Reimagined Citi Premier Card emphasizes everyday value

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The Citi Premier® Card has emerged from a substantial makeover with one of the more attractive blends of cash back and travel credit card rewards. The latest change has not been formally announced but it’s an important tweak: Cardholders are now able to redeem their ThankYou points for statement credits worth 1 cent apiece, up from 0.5 cents previously.

This is another example of how this card is trending in more of a cash back direction. It used to be positioned primarily as a travel card. And there’s still a lot to like for travelers: 3 points per dollar on air travel and at hotels and gas stations, plus a $100 discount off a single hotel stay of $500 or more (once per calendar year, excluding taxes and fees, and you must book through thankyou.com).

Cardholders can sometimes get more value when they transfer to Citi’s 16 airline partners. For instance, last year I got about 1.4 cents per point when I transferred ThankYou points to JetBlue. But not everyone likes to travel or is able to travel, especially as the COVID-19 pandemic drags on.

Other perks

I think the card is stronger now than it was a year ago. Besides travel, cardholders also get 3 points per dollar at supermarkets and restaurants. That elevated earning rate kicked in last August. One negative is that the card dropped its 25 percent bonus for booking travel through Citi. It also eliminated bonus points for entertainment purchases and certain travel categories (aside from air travel, hotels and gas). Non-bonus purchases earn 1 point per dollar.

The $95 annual fee can be offset by the annual hotel credit. If you’re thinking of signing up for this card, the 80,000-point welcome bonus is worth at least $800. To qualify, you need to spend $4,000 or more within three months of opening the account.

The primary competition

In raising the statement credit valuation, the Citi Premier Card is following pandemic-inspired moves such as Chase’s Pay Yourself Back program—particularly on the travel-oriented Chase Sapphire Reserve® and Chase Sapphire Preferred® Card —and a similar everyday rewards incentive on the Capital One Venture Rewards Credit Card and the Capital One VentureOne Rewards Credit Card.

Those initiatives allow cardholders to redeem their points or miles for everyday categories at a higher valuation that used to be reserved solely for travel. The Chase and Capital One promotions are slated to expire at the ends of September and June, respectively, although both have been extended previously. While I hesitate to say that anything is permanent in life or in credit cards, it appears that Citi’s tilt towards cash back is the most likely to stick. In 2017, the Citi Prestige® Card began offering 1 cent per point for statement credits (up from 0.5 cents), and it still does today.

The bottom line

While these changes can largely be attributed to the pandemic and the temporary migration away from travel and toward everyday purchases, I think card issuers would be smart to keep them around for the long haul.

Even in more normal times, cash back is valuable for its simplicity and its universal appeal. Travel points and miles are often more lucrative, but those programs are a lot more complicated. It’s not always easy to get the best value on the dates you want to travel or the places you want to go.

The Citi Premier has something for everyone. The ability to earn points on a variety of everyday and occasional categories is very beneficial. And if you want to use your rewards for something simple and universal like a statement credit, that’s now worth twice as much as it used to be. For those who love to travel and are willing to put in the work to find the best deals and transfer to airline partners, that’s another good option.

Have a question about credit cards? E-mail me at ted.rossman@bankrate.com and I’d be happy to help.

The information about the Citi Prestige® Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.