you can pool ThankYou points with other existing Citi ThankYou rewards cards, but in this case the phone rep said I couldn’t. If you have a large balance of Prestige ThankYou points it’s wise to keep the card simply to maintain your healthy balance of points.
Downgrading / Converting The Citi Prestige Card
As is common with most major banks, Citi allows Citi Prestige card holders to product change the Citi Prestige card to another Citi product. When I called, the phone rep mentioned that I could only downgrade the Prestige card to the Citi ThankYou Premier card. In a few months time I could then convert that card to others. I opted to convert my Citi Prestige card to the Citi ThankYou Premier card for the following reasons:
- I currently carry the Chase Sapphire Reserve and American Express Platinum cards. Each of these cards offer better daily points earning potential than the Citi Prestige. Chase offers 3X points on Dining. American Express offers 5X points on Airfare and Hotels. Paying another $450 for the Citi Prestige created a ton of redundancy in my points earning portfolio. Instead, by downgrading, I earn 3X ThankYou points on other travel (including gas) and STILL earn 2X points on Entertainment. By converting I effectively save myself $100 out of pocket each year.
- Note: If I could use the 4th night free benefit more often I wouldn’t have converted!
- By carrying the Chase Sapphire Reserve and American Express Platinum cards I already have Priority Pass membership, no foreign transaction fees, TSA PreCheck / Global Entry credits, and earn valuable transferable points currencies.
Lastly, in this case, I chose to convert my card (rather than closing) because I like Citi’s products and wanted to maintain my open line of credit. I’ve had the same account number since I first opened the Citi Executive AAdvantage card. Since then, I’ve changed to the Citi Prestige and now Citi ThankYou Premier cards. By converting I saved myself two credit activities (canceling and opening) which could negatively affect my credit score.
Canceling The Citi Prestige Card
I’d view canceling this card as an absolute last resort. To cancel this card outright you’re basically saying that you no longer benefit from this card or any other available Citi cards offered. Rather than canceling the card I’d consider simply downgrading to the Citi ThankYou Preferred ($0/annual fee) just to maintain your Citi line of credit. Obviously everyone’s situation is different, but I just don’t see any reason to cancel a card when you have the option of converting it to a no annual fee card. Keep in mind canceling a credit card and then opening another one will have an overall short-term negative impact on your credit score. However, neither of these activities will destroy your long-term credit score by any means.
Timing Is Everything!
If you’ve made a decision to cancel or convert the Citi Prestige card it’s important to do so before or very shortly after the $450 annual fee posts. Ideally, you want to inform Citi of your intentions prior to the annual fee posting to avoid a lot of future headache. If your annual fee has already posted you have 30 days from the posting date to convert or cancel to card to receive a refund. If you missed the 30 day window you might as well keep the card open for another year and set a calendar reminder to cancel next year. Hopefully in the next year Citi improves the card’s benefits and you won’t have to!
In my case, I converted the card after I had already paid off my statement with the annual fee, but within the 30 day window. I received a full refund of the annual fee (less my new $95 annual fee), but not until a full 55 days after converting! Trust me, it’s much easier to simply convert or cancel the card prior to your annual fee posting.
Final Thoughts
I decided to convert the Citi Prestige to the Citi ThankYou Premier card mostly because I’m hopeful for the future of the Citi Prestige card. I’d like to think within the next year or two Citi has plans to improve the card enough to make it competitive with the Chase Sapphire Reserve or American Express Platinum cards.
That being said, anyone who can take advantage of the 4th night free benefit at least a few times each year should absolutely keep or even open this card! Anyone out there who can use a personal credit card for reimbursed hotel stays (consultants) should have this card in their wallet and use it. Sure your Southwest Rapid Rewards points are valuable, but not nearly as valuable as $150 of cash back in your pocket each 4 night stay!
