[Updated/Debunked] Rumor: Citi Prestige Card To Be Discontinued

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Update: Doctor Of Credit has received a statement from Citi that they “remain committed to the Prestige product and servicing our valued existing cardmembers. We look forward to reintroducing the card for new cardmembers in the near future.”

I am leaving the post up for context, but have edited the title accordingly.


Let me start by saying that I have no inside knowledge here, so until it’s officially confirmed by Citi, I consider this to be a rumor.

That being said, Doctor Of Credit (who usually gets this stuff right) shares that a “reliable source” tells him that the Citi Prestige will be discontinued this fall, and that this information was shared with bankers today.

This isn’t the first time there has been such a rumor, and while some have suggested that August 18 is the day it’s being discontinued, there’s no further information on that front.

What are the benefits of the Citi Prestige Card?

On the most basic level, the $450 annual fee Citi Prestige Card offers:

  • Triple points on airfare and hotels, and double points on dining and entertainment
  • A $250 annual airline credit, which can be applied towards any airline ticket booked directly with an airline
  • A Priority Pass membership with the ability to take two guests with you
  • A fourth night free hotel benefit that you can use as often as you’d like

There are some other perks, but those are what I view as being most important. When you factor in the $250 airline credit (which I think is roughly worth face value), that means this is essentially a card that costs you $200 per year, which is incredible if you use the fourth night free benefit.

Why can’t Citi make the Prestige Card work?

We’ve seen so much competition in the premium card market, in particular with the Chase Sapphire Reserve® Card and The Platinum Card® from American Express. The way I view these cards:

  • Chase is worried they’ll never make money with the Sapphire Reserve, though they’re noticing a big increase in customers as a result of the card, and hope that those people engage with Chase in other ways
  • The Amex Platinum Card isn’t actually that rewarding for spend (other than offering 5x points for airfare purchased directly with airlines), so presumably Amex’s margins are better when it comes to making money on cardmembers for spend, since they aren’t offering huge rewards for spend

Citi is in a tough position, and I suspect this comes down to a few things:

  • Citi spent a ton of money on their Costco deal, and I suspect that has caused them to lower budgets in other areas
  • Probably related to that, American and Citi weren’t able to come to a full deal when they renegotiated their contract, so Admirals Club access was eliminated as a perk of the card last year
  • At this point the real selling point of the card is the fourth night free hotel benefit, and I suspect the issue is that Citi is losing huge money on this, since many of us save thousands of dollars per year with this perk
  • For those not using the fourth night free benefit, the Citi ThankYou® Premier Card is an all around better option, as it has better bonus categories and a much lower annual fee

So I don’t think it’s that Citi couldn’t make the card work, but rather I imagine they may have lower budgets due to the Costco deal, and also the one benefit that truly sets the card apart is probably costing them a lot of money.

Should you apply for the Citi Prestige Card now?

You can still apply for the Citi Prestige Card. It doesn’t have a welcome bonus, so you’d be paying the $450 annual fee and would be getting it because you value the benefits. If you think you’d get value out of the fourth night free benefit then it could make sense.

However, keep in mind that the Citi ThankYou® Premier Card currently has a welcome bonus of up to 60,000 ThankYou points, and that bonus isn’t available to those who have opened or closed a Citi Prestige or Citi Premier Card in the past 24 months.

In other words, if you open a Citi Prestige Card now you wouldn’t be eligible for the Citi Premier. So that means the opportunity cost of getting the Citi Prestige is at least 60,000 ThankYou points.

The further thing to consider is the difference in annual fees. One card has a $450 annual fee, while the other has a $95 annual fee waived the first year. Even when factoring in the $250 airline credit, that’s a difference of $200 in the first year.

So the opportunity cost of applying for this card is at least 60,000 ThankYou points plus about $200.

What happens to existing cardmembers?

Generally speaking card issuers provide notice of any major changes to a card, so I think it’s unlikely the card would be discontinued for existing cardmembers immediately.

Hopefully they’ll continue to honor the current benefits, though I suspect more likely than not they may eventually try to convert this into another card. This could be one year down the road, it could be a few years down the road, or it could never happen. We don’t know.

But I would expect that for at least some amount of time it will be business as usual.

Bottom line

While nothing has been officially announced, there are several reliable rumors that the Citi Prestige may soon be discontinued. I have no inside knowledge there, and we’ll have to wait and see how this unfolds.

We don’t know what this means for existing cardmembers, though if this happens I imagine the card will continue to be honored for at least some amount of time. Meanwhile if you don’t yet have the card, it could make sense to apply. Just make sure you fully understand the opportunity cost of doing so.

