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Citi suspends USA Prestige card applications August 2018

Citi suspends USA Prestige card applications August 2018

Old Aug 3, 18, 9:02 pm
  #16  
 
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Originally Posted by CarefulBuilder14 View Post
It seems like they have to do something about point value if they want to make money. They need some point use that is cheap for Citi to provide but gives many customers a good value with convenience.

Sure, some FTers can use TY's exotic transfer partners...but they are probably the same people who book a lot of 4th nights free.

For normal people...profitable people...people who have one main card and don't make a lot of benefit claims or seek retention...TYs can be a hassle.

3 x 1.25 cpp will struggle to challenge 3x Hyatt/United/BA/etc...even though the latter can cost an issuer less.
I agree with you complete CarefulBuilder 14. That is why I strongly disagree with mikesyr18 that they are going to offer travel, dining, gas or a combination as their higher earn category because there is pretty much almost no scenario where a normal person would consider the Prestige over the Chase Sapphire Reserve when that card offers 1.5 cpp or Hyatt/United/BA/Southwest transfers. As such, Citi would have to offer a higher earn rate such as 5X points per dollar on one or more of those categories or increase the redemption rate to 1.5 cpp and even then it would be hard to convince users to use the card since Ultimate Rewards offers far more flexibility. In addition, if Citi plans to keep the 4th night free and cap it which from their survey it would appear they consider to be important to the card, then the $50 less in travel credits compared to Chase Sapphire Reserve plus 4th night free is not sufficient to fund the higher earning rates on the card since we already know that Chase has not made a profit on the Sapphire Reserve. As such, I think the only way Citi comes out ahead and is able to lower their costs is to differentiate the card from the Altitude Reserve, Sapphire Reserve, and Amex Platinum on the market. That is why I am strongly convinced dining will be the 5X points earning category and they will offer roundup. However, I think they may add restrictions to the roundup such as limiting it to 1 roundup per merchant per day, reducing the roundup from 50 points per their survey to only 10 or 25 points, and perhaps having a minimum purchase threshold for roundup to count such as $5 or $10 which will likely only impact those who make 0.51 cent amazon purchases but not regular users of the card.

Alternatively to roundup Citibank could offer a points rebate of 25% or less which they also mentioned in their survey. However, this in my opinion is too costly unless it only applies to points earned from the Citi Prestige card since then all points earned whether from Thankyou Preferred, ATT Access More, Thankyou Premier, or from the banking side would now be rebated which will increase Citibank's liabilities and expenses across multiple products. This is why I am inclined to think roundup is the better alternative at encouraging spend on the card for all purchases without increasing expenses as much as long as they add the appropriate restrictions like those mentioned above.

I also don't think they are going to move the needle from 1.25 cpp to 1.5 cpp since that would increase their current liabilities significantly since all existing points would now be worth 20% more just by holding the Prestige which is another problem Chase is facing with the Sapphire Reserve and their myriad of cards that have higher points earnings.

I don't think there is an easy answer for Citi, but if they want to continue offering the 4th night free (capped or uncapped) then the earnings portion of the card will have to be weaker or offer redemptions of points that are cheaper for Citi to offer like you mentioned. They could also get rid of the Priority Pass benefit or cap it similar to the USBank Altitude Reserve to provide more funding for rewards although I am not sure whether that would make the card more difficult to market since most if not all of the competition offer a Priority Pass membership.
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Old Aug 4, 18, 12:14 am
  #17  
 
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Yeah, as long as they keep the 4th night free benefit, I'm fine with keeping the card, though given how some people have been using it to save thousands of dollars on luxury properties, I suspect this benefit is going to get axed.

Beyond that, I'd love to see some form of hotel chain status, though given Citi's lack of hotel partnerships, I doubt that'll happen.
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Old Aug 4, 18, 7:54 am
  #18  
 
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Originally Posted by Joe1690 View Post
...That is why I strongly disagree with mikesyr18 that they are going to offer travel, dining, gas or a combination as their higher earn category because there is pretty much almost no scenario where a normal person would consider the Prestige over the Chase Sapphire Reserve when that card offers 1.5 cpp or Hyatt/United/BA/Southwest transfers. As such, Citi would have to offer a higher earn rate such as 5X points per dollar on one or more of those categories or increase the redemption rate to 1.5 cpp and even then it would be hard to convince users to use the card since Ultimate Rewards offers far more flexibility. In addition, if Citi plans to keep the 4th night free and cap it which from their survey it would appear they consider to be important to the card, then the $50 less in travel credits compared to Chase Sapphire Reserve plus 4th night free is not sufficient to fund the higher earning rates on the card since we already know that Chase has not made a profit on the Sapphire Reserve. As such, I think the only way Citi comes out ahead and is able to lower their costs is to differentiate the card from the Altitude Reserve, Sapphire Reserve, and Amex Platinum on the market. That is why I am strongly convinced dining will be the 5X points earning category and they will offer roundup. However, I think they may add restrictions to the roundup such as limiting it to 1 roundup per merchant per day....

