Posted by: John S Kiernan

Rating: 4.6 / 5

The Verdict: Whether it’s truly a premier option is a matter for debate, but the Citi ThankYou Premier Rewards Credit Card certainly represents a solid way to subsidize your travel expenses, assuming you have excellent credit.

Your first year with ThankYou Premier promises to be an especially great one, considering its $95 annual fee doesn’t kick in until year two and you have the opportunity to earn 40,000 bonus points by spending $3,000 during the first three months your account is open. That bounty is redeemable for either $400 in gift cards or $500 in travel booked through Citi, as your earnings will always be worth 25% more when redeemed for the latter option.

That’s important to remember as you consider the 3 points per $1 spent on travel (including gas) that you’ll earn, in addition to 2 points per $1 on dining and entertainment, and 1 point per $1 on everything else. In other words, the card’s regular earning rates range from the points equivalent of 1% cash back up to 3.75% cash back, depending on where you make purchases and how you approach redemption. However you decide to use this card, carrying a balance from month to month should definitely be avoided. ThankYou Premier does not offer 0% introductory rates, and its regular APR can be as high as 23.24%.

So, to recap, this card is best for frequent travelers with excellent credit who always pay their monthly bills in full and are fine with booking all of their accommodations through the ThankYou Rewards website. To learn more, just keep reading below.

The Highlights

• Initial Bonus Worth Up To $500: At 40,000 points, ThankYou Premier’s initial bonus is in the top tier of offers marketwide. At $3,000 in the first three months, the spending threshold that you must meet to qualify is about average. And redeemable for $400 in gift cards or $500 in travel booked through Citi, this welcome gift brings both value and flexibility to your wallet.

  The trick, of course, is to take advantage of such offers when they’re attainable with your standard spending and when the resulting benefit will pay for something you would buy anyway. 

• Up To 3 Points Per $1 Spent: Citi ThankYou Premier’s regular rewards are as simple as 1, 2, 3. It gives you 1 point per $1 spent on most purchases, except for those categorized as dining out and entertainment (which earn 2 points per $1) or travel (3 points per $1). If you’re wondering, here’s how Citi defines “travel” and “entertainment,” in addition to its other exclusions:  

  Travel: Airfare & Hotels Car Rental Agencies Gas Stations Taxis & Tolls Parking Garages Public Transportation Cruises Travel Agencies

  Entertainment: Movie Theaters Amusement Parks Tourist Attractions & Museums Theatrical & Sports Promoters Record Stores Video Rental Stores Music Downloads Live Performances Sporting Events

  When you consider this card’s complete rewards package through the prism of the average person’s spending habits, it would yield roughly $1,436 in net rewards value over the first two years of use, according to our calculations, assuming points are redeemed for travel.

• No Foreign-Transaction Fees: You never want to see a travel rewards credit card that charges foreign-transaction fees. Fortunately, you don’t need to shield your eyes when gazing upon ThankYou Premier, as it does not charge any such pesky fees, which can drive up the cost of both international travel and purchases made through merchants based abroad. That enables you to take full advantage of Visa’s and MasterCard’s low exchange rates, which in turn will allow you to save up to 9% on currency conversion relative to exchanging hard currency at a local bank or airport kiosk.

The Lowlights

• $95 Annual Fee After Year One: The fee-free first year fostered by ThankYou Premier certainly represents a benefit to users. However, those initial savings appear impressive largely because of the high costs that follow. Each year following the first is accompanied by a $95 membership charge, which must be paid promptly to avoid interest charges and, ultimately, to keep your account in good standing. Whether it’s wise to foot this bill depends on how much you spend each year — the rewards you earn need to outweigh the cost — as well as the availability of more cost-effective options. 

• Above-Average Regular APR: You should try to avoid carrying a balance from month to month with the ThankYou Premier Card, as its regular APR promises to be quite pricey. It’s advertised as 14.24% to 23.24%, depending on your creditworthiness. That means it ranges from above average for someone with excellent credit to above average for someone with fair credit, according to WalletHub’s latest Credit Card Landscape Report. Considering that you need excellent credit to get approved for this card, neither extreme is very user-friendly. 

• No 0% Intro Rates: Many of the best credit cards on the market, even those ostensibly designed for rewards, offer interest-free financing for a period of months after account opening. Some offer 0% on new purchases or 0% on balance transfers, whereas others offer both. The Citi ThankYou Premier Credit Card is not a member of any of those three groups, however, as it won’t give you any sort of reduced introductory interest rate. Rather, its unfavorable regular APR will be in effect from the very beginning. 