What do you make of this Citi Prestige Card rumor?

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Comments

  1. So sounds like amex has been disciplined, chase has been adventurous and overly risky hoping things might work out and citi doesn’t know what they are doing.

    So if you were young woman you would screw chase for a number of years since it excites you, marry amex since it’s slow and steady and boring but a good provider for a number of years and keep Citi around enough to get them run errands for you without actually giving them anything in return. They are your forever plan B if something didn’t work out.

    Stick with amex.

  2. It’s not $450 for everyone. I’m with Citi Private Bank and they only charge me $350. After the airline rebate it effectively only costs me $100/year. And I make that up the first time I use the 4th night free each year.

  3. If you got the Premiere over two years ago and then product change to the Preferred are you eligible to earn the 60k on a new Premiere card now?

  4. OMG. 4th night free is the greatest benefit ever. As such, I fully expected that it would not last forever an if the rumor is true, the news would not shock me. But I love it so much, I hope they give us lots of runway.

  5. By the way, as a data point, I booked two Azerbaijan flights, one through Expedia and the other through Priceline, for some reason the statement coded them as if I directly booked the tickets from the airline instead of from OTA. I confirmed I got 5x points.

  6. I just downgraded mine to the Dividend Card but my wife is keeping hers mainly for the 4th night free. It’s clearly the benefit that has to be costing Citi the most so it wouldn’t be surprising to see them shuttle it. If they’d have been able to keep the 1.6 cent redemption with TYP on AA flights they’d probably be in better shape. You get a $300 TC and Hyatt/Southwest as transfer partners from Chase and a slew of travel benefits from the AMEX Plat. The 4th night benefit is the only ace in the hole Citi has left here.

  7. @Mark, yes you can. I did that a few months ago when the offer was 50K. I’d wait a bit after the conversion before applying.

  8. Why don’t they just cap the 4th night free. I could hardly believe it when they cut golf and a bunch of random stuff and kept this benefit unlimited other than not including the taxes in the reimbursement. Cap it at a maximum of $500 or $1000 and I think few people would cancel but they would avoid paying out huge amounts to people like Ben and consultants that stay 4 nights a week every week.

    Remember that they’re getting a travel agent fee on the full stay plus the swipe fee which substantially reduces the actual cost of the 4th night free.

  9. Statement from Citi:

    Our go-to-market strategy continuously evolves to feature different products and offers. We remain committed to the Prestige product and servicing our valued existing cardmembers. We look forward to reintroducing the card for new cardmembers in the near future.

  10. DoC says Citi is now denying that they will cancel the prestige card. Not sure if you can currently apply for it so it may be temporarily pulled but it sounds like they intend to revamp the card. I wonder if they will do something to that fourth night free policy because right now a large number of people who have the prestige probably have it for that reason which can’t be profitable to Citi if the bulk of their customers are using that feature.

  11. Say it ain’t so! I’ve come to love my Citi Prestige Card, mainly for the 4th night free. I’m Citigold so the card only costs me $350/year (plus $50 for my partner to be a supplementary cardholder) and of course netting out the $250 airline credit makes the annual fee negligible. We travel well (mix of economy and business class) about four times a year staying in hotels priced at $500-$1,000/night, so the 4th night free benefit adds up to at least a $2,000 benefit for us annually. On top of that, the 3x hotel and airline points have added up. I spend roughly $80,000/year on the card so the points accumulation is pretty good. We also really like the priority pass. I like having a premier card, so if they were to get rid of this, I would probably revert to an Amex Platinum but I would get much less value out of it.

  12. Thanks for keeping us updated for the lazy asses like me that can’t be bothered to go check that other website.

  13. Parse each word of the Citi statement carefully … it confirms the rumor … they will not be offering the same benefits to new cardholders … and they have not promised not to touch existing benefits, either.

  14. Brett: Do not think they are getting the travel agent fee when you call them up and they book the hotel through the hotel’s website. They are getting the fee when you book through their website.

  15. Exactly @Bobo. They are basically saying they are leaving current holders as status quo but look forward to “reintroducing” it soon, which to me implies a change soon that will be introduced to new holders and change current ones. I plan to use it for the 4th night free until that goes away and then I will get rid of it and use my CSR for the better point accumulation and more versatile options for points usage.

  16. So the Prestige only has a $250 airline credit now for the year (effective annual fee $200), but it used to have $250 per calendar year (so $500 for first year) when this was the card all bloggers pushed on us?

  17. Citi ruined the card when they gutted so many benefits last year. In the past they had a product for a very broad target audience – I am positive that many customers canceled or downgraded the card which is hitting their profit margins on this product.