I also don't think they are going to move the needle from 1.25 cpp to 1.5 cpp since that would increase their current liabilities significantly since all existing points would now be worth 20% more just by holding the Prestige which is another problem Chase is facing with the Sapphire Reserve and their myriad of cards that have higher points earnings.
...
Thanks for the support.

I don't agree with your point. What would be the point of applying for the Prestige over the Premier then? To simply use the capped 4th night free and use it for dining? People who know what they're doing don't want to earn "1x" or 1%" back on all of their purchases, except dining if they can multiply every purchase on another card somehow.

So Citi is going to scrap 2x on entertainment, scrap 3x on flights, and scrap 3x on hotels even though it's supposed to be a travel card?

Just cap the free hotel perk to one time a year, offer 5x on flights, 5x on hotels, 3x on dining, and 1x on everything else... Make each point worth 1.5 cents each when redeemed for flights, and 1 cpp on things like Amazon redemptions, cash back, and gift cards. The other scenario could be to offer a percentage back when you redeem your "points" through Cit's portal... Like with AMEX's Business Plat, or Barclay's Arrival Plus card.
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Old Aug 4, 18, 10:13 am
  #19  
 
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I think if they can figure out a way to offer the 4NF but target it toward leisure travelers rather than road warrior consultants, it would be sustainable.

Maybe impose a weekend requirement or something, or cap it to some times a year.

It's a key benefit of the card, but we only use it a few times a year, when we're on holiday.

If it flushes out some cardholders getting 10k a year out of this benefit, I would not be overly sympathetic.
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Old Aug 4, 18, 10:55 am
  #20  
 
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Originally Posted by mikesyr18 View Post
Thanks for the support.

I don't agree with your point. What would be the point of applying for the Prestige over the Premier then? To simply use the capped 4th night free and use it for dining? People who know what they're doing don't want to earn "1x" or 1%" back on all of their purchases, except dining if they can multiply every purchase on another card somehow.

So Citi is going to scrap 2x on entertainment, scrap 3x on flights, and scrap 3x on hotels even though it's supposed to be a travel card?

Just cap the free hotel perk to one time a year, offer 5x on flights, 5x on hotels, 3x on dining, and 1x on everything else... Make each point worth 1.5 cents each when redeemed for flights, and 1 cpp on things like Amazon redemptions, cash back, and gift cards. The other scenario could be to offer a percentage back when you redeem your "points" through Cit's portal... Like with AMEX's Business Plat, or Barclay's Arrival Plus card.
Holy cow, with a card like that I'd move EVERY part of my finances to Citi!
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Old Aug 4, 18, 11:31 am
  #21  
 
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Originally Posted by moe8555 View Post
Holy cow, with a card like that I'd move EVERY part of my finances to Citi!
It wouldn't be as great as you think for everyday spending.
  • You'd now be capped at using your 4th night free once a year.
  • 3 free rounds of golf used to be a benefit but no longer exists.
  • Admiral's Club access no longer exists.
  • 1.6 cpp to AA no longer exists.
  • Entertainment multiplier would no longer exist.

If you compare this card to the AMEX Business Platinum, it would have similar characteristics:
  • 5x on air and hotels, 1.5x/1x on all other purchases.
  • Points worth 1.5 cents each or more depending on airline/hotel transfer.
  • 35% of your points back when redeemed for flights.
  • AMEX Hotel program (with hotel credits, massages, and the likes)
  • $200 Incidental Fee Credit
  • Global Entry/TSA
  • Delta SkyClub access
  • Centurion Lounge Access

There's no way my proposed Prestige would cost more than the Business Plat.
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Old Aug 4, 18, 11:36 am
  #22  
 
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That would be 7.5% "flight cash back" on hotels and airfare...4.5% on dining.

Expensive, even with Citi earning a commission on the airfare.

