Are Citi Credit Cards Still Competitive?

The credit card universe is volatile these days. If you doubt it, consider this: Citibank abruptly removed most travel and consumer protections from its cards on September 22. If you’re a casual consumer (as opposed to a points and miles junkie), you may not be familiar with the details. Here’s a list of benefits that have been removed from all Citi cards (Prestige included):

  • Worldwide Car Rental Insurance
  • Trip Cancellation & Interruption Protection
  • Worldwide Travel Accident Insurance
  • Trip Delay Protection
  • Baggage Delay Protection
  • Lost Baggage Protection
  • Medical Evacuation
  • Citi® Price Rewind
  • 90 Day Return Protection
  • Missed Event Ticket Protection
  • Roadside Assistance Dispatch Service
  • Travel & Emergency Assistance

All cards will keep Extended Warranty and Purchase Protection, except for the Double Cash and Dividend Cards. Prestige retains cell phone protection and fourth night free on reward bookings. The Costco cards also kept car rental and travel accident insurance, roadside assistance and travel and emergency assistance.

The list is staggering, even though the value of specific benefits varies from one person to another. What’s behind the move? Most speculation centers on the constantly escalating signup bonuses and reward offers, which have created an arms race in the credit card world; the cost of attracting new customers keeps going up, particularly if those customers are churners who won’t hold the card long-term. In their wholesale elimination of benefits, Citi may be relying on the assumption that most cardholders don’t use them very often (and in fact, many people may not even be aware they existed in the first place).

Ever since the announcement, the travel blogosphere has been filled with advice on how consumers can retain certain benefits by switching cards. Given the rapidly changing landscape, it would be wise to proceed carefully with that strategy. Chase eliminated price protection from all cards last year, along with return protection from every card except Sapphire Reserve. With all the recent changes, it’s hard to make a case for the $450 Citi Prestige; if you want the broadest possible collection of benefits, though, your best bets are still high-end cards such as Sapphire Reserve or Amex Platinum. Here’s a quick recap of the perks offered by each (for purposes of this discussion, we’re only focusing on travel and consumer protections and not all the ancillary benefits of these cards):

Chase Sapphire Reserve: Primary rental car insurance (up to $75,000 for theft and collision); roadside assistance (up to $50 per call four times each year); trip cancellation (up to $10,000 per trip); trip delay (up to $500 per ticket for delays over six hours that require an overnight stay); lost luggage (up to $3,000 per person); baggage delay (up to $100 per day for five days); travel accident insurance; purchase protection (up to $10,000 per claim and $50,000 per year); emergency medical and dental benefits (up to $2,500); emergency medical evacuation assistance. The annual fee on the card is $450, but there’s a $300 rebate applied automatically with your first travel purchase.

The Platinum Card from American Express and The Business Platinum Card from American Express OPEN: Secondary car rental insurance (up to $75,000 for theft and damage, which picks up after your own insurance exhausts coverage); extended warranty (up to $10,000 per claim and $50,000 per year); return protection (up to $300 per item and $1,000 per year, if the merchant won’t accept your return); purchase protection (up to $10,000 per claim and $50,000 per year); premium roadside assistance (up to $50 per call four times per year); emergency medical evacuation assistance. The annual fees are $550 and $595 respectively.

The Bright Spot in the Citi Credit Card Lineup

Amid all the negative changes, there’s a piece of good news. Rewards earned on the Double Cash card now transfer to ThankYou points on a 1:1 basis ($1 in cashback translates to 100 ThankYou points). This is a potentially lucrative offer, given that the Double Cash card earns 1% when you make a purchase and an additional 1% when you pay for it.

To get the maximum value out of this situation, first, transfer your cashback to ThankYou points. If you hold the Premier or Prestige card, you can then transfer your points into miles on 14 airlines: Singapore Airlines, EVA Air, Thai Airways, Turkish Airlines and Avianca LifeMiles (all Star Alliance); Air France/KLM in Skyteam; four unaffiliated carriers (JetBlue, JetPrivilege, Virgin Atlantic and Ethiad).

Depending on your priorities, this benefit should take some of the sting out of Citi’s canceled travel and consumer protections.

Bottom Line: Everyone gets credit cards for different reasons. If your primary goal is the accumulation of points and miles, the new perk of the Double Cash card should work to your advantage. If you relied to any extent on those lost benefits, though, you may want to reassess your strategy.

Source: frugal travel guy

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