Other Things To Consider

• Earnings Are Unlimited & Points Don’t Expire: Earning limits and expiration dates for rewards are among the sneaky credit card-company tricks that have been significantly diminished in the wake of the Great Recession. However, some cards still bury such caveats in their fine print, so it’s important to point out that Citi ThankYou Premier is not among them. This serves to simplify things and reduces the pressure to redeem strategically. 

• Numerous Redemption & Transfer Opportunities: You already know that you can redeem your ThankYou Premier rewards for gift cards and get even more value by opting for travel booked through Citi. But those aren’t your only options. You can also “Shop with Points” on Amazon.com, swap your earnings for merchandise, make a mortgage or student-loan payment to any lender or transfer your rewards balance to one of Citi’s 13 hospitality partners (none of which is a domestic airline, by the way). You can find more information in our review of the Citi ThankYou Rewards program. 

• Citi Cardmember Benefits: Having any Citicard in your pocket provides a number of semi-exclusive benefits, such as ticket opportunities through Citi Private Pass, price protection through Citi Price Rewind and access to a concierge service.

Compared To The Competition

  It’s impossible to tell if a credit card is truly a premier choice without the proper context. More specifically, you should see what else is out there before submitting an application for the Citi ThankYou Premier Credit Card. We’ll help you out with that below by comparing the card to its most notable competition.  

Citi ThankYou Premier

Citi ThankYou Prestige

All that most people need to know about ThankYou Prestige is that it charges a $450 annual fee. Sure, it offers an initial bonus worth up to $800 as well as a $250 annual air travel credit, airport lounge access and a host of other perks, but the price tag is simply too high for the card to be feasible for most folks. As a result, choosing the winner of this matchup is pretty straightforward. To learn more about the high-priced loser, check out our in-depth Citi ThankYou Prestige review.

Winner: Citi ThankYou Premier  

   

Citi ThankYou Premier

Chase Sapphire Preferred

Chase Sapphire Preferred offers one of the most valuable and flexible travel-related initial rewards bonuses on the market, at 50,000 points redeemable for $625 in travel booked through Chase. It also gives you 2 points per $1 spent on travel and dining at restaurants as well as 1 point per $1 on everything else. And like ThankYou Premier, Sapphire Preferred charges a $95 annual fee beginning in the second year.

In other words, Sapphire Preferred will give you a bit more value upfront, while ThankYou Premier is more rewarding in the long run. When you consider these cards through the prism of the average person’s annual spending habits, Sapphire Preferred yields $1,338 in value over the first two years of use, compared to $1,436 for ThankYou Premier. And that is why we’re giving the win here to ThankYou Premier.

For more information about the narrow runner-up, spend a few minutes reading our Chase Sapphire Preferred review.

Winner: Citi ThankYou Premier  

   

Citi ThankYou Premier

Barclaycard Arrival Plus

Arrival Plus is pretty much the top dog among credit cards offering travel rewards that are unrestricted by an affiliation with a particular airline or hotel chain. It gives you 40,000 bonus miles for spending $3,000 during the first 90 days your account is open, which is redeemable for a $400 statement credit that can be used to pay for any travel-related charge on your bill. It also provides the miles equivalent of 2.2% cash back on all purchases, as long as you redeem for travel credits. Furthermore, it’s annual fee ($89 beginning in the second year) is lower than ThankYou Premier’s.

When you evaluate these two offers in the context of the average American’s spending, Arrival Plus comes out slightly ahead there as well, yielding $1,606 in value over the first two years of use, compared to $1,436 for ThankYou Premier. For more insight into this top-of-the-food-chain travel rewards card, read our complete Barclaycard Arrival Plus review.

Winner: Barclaycard Arrival Plus  

   

Citi ThankYou Premier

Citi Double Cash

Citi Double Cash represents an excellent foil for ThankYou Premier, considering that it offers cash back — not travel rewards — and does not charge an annual fee. It’s quite valuable, too, and is therefore worth considering if you’re not certain that travel rewards suit your lifestyle.

The offer is quite simple: You earn 1% cash back on every purchase and another 1% on the amount of your monthly bill payments. That makes it best for those who pay their bill in full every month, and assuming the average person does that, he or she would earn roughly $1,141 in rewards during the first two years. Nevertheless, Citi ThankYou Premier’s initial bonus helps it top that mark, yielding around $1,436 over the same timeframe.

The victory must therefore go to Citi ThankYou Premier, considering its absolute-value advantage, but just keep in mind that this lead figures to fade the longer you keep your account open. As a result, you might still want to take a peek at our in-depth Citi Double Cash review.

Winner: Citi ThankYou Premier

from Wallet HubWallet Hub


via Finance Xpress