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Citi is planning to increase rewards flexibility for the Citi Double Cash Card starting this fall, adding the ability for cardholders to convert earned cash back rewards to ThankYou points.
Doctor of Credit reported that cardholders received this message at the bottom of their most recent statement:
“Coming in Fall 2019 your Citi Double Cash Card will allow you to convert your cash rewards to ThankYou Points which can be redeemed for gift cards, travel, purchases at select retailers, and more. For more details, please review the terms and conditions of your Citi Double Cash Card and the terms and conditions at www.thankyou.com.”
The Citi Double Cash Card currently earns up to 2 percent cash back on every purchase — 1 percent when you swipe and another one percent when you pay for those purchases. It’s one of the best flat-rate rewards structures offered on a no annual fee card. Citi allowing Double Cash cardholders to convert rewards to ThankYou points adds even more versatility to one of their top credit cards.
A Citi representative confirmed the upcoming change but was unable to provide additional details. Unfortunately, cardholders won’t know the true value of this update until a few questions are answered in the coming months — primarily regarding the transfer rate. Expert valuations place ThankYou points at 1.7 cents each, meaning this update has the potential to be quite lucrative for cardholders if Citi allows transfers at 1:1 ratio.
Unfortunately, Bankrate’s industry analyst Ted Rossman thinks it’s more likely that we’ll see a lesser ratio, especially considering the card’s no annual fee.
“It would be great if it does [offer a 1:1 transfer ratio],” Rossman says, “because that would yield an astounding 3.4 cents per point on all spending, but I doubt it. That’s way above the market rate.”
According to Rossman, it’s more likely that we’ll see something closer to a 2:1 ratio, which isn’t anything to write home about when you compare it to points-driven rewards cards like the Citi Premier Card.
It would seem that Citi is trying to create a credit card that caters to both cash back lovers and those looking to earn travel rewards. The only other issuer that offers this type of hybrid is Chase, who gives cardholders the ability to convert rewards earned with their cash back cards to Ultimate Rewards points when used with an Ultimate Rewards credit card such as the Chase Sapphire Preferred Card or the Chase Sapphire Reserve.
Citi would be the first to allow cardholders to convert cash back to points without requiring you to hold a card in their official ThankYou points lineup. However, it’s important to note that just because you have the option to redeem for both cash back and points, it doesn’t mean you’ll get the same value from each option.
“Cash back and travel rewards are usually an either/or proposition — not both,” Rossman explains. “While you can redeem for cash back on premium and mid-tier travel cards such as Chase Sapphire Reserve, Capital One Venture Rewards Credit Card, Citi Premier and many others, these travel-oriented cards give the best value on travel. I suspect Citi will maintain this distinction.”
Unless Citi allows an outrageous transfer ratio, it’s likely that Double Cash cardholders will still get the value by redeeming for cash back. If Citi offers a 2:1 transfer ratio, that would mean you’re getting a 1.7 percent return per dollar spent when you redeem for travel with your ThankYou points. In that case, you’re still better off redeeming your rewards for cash back — even if that cash back is paying for a travel expense.
The bottom line
This change has the potential to be an excellent addition to the Citi Double Cash Card, especially following the news that many of the card’s benefits will be cut later this year. However, the true value of this update will mostly depend on the transfer ratio Citi offers cardholders. For most cardholders, it’s likely that the most advantageous redemption option will remain cash back.
Stay up-to-date with the industry’s top news and strategies for earning cash back. Check out Bankrate’s cash back catalog for everything you need to know to earn the most out of every swipe.
The information about the Chase Sapphire Reserve card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.