Chase offers the 1.5 cpp "direct travel redemption" feature on CSR...but I think a lot of those URs are transferred to partners, lowering Chase's average cost of providing URs. I've heard (just rumors) Chase is thinking of nerfing the 1.5 cpp part as it costs them too much.

With less appetizing transfer partners, Citi's "redemption mix" might have a lot of 1.5 cpp direct travel redemptions unless they get some more popular partners. That would mean a very high cost of providing rewards.
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Old Aug 4, 18, 12:59 pm
  #23  
 
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I mean one way or another, Citi is going to have to spend money and stop being thrifty, or else they won't have a premium product to give out.

If their portal costs them too much money, Citi should go out and get transfer partners that are actually attractive to people who live in the U.S.
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Old Aug 4, 18, 1:02 pm
  #24  
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Originally Posted by mikesyr18 View Post
It wouldn't be as great as you think for everyday spending.
  • You'd now be capped at using your 4th night free once a year.
  • 3 free rounds of golf used to be a benefit but no longer exists.
  • Admiral's Club access no longer exists.
  • 1.6 cpp to AA no longer exists.
  • Entertainment multiplier would no longer exist.
If you compare this card to the AMEX Business Platinum, it would have similar characteristics:
  • 5x on air and hotels, 1.5x/1x on all other purchases.
  • Points worth 1.5 cents each or more depending on airline/hotel transfer.
  • 35% of your points back when redeemed for flights.
  • AMEX Hotel program (with hotel credits, massages, and the likes)
  • $200 Incidental Fee Credit
  • Global Entry/TSA
  • Delta SkyClub access
  • Centurion Lounge Access
There's no way my proposed Prestige would cost more than the Business Plat.
I use my Prestige only for Hotel and Airfare, and spend about $40k/year on the card.

If they got rid of the 4th night free I would cancel the card and get the AMEX BIZ PLT.

4th night free is the only reason I keep this card, as it saved me almost $2k in hotel costs in 2017.

The only program I transfer points to (1-2x year) is Singapore, which is a partner of Chase and AMEX, as well.
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Old Aug 4, 18, 1:43 pm
  #25  
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Originally Posted by CarefulBuilder14 View Post
I think "roundup" would lead to frequent Amazon $0.51 reloads......
Unless the feature only applied to card present transactions, which would exclude all online and telephone purchases.
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Old Aug 4, 18, 1:54 pm
  #26  
 
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Originally Posted by Renard View Post
I sure hope they donít cap the 4th night free credit. After the downgrade of the travel insurance Iíve moved all my airfare spend to the CSR so 4th night free hotel nights are about the only thing Iím still putting on it.
That sounds like exactly the type of spending pattern that would move them to cap it.
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Old Aug 4, 18, 2:03 pm
  #27  
 
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Originally Posted by CarefulBuilder14 View Post
That would be 7.5% "flight cash back" on hotels and airfare...4.5% on dining.

Expensive, even with Citi earning a commission on the airfare.

Chase offers the 1.5 cpp "direct travel redemption" feature on CSR...but I think a lot of those URs are transferred to partners, lowering Chase's average cost of providing URs. I've heard (just rumors) Chase is thinking of nerfing the 1.5 cpp part as it costs them too much.

With less appetizing transfer partners, Citi's "redemption mix" might have a lot of 1.5 cpp direct travel redemptions unless they get some more popular partners. That would mean a very high cost of providing rewards.
Chase getting rid of the 1.5cpp would be a HUGE blow. Have you heard they plan to devalue like Citi or something along those lines? Reminds me - I am sitting on way too many chase points right now!
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Old Aug 4, 18, 2:17 pm
  #28  
 
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Originally Posted by milypan View Post
That sounds like exactly the type of spending pattern that would move them to cap it.
To be fair, Citi did it to themselves. The card only became useful for delayed travel reimbursement and the 4th night free when they nerfed everything else a year ago.
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Old Aug 4, 18, 6:17 pm
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Originally Posted by mikesyr18 View Post
To be fair, Citi did it to themselves. The card only became useful for delayed travel reimbursement and the 4th night free when they nerfed everything else a year ago.
Exactly - we keep the card and use it extensively, but only for 4th night benefits.

I still think adding AA as a transfer partner would be a big winner, it would cost them Iím sure but it is the cost of doing business. If TY points transferred to AA I would put a lot more on this card.
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Old Aug 4, 18, 7:31 pm
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Sounds to me like citi is going to axe the 4th night free benefit.
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