Citi announces changes to Citi Premier Card rewards and accelerates timeline

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In April of this year, Citi announced its plan for an overhaul to the rewards and benefits offered by the Citi Premier℠ Card (currently one of the issuer’s most lucrative offerings for travel).

The new rewards structure, which originally was set to roll out on August 23, 2020, came into effect on June 2, 2020, and puts more focus on everyday spending categories like grocery stores and restaurants.

“As our cardmembers’ needs evolve, we want to ensure we’re evolving with them and offering products that best meet their spending habits and deliver exceptional value,” Lora Monfared, general manager of proprietary rewards products at Citi, said in a statement.

Rewards changes

The new changes limit the scope of the travel category and eliminate the entertainment bonus altogether while boosting grocery and restaurant rewards. Here’s an overview of the updated rewards structure:

  • 3X points at supermarkets and restaurants (including takeout)
  • 3X points on air travel, hotels and gas stations
  • 1X points on everything else

While all cardmembers now receive 3X points at supermarkets and restaurants, new cardmembers only retain the prior 3X points rewards on all other travel (such as public transportation, parking and tolls) and 2X points on entertainment purchases until August 23, 2020. Existing cardmembers (including those who applied before April 10, 2020) are able to retain these benefits until April 10, 2021 (0n that date, these categories will earn 1X points per dollar).

The card’s $95 annual fee and 60,000 bonus point offer after spending $4,000 in purchases within three months of account opening remain unchanged.

New hotel credit

In addition to the new rewards categories, Citi is adding a $100 annual credit towards a single hotel stay of $500 or more (before taxes and fees) booked through ThankYou.com. This benefit will be available to new and existing cardmembers starting August 23, 2020, and renews each calendar year.

Redemptions

While many of these changes do add value for everyday spenders, Citi is also removing one of the most valuable benefits of the Citi Premier.

Beginning April 10, 2021, cardmembers will no longer receive a 25 percent boost to their points value compared to gift cards when redeeming ThankYou points for airfare through the ThankYou Travel Center.

While this can decrease the overall value of points earned with the Citi Premier for cardmembers looking for travel rewards, the transfer partner options under Citi’s ThankYou Rewards Program still offer great value for travelers.

Is the Citi Premier still worth it?

“In general, I think Citi is trying to tilt this card more towards everyday value, which has been a hot trend in the industry,” says Ted Rossman, industry analyst at Bankrate. “They still have some travel perks, but by enhancing the rewards for food spending both in and out of the home, they’re appealing to more frequent spenders.”

If you’re looking for a solid, everyday rewards card with a points program that can help maximize your value, the Citi Premier is still a good option. Even with its $95 annual fee, if the majority of your spending is concentrated at supermarkets and restaurants and you travel or drive relatively frequently, you’ll easily make up the cost in value.

Overall, the shifted timeline for Citi’s updated benefits and rewards rollout makes considerably more sense as consumers have and already are already spending more on groceries and less on travel amid social distancing measures.

Other options to consider

According to Rossman, the changes to the Citi Premier reflect a broader trend of issuers moving towards everyday rewards and long-term earnings.

Another popular travel card, the American Express® Green Card, underwent a similar refresh last year, and may be a comparable option if you’re looking for a bit more rewards benefit on travel.

“It seems like the Citi Premier may be targeting a similar audience to the Amex Green Card, although with broader appeal given the grocery category,” Rossman says.

You can also consider saving with an everyday rewards card that doesn’t charge an annual fee.

Rossman recommends a no annual fee duo consisting of the Wells Fargo Propel American Express® card and Blue Cash Everyday® Card from American Express for similar rewards.

“Citi Premier is simpler, although with a $95 annual fee,” he says. However, you can easily offset that with the $100 annual credit combined with your spending rewards. “In summary, I’d say the Citi Premier changes are a modest improvement for most cardholders.”