Best Downgrade Options for the Citi Prestige

On July 23, 2017, Citi is removing some of their benefits. Read our post here for everything you need to know about the Citi Prestige and the changes.

A lot of cardholders are wondering what their options are — should they cancel or product change the Citi Prestige?

 Product change options for the Citi Prestige

Product change options for the Citi Prestige

Annual fee

A significant factor in determining which route to take is the annual fee. The annual fee is $450, but it comes with a $250 travel credit, making the effective annual fee $200.

In some cases, you can apply in-branch to receive a lower annual fee of $350, making the effective annual fee $100 after the travel credit.

The main question is if the lower $350 annual fee will be honored the second year, or if the fee will increase to $450.

We’re hesitant to keep the card with an effective $200 annual fee because there are alternative luxury cards like the Chase Sapphire Reserve and American Express Platinum that provide the same, if not better, value.

Before considering downgrade/product change options, we need to consider if this card is worth keeping.

Three perks that matter to me

4th night free

The best perk the Citi Prestige is known for is book 3 consecutive nights, get the 4th night free. In order to redeem this perk, you have to book through the Citi Prestige Concierge.

Effective July 23, 2017, Citi will rebate the average room rate across your stay of 4 or more nights, not including taxes.

Trip delay insurance

If your flight is delayed by 3 hours, you are eligible to receive up to $500 in dining and lodging. This works well if your home airport has a lot of delays or if you travel during the holidays.

The Citi Prestige trip delay insurance is best in class compared to the Chase Sapphire Reserve, which kicks in at 6 hours. The American Express Platinum card doesn’t have trip delay insurance.

Citi ThankYou Points

My final concern is that if I cancel or product change the card, I won’t be able to receive a sign-up bonus for a Citi card in the next 2 years.

Citi has a rule that you can qualify for a sign-up bonus every 2 years across all products. For example, if you were approved for the Citi Double Cash card in 2015, you would not receive a sign-up bonus for the Citi Prestige if you applied the same year. You would have to wait until 2017 to qualify for another Citi sign up bonus.

Since I signed up for the Citi Prestige in September 2016, that means I won’t be eligible for another ThankYou bonus until September 2018. If I cancel the card now, it resets the clock meaning I won’t be eligible for another bonus until September 2019.

Product change options

In terms of product changes, there are 3 cards I’m considering:

  1. Citi Double Cash
  2. Citi Dividend
  3. Citi Costco

Citi Double Cash

Pros:

  • 2% on all purchases — 1% when you make a purchase and another 1% when you pay the bill
  • Citi Price Rewind, but this benefit is included with every card

Cons:

  • Watered down travel perks (i.e., no lost baggage). The Chase Sapphire Reserve offers better travel perks.
  • No return protection?
  • If you have the Chase Freedom Unlimited and the Chase Sapphire Reserve, you can earn 1.5x with the Unlimited and redeem for 3x when you transfer points to the Reserve.
  • I usually have a new card I’m trying to meet minimum spend on…the 2% might not make sense for me vs. meeting minimum spend

Citi Dividend Card

Pros:

  • The Citi Dividend card is no longer publicly offered. You can only get the card via product change.
  • Each quarter has rotating 5x categories; up to $300 cash back
  • 5x earning is not capped at $1,500 per quarter; can spend up to $6,000 if there’s a good quarter (compared to the Chase Freedom and the Discover It that have a $1,500 cap)

Cons:

  • Categories for the rest of 2017 suck

Costco Card

Pros:

  • Already have Costco membership so “no annual fee”
  • Earn 4% on gas, 3% at restaurants+travel, 2% at Costco
  • Extends Costco warranty on purchases by 2 years

Cons:

  • “Locked in” to Costco
  • Gas isn’t relevant to me (no car) and there are better alternatives for restaurant+travel (CSR)
  • Earn 2% at Costco vs. 1.5% with the Freedom Unlimited (effectively 3% if you transfer points to the Chase Sapphire Reserve)
  • Costco already has an amazing warranty policy