How many times did you use the “4th night free” last year?

We’re living in the golden age of travel, and the same could be said for credit cards. Every time it seems as if a card has reached an extreme new height, like offering 5x points on airfare, another perk pops up from a competitor. At the moment, it’s one big move after another, and this week Citi laid out details on the future of the Citi Prestige luxury credit card. Depending on how you travel and how you spend, it’s either great news, or a reason to cancel…

Confirmed Citi Prestige 2019 Changes

The $450 a year Citi Prestige luxury travel credit card is changing. For starters, the annual fee will rise to $495 per year. The card will undergo a major “renovation” in January of 2019, including…

  • Two use limit on “4th Night Free” per year.
  • 5x points on dining and airfare, rather than 3x. 
  • 2x points on “entertainment” is going away.
  • $250 annual airline credit becomes general travel credit.
  • New cellphone protection for damage and theft.
  • End of 25% bonus using points for air travel at ThankYou Rewards.

The Good

5x points on dining and airfare will instantly make the Citi Prestige an industry leader in dining, and airfare purchases when it relaunches applications in January. Amex Platinum currently also offers 5x points on airfare and this is a wildly positive benefit for high spenders, especially across these two categories.

People and phones. A new cellphone protection benefit will go a long way with many people, as this is a fairly rare offering in the credit card game. The exact coverage remains to be seen, but being able to claim on a damaged cellphone will be very valuable to frequent travelers.

$250 as a general travel credit, rather than restricted to airlines is fantastic. For many, $250 toward a hotel, Uber or other travel related purchase would be far more useful. That’s especially true for those in the points game, that don’t like to pay for flights in the first place!

The Bad

Limiting the “4th night free benefit to twice a calendar year is a big blow for many. The program is one of the easiest ways to justify the card’s (now even higher) annual fee and by far the largest differentiator between Citi Prestige and other premium cards. Having said that, many travelers fail to utilize the benefit more than twice, and since the value is uncapped, it can still be extremely rewarding.

Ending the 25% bonus when cardholders use points to book “paid” airfare through the Citi Thank You Travel Center is a big blow. The market has largely shifted in recent years thanks to low fares, and it quite often makes more sense to book a cash ticket than redeem airline miles. This system allowed cardholders to extract solid value, while earning points and elite status. It’s no longer a good value, and given that less premium cards, such as Chase Sapphire Preferred offer this option, it’s a bit strange. Let’s hope for great new airline and hotel transfer partners.

The rising annual fee, from $450 to $495 is not nothing. Annual fees are only worth paying if you know you can make your money back, and this sets the goal post further. Realistically, the $250 travel credit makes the annual fee more like $245 you’ll need to earn back. This can of course be done via major spending on airline tickets and dining, and also in a single use of the “4th night free” card benefit. If you’re a CitiGold customer or Citi Private Client customer, the annual fee will remain $350, which helps.

Keep It Or Chuck It?

The success of this card really depends on your ability to redeem the “4th night free” benefit. If you can redeem it twice, for hotels worth more than $200 per night, you’ve come out ahead, and with the exciting new 5x earning on two popular categories, that’s especially true. If however you hardly ever buy airline tickets or dine out, won’t make use of the “4th night free” then the card probably isn’t right for you. However, if those two things are true, it probably wasn’t right for you in the first place.

What do you think of the Citi Prestige changes?