From the desk of the Devil’s Advocate…
For those of you who might be joining us from Frequent Miler and elsewhere for the first time today (and welcome to all of you!), a few months ago I wrote a three-part series on the downsides of the major flexible travel currencies…
- First I claimed that “AmEx Membership Rewards Points Are Totally Worthless“
- Then I reconsidered in “Wait, Maybe SPG Starpoints Are The Worst Points Ever“
- Finally I realized the error of my ways in “I Got It! It’s Chase Ultimate Rewards Points That Are Awful!“
The Conventional Wisdom about these “Big Three” programs is that they’re the most effective way to guard against unexpected devaluations, and using them is an excellent way to diversify your points portfolio. But people rarely talk about the negatives of these programs, so I happily took up the cause. Hey, that’s my job as the Devil’s Advocate.
However, during that series our friend Grant inquired about another program that is vying to also become a major flexible travel currency. Recently Citibank has put a ton of resources into upgrading their ThankYou Rewards program. Clearly they hope to become the “fifth Beatle” of bank points. (Or would they be the “fourth” Beatle since there are currently three programs? No, the fourth Beatle is obviously Ringo, and don’t let anyone tell you it’s George. It’s Ringo. Ringo.)
So today let’s talk about the newly improved Citi ThankYou Rewards and explore why, even with all the recent enhancements, they’re still just so freakin’ horrible.
You Want Domestic Airline Partners? We Don’t Got ‘Em!
The big news coming out of ThankYou land over the last few months is the addition of nine airline partners, all of which offer 1-to-1 transfers from ThankYou Rewards.
This is a first in the history of ThankYou Rewards unless you count transferring to Hilton HHonors, which you’ve been able to do for a few years now but which no one does since Hilton took a machete to their loyalty program a while back, effectively sending the message to customers not to even think about showing their face around HHonors again if they know what’s good for them.
So it’s terrific that we’ve got all these new partners… until we actually start searching them for a domestic airline. Maybe United is a partner? Or Delta? No? How about American? Come on, at least American Airlines has to be on this list. Citibank issues American’s branded card, for crying out loud!
Nope. No American Airlines. No U.S. airline partners at all.
“Hey, Devil’s Idiot!” sneer the Conventional Wisdomers. “If you had any idea what you were talking about, you’d know that you can use foreign partners like Singapore’s KrisFlyer and Air France’s Flying Blue to book United and Delta flights through their alliances. Duh!”
Sure, you can do that… but only if you find Saver level availability on the corresponding domestic airline, since that’s the only award inventory alliances partners are able to book. Which, as we all know, is not always particularly easy to come by. While we’d theoretically like to redeem only at the Saver level all the time, the fact is that’s not always possible (especially if you’re hoping to travel on a certain airline that rhymes with Melta).
In fact, if you’ve been following Devil’s Advocate for a while, you’ve read my post about the potential value of redeeming at non-Saver levels (see “Respect The Unloved Standard Award Redemption“). So having a domestic airline partner on your transfer roster is a major plus and the other three flexible currencies each have at least one.
How come you don’t, ThankYou Rewards?
Expiring Points? What Is This, 2009?
One of the nice features of the major flexible travel currencies is that each bank offers at least one no annual fee credit card that uses the same rewards currency. For instance, Chase has the Freedom card, American Express offers the Everyday card, and Starwood points are safe in your Starwood account whether you have an AmEx SPG card or not.
Even though these no-fee cards don’t allow you to transfer points to travel partners, they’re a good way to save your bank points if you don’t have any travel coming up in the immediate future and don’t want to continue holding a credit card with an expensive annual fee.
Citibank? They don’t have a no annual fee card that you can transfer your points to.
Oh, but what about the Citi ThankYou Preferred card? That’s a card that earns ThankYou points but doesn’t have an annual fee, right? Can’t we keep our points if we have that card?