    Then the string of bad deals or losses (AA/Costco/Hilton) is not helping at all.

  18. I think the Citi Prestige is an amazing card, but only for a specific target market that travels. The principal benefits: 3x hotel/airfare points, $250 airfare credit (not airline fee credit but a genuine airfare credit), Priority Pass and 4th night hotel are superb if you travel reasonably frequently and stay in high-end hotels (which I do). If you don’t travel for leisure though, there are probably other cards that are better for you.

  19. I cancelled my Prestige card last year; I don’t stay 4 nights very often, and when I do I like to book through the hotel directly. If they hadn’t removed the AA Lounge visits I’d stilll have this card, but I couldn’t really find a very good use for it. I have way too many $450 credit cards… too bad, I liked the card before they gutted most of the benefits.

  20. I got rid of this card last year. I wasn’t planning on staying at any hotel for four nights. Thought I would reapply in 2019 when I requalify for the bonus. They didn’t want to offer me a retention bonus as they did for the Premier. I used the $250 credit before cancelling just to make sure I got the most out of it. Citibank has been really dropping the ball on credit cards the past two years.

  21. Its really such a shame Citi and AA couldnt work out a bigger arrangement including points transfers.

    I definitely use both my Citi Prestige and American Airlines/AAdvantage less than I otherwise would if it were easier to transfer citi miles into AA, so at least in my case they are both losing by not reaching an agreement.

    The AA program has considerably better redemption rates (esp on partners) than United or Delta but the points are much harder to accumulate efficiently without transfer partners (especially post SPG’s CC devaluation).

  22. 4th night free sounds great on paper – until I realized I never spend 4 nights in 1 city. I was just on a 2.5 week trip to NZ, Tahiti and Bora Bora. Never spent more than 3 nights anywhere. Spent 2.5 weeks in Spain a few years ago and same thing, 3 night seem to be a max – by then my wife and I have seen what we need to see and we are off to the next city.

    I guess if we wanted a beach vacation to plop down for a few nights it would work out but I have enough points to pay for at least half if not more of the nights so not sure the cash for 3 nights is worth the 1 free night.

    I have a lot of premium cards and this one has been the biggest disappointment. Long lead time to transfer points and their transfer partners are not really optimal. 4th night free is great for some but for my uses it is not relevant.

    Still waiting to find a way to dump these points into an account and close the card. I wanted to transfer to Etihad to book Royal Air Maroc and it would take 10-12 days and did not know if the seats would still be available – so I just used Amex and the points transferred instantly.

  23. @EricZ I am in a similiar position but I still find use of it for 3 night stays. If you go to Europe and are landing early in the morning you can book the night before and check in very early in the morning instead of waiting for your room to be ready (just email the hotel that you intend to get in after midnight so they dont cancel the booking. The hotel wont mind since theyre getting paid.

    You can also tack on a 4th night to increase the amount of points you get (starwood, hyatt, hilton, etc.) and just don’t let the hotel you are leaving early. Just be aware that sometimes you’re liable for resort fees/taxes on that 4th night… its still a cheap way to acquire a small amount of points (though you won’t earn Citi pts for that night).

  24. The four night mark works well for us as, fortuitously, four nights is usually the amount of time we like to spend while travelling in a place while vacationing (we like to take it leisurely).

    This year, I will be using the 4th night free 3 times: an Andaz in South-East Asia ($350 value), an independent boutique hotel in Greece ($750 value) and a very high end luxury hotel in Italy ($1,000), for a total value of $2,100.

    In 2017 I used it 4 times: for a premium Japanese chain hotel in Tokyo ($350), Intercontinental in South-East Asia ($350), a Mandarin Oriental in the U.S. ($350), and a Las Vegas Mega-resort ($350) for a total value of $1,400.

    For 2019, I’ve already booked into a luxury resort in the Caribbean ($800/night) with anticipation of getting the 4th night free.

    What I love about the 4th night free is how flexible it is. You can book it for any rate (not just through the rates offered by the Citi travel agent), any room or suite, at any hotel. I use it several times a year, whereas when I had the Amex Platinum I rarely would use their FHR program. This feels like genuine cash-in-hand value without any annoying rules or restrictions. But, I totally get how it would not work for a lot of people.

  25. I’ve been waiting and waiting for a bonus, and only want it for the 4th night free. I’m fed up with changing requirements on hotel status and what you get, being stuck to certain chains, hoping for an upgrade that may never come. I’d rather pick whatever hotel I want, pay for an upgraded room and get 25% off.

    But if they discontinue the card my guess is they won’t keep the benefits around for existing cardholders for very long either. So it doesn’t seem like it’s worth jumping in before it’s too late.

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