Citibank’s Drastic Credit Card Changes

Citibank has just informed their clients of some changes that will be happen on their credit cards.

Because of the pandemic, a lot of people and businesses have been struggling; of course, the banking, aviation, and hospitality sectors are not exempted. In order to somehow mitigate their losses, several companies have made drastic changes within their company: laying-off employees, cutting costs, minimizing operations, and the like. For Citibank, they had to devalue their credit card rewards/points system.  

What changed?

The changes seem to affect most of Citibank’s credit cards. From Rewards, Platinum, Gold and Classic Card, to Cashback and even their Premier Miles. 

In a nutshell, this means that most of the current rewards system have devalued by 1.6x! Take for example their Premier Miles. Previously, you could convert 1 PremierMile to 1 Airline Mile or 1 Hotel Loyalty Point, with 1 PremierMile costing PHP 30.00. Now, it would take 1.6 PremierMiles to get 1 Airline Mile or 1 Hotel Loyalty Point. This translates to a PHP 48.00 spend before you can get 1 Airline Mile or 1 Hotel Loyalty Point. The same applies to cash credit redemption where the previous exchange rate was 3 PremierMiles for every PHP 1.00. With it changing to 5 PremierMiles, it’s almost a 1.6x increase too.

As for Prestige, I haven’t received any updates yet but I hope there won’t be any. They’ve already decreased the benefits and increased (tentatively halted) the annual fee after all. 

What happens now?

For one, Citi PremierMiles will definitely be out as (my) top miles-earning credit card for general use. It will also be harder to get better value for your spends although it’s definitely still better than getting nothing.

Based on the table above, you can see how the value we’ll be getting has decreased by a lot. In addition to the the devaluation from Citibank, another factor that could put the valuation at risk would be if even the airline miles itself has devalued. This could either be the miles needed to redeem a flight has increased or they lowered the cost for the flight (the latter of which is pretty unlikely to be honest).

What I plan to do going forward.

At the moment, I plan on keeping my Citibank PremierMiles credit card since I can still use it for Citi PayAll. Even with the feature’s 3% fees, it seems like we can still get something out of it. Of course, this will also have to rely on whether the airline miles will continue to be valued the same. If it goes down, then I would definitely have to rethink about keeping the card.

With the other credit cards I have now, they should be able to take up the transactions coming from my PremierMiles and still get better value. 

What about you? How do you think will these changes affect you? Are you going to keep using Citibank’s credit cards? Please do share on the comments below!