Nope. Because Citibank has a rule that if you cancel your card, the ThankYou points that card “sponsored” (their term) will expire 30 days after you close the card. Gone. Kaput. You cannot transfer them to another ThankYou card. Use them or lose them. (You can get around this by downgrading instead, but then you have to forgo any new signup bonus).
I honestly thought expiring loyalty points were going the way of the dodo. Perhaps few airlines followed Delta’s lead with points that never expire, but when it comes to banks, Chase and American Express points don’t expire as long as you keep any sort of card open in their rewards system. Heck, I have an old AmEx Optima card that keeps my Membership Rewards from disappearing. American Express hasn’t even offered that card in 5 years and I can still use it to store points.
And What’s the Deal with the Goofy Tiered Sign-up Bonus?
As far as perks and bonus categories, the Citi ThankYou Premier is roughly analogous to the American Express Premier Rewards Gold in the Membership Rewards world, and probably the Chase Sapphire Preferred in Ultimate Rewards. Since the Sapphire Preferred has a standard 40,000 point signup bonus (plus 5,000 points for adding an authorized user) and the Premier Rewards Gold’s current bonus is a paltry 25,000 points, it would seem the ThankYou Premier’s bonus offer of 50,000 points is highly competitive with those other two offerings.
Except there’s one little quirk. No, actually, it’s a rather large quirk.
You don’t even get half of that signup bonus at first. The actual signup bonus — meaning the bonus for signing up — is only 20,000 points after $2,000 in spend in the first three months. Then if you wait a whole year, they’ll give you another 30,000 points for spending another $3,000 on the card.
That’s not a 50,000 point signup bonus. That’s a 20,000 point signup bonus with an automatic 30,000 point retention offer for sticking around a second year. Mind you, they’re not waiving the $125 annual fee for doing that second year spend. They’re just giving you more bonus points.
Citibank is certainly fair to argue they’re trying to prevent people from signing up for their card, keeping it only for the first annual fee free year, and then dumping it. That’s perfectly fine. What’s not fine is marketing it as a 50,000 point signup bonus. It’s not. Also, neither Chase nor American Express do this with their signup bonuses.
Sorry, Citibank, but if you want to play with the big boys, you better bring your A-game. Premium customers with excellent credit and lots of credit card spend are the same customers who are savvy enough to see through your marketing ploys. Offer a normal signup bonus, or at least an honest one.
The Devil’s Advocate Thinks ThankYou Rewards Have Improved, but There’s Still Much to Do.
Let’s take a moment to give Citibank props for the improvements they’ve made. The airline transfer partners, while limited, are certainly useful. I’d rather have 9 foreign partners than none.
The bonus categories on both the Premier card and the Prestige card are quite competitive. Depending on which card you choose, you get 2-3x on dining and/or 2-3x on travel (which includes travel agencies, a benefit matched only by the Sapphire Preferred).
If you have the Prestige card (at a not-insignificant cost of $450 per year), there’s quite a few other benefits as well. Personally I miss the Flight Points, which were the real power of that card. But the 1.6 cents per point you can get for redeeming ThankYou points directly on American and US Airways fares while holding the Prestige is a truly excellent value.
However, the fact remains that ThankYou points are still the also-rans of the flexible point universe. Chase and American Express have put a lot of time and resources into their offerings, and it’s going to take more than a partial effort to catch up with them.
So Citibank, kudos to you for trying. We do appreciate it. But keep trying. You’re not there yet.
Devil’s Advocate is a weekly series that deliberately argues a contrarian view on travel and loyalty programs. Sometimes the Devil’s Advocate truly believes in the counterargument. Other times he takes the opposing position just to see if the original argument holds water. But his main objective is to engage in friendly debate with the miles and points community to determine if today’s conventional wisdom is valid. You can suggest future topics by sending an email to firstname.lastname@example.org.
Recent Posts by the Devil’s Advocate:
- Are Avios Always The Best Option For Short Haul Flights?
- Should a Capital One Card Be In Your Wallet?
- Three Reasons To Avoid The Points and Miles Game
Find the entire collection of Devil’s Advocate posts here.