CreditCardForum.com doesn’t advertise Citi products any longer but this review will give you an idea of how to optimize your earned ThankYou points if you already have one of their cards. When the Citi Thank You network was first launched it was hailed as being the future of banking: relationship-based rewards for having multiple accounts. Yet now, nearly a decade later (it was launched in ’04) we have seen very few major banks come out with similar programs. Why not? And what are the pros and cons? Just because I advertise their cards doesn’t mean I’m going to hold back on telling you both the good and bad that comes with this rewards program.
- The Citi cards are not as competitive as they could be when it comes to rewards earning and redemption value. Their Forward card had 5x points on categories but they discontinued it back in 2013. On their remaining cards, your bonus categories are only 2 points per dollar while everything else is only 1 point. You can earn up to 6% cash back with other cards.
- Depending on how you redeem, your points are not always worth 1 cent each (the bar for what’s generally considered good value). For example, some of the gift cards yield a value of only $.008 (8/10ths of a cent) or even less per point. Fortunately though, they do have a selection of $25 and $50 gift cards that are at the full penny per point conversion (so this is by far the best redemption option since they can’t hide behind a devalued points conversion process with gift cards as easily). You can also get 1 cent per point when you redeem for travel certificates toward card rentals and hotels.
- If you have a qualified Citibank checking account or other financial product from Citi in addition to your Citi credit card, you can enroll it in the program. Once you do so, direct deposits, bill payments and debit card transactions will earn your extra points. The points you earn from those actions and your card go into one ThankYou account. Obviously, this makes it easier to rack up rewards fast. December 2014 UPDATE: Citi has decreased the types of accounts that qualify for additional points. Student accounts and basic banking accounts no longer qualify. You now must have a Citigold account, Citi Private Bank account pr Citibank account package. See the following updated chart:
- The Citi Thank You rewards program continues to grow larger and I expect the variety of redemption options to keep getting bigger.
Best ways to spend your Thank You points
When it comes time to redeem, how can you get the highest Citi Thank You point value possible? Well I touched on a couple pointers above but here’s closer look at what is and isn’t the best value:
- Avoid gas cards. Yes, you can buy a Sunoco $100 gift card for 10,000 points (1 cent per point value) but when you do that, you’re missing out on the 3-5% in rewards you would be earning by paying with a good gas rebate credit card. Same applies to department stores and restaurants, if you have a credit card that gives higher rewards for those categories.
- Avoid cash and equivalents.
A $100 cash reward will cost you 16,000 points (0.625 cents per point). The statement credit options for higher amounts do give you a slightly better conversion, but still fall far short of getting a penny per point (35,000 points = $250 statement credit = 0.714 cents/point). For 2014 the cash conversion ratio is now worse at 10,000 points = $50 (1/2 cent per point).
- Avoid most merchandise. Not to single out the Citi Thank You network, because this holds true for most credit card rewards programs. More often than not the merchandise doesn’t give you the best bang for your buck. Here’s an example…
- Music downloads. For all increments – even as little as $1.00 worth of music – you get 1 cent value per point. If you only have a few points and are itching to spend them, this is a good deal. You can get downloads from artists on Sony and Universal labels (hint: Although these aren’t through iTunes you can still put them on your iPod/iPhone).
- Charitable donations. On donations of 5,000 points and up, you get 1 cent/point for donations to Red Cross. The drawback though is this will not count as a tax-deductible donation (but that only matters if you itemize your deductions, anyway).
- $25+ gift cards. In my opinion, the best way to use Citi Thank You points (how I usually spend mine) is the gift cards from partners. Depending on the merchant, you can get full value on many $25 and $50 gift cards. But as mentioned, it’s best to choose retailers that wouldn’t take away from high reward earning opportunities you get through credit card spending (i.e. the gas card example).
- Travel gift cards: Using your points for at least $25 in travel certificates (which can be used for certain car rental companies, cruises and hotels) will get you a 1-cent-per-point value.
- Point transfers: If you have the ThankYou Premier, Citi Prestige or Citi Chairman card, you can transfer your points into various airline and hotel loyalty programs. For the most part, you’ll get 1 point/mile per ThankYou point, but in some cases, you’ll get 2 points/miles per Thankyou point. These transfered points have a lot of potential: If you redeem them wisely after you’ve transferred, they can be worth more than a cent each. Why? Many airline frequent flier programs require you to redeem in set increments for reward seats. If you find a ticket that has a high cash price but requires relatively few points, your points could be worth a few cents each. You’ll get the most value if you redeem for first-class international flights.
Ultimately, the Citi ThankYou rewards program is what you make of it. If you redeem your points in a strategic manner, you can get a decent rebate on your spending. On the other hand, if you redeem for whatever your heart desires, your ThankYou points value may be up to 50 percent less than what the “good ideas” above will give you.
What do you like best (and least) about Citi’s rewards program?
As for me personally, I stopped using my Citi TY cards – not only because the points are inferior, but also because the customer service hasn’t been exactly an A+ experience for me. I’m now using Chase Ultimate Rewards exclusively.
This post was written or last updated May 19, 2015