Posted by: John S Kiernan

EDITOR’S RATING 3.9 / 5 PROS

• Free 4th night for hotel stays
• $250 annual airline credit

CONS

• $495 annual fee
• No 0% financing
• Above-average regular APR

The Verdict:  You can’t spell “Prestige” without the letters in “trip.” And you might be able to take a few of those for free, thanks to the Citi Prestige® Card. That is, of course, if you can handle one to the bank to fetch some cash for the card’s steep annual fee. Indeed, this travel rewards card costs a whopping $495 per year – a fact that alone limits its use to wealthy frequent travelers who charge a significant amount to plastic.

If you fit that description, then it’s at least worth considering what Prestige actually has to offer. This includes an initial bonus worth up to $500 in airfare, $250 each year toward airline expenses, and solid spending-based rewards.

One thing that Prestige does not provide, however, is an advantageous financing environment. It doesn’t offer 0% introductory interest rates, and its regular APR is above-average for an excellent-credit credit card. You can therefore add “always pays bill in full” to the list of attributes you must have for a Citi Prestige® Card to be a worthy addition to your wallet.

That being said, we ultimately don’t recommend this card due to its prohibitive fixed cost. While you could easily squeeze $495 in annual value out of it, the fact that you’ll be starting from such a considerable deficit makes it unnecessarily difficult to maximize your returns.

The Highlights

• $250 Annual Air Travel Credit: Each year, you will automatically get a statement credit for $250 in airline charges – including air fare, baggage fees, upgrades and “some in-flight purchases,” according to Citi’s website – within two billing periods of such charges posting to your account. 

• Free 4th Night For Hotel Stays: As a Citi Prestige cardholder, you will have the ability to obtain a free night for any hotel stay of at least four consecutive nights paid for with your card. This can obviously prove to be a good deal, but there are a few important caveats to note before you get too excited. For starters, only reservations booked through thankyou.com or by phone qualify for this benefit. Citi’s Prestige Concierge can help connect you, but it’s still not an easy process and will no longer be available for the Fourth Night benefit starting September 2019. What’s more, there’s no guarantee that you’ll be quoted rates as low as you might find on third-party travel-comparison websites such as Kayak.com, and you cannot use points to book your stay. However, you are guaranteed a price that is equal to or lower than what is quoted on the hotel’s website.  

• Up to 5 Points Per $1 Spent: With all of the big-ticket benefits that Prestige provides, it would be easy to overlook its ongoing rewards. After all, what’s 5 points per $1 spent on airfare and restaurants, or 3 points per $1 spent on hotels and cruise lines, compared to a pile of 50,000 points? Well, when you look at it that way, not much – especially since an actual airline or hotel chain has to be the billing party. Flights and nights booked through third-party booking websites such as Kayak.com do not qualify. They will instead accrue rewards at the card’s base earning rate of 1 point per $1 spent, just like all other purchases.However, unlike the card’s initial bonus, these rewards offer more than a three-month steal. Over the course of a year, the average person would earn roughly $390 in airfare, or gift cards just from this per-dollar rewards structure. That’s based on $32,010 in annual spending and the fact that points are worth 1 cent with each of those redemption methods.

The Lowlights

• $495 Annual Fee: The most glaring downside to this flashy travel rewards vehicle is undoubtedly its stratospheric annual fee. After all, the $495 that you have to shell out to Citi each year is nearly enough to buy two roundtrip airline tickets from New York to Los Angeles. Better still, you could use it to buy roughly eight shares of Citigroup stock – based on its March 6 closing price of $62.80 – and perhaps actually see your money grow over time.

• No 0% Introductory Rates: In case a hefty annual price tag and a plethora of rewards didn’t already clue you in, it’s important to note that this offer was not designed with financing in mind. Another clear indication of that is the card’s lack of a low introductory interest rate for either new purchases or balance transfers. Balance transfers are an especially bad deal, considering that you’ll also have to pay a fee equal to 3% of any amount transferred.

• Above-Average Regular APR: A 17.99% - 25.99% (V) regular APR certainly isn’t the highest on the market, but it is above the 14.49% average for credit cards for people with excellent credit. This merely underscores the importance of always paying your bill in full if you decide to apply for Prestige and ultimately get approved.

Other Things To Consider

• No Foreign Transaction Fee: It would be rather unfortunate for a serious travel rewards credit card to charge a foreign transaction fee in this day and age, so it’s good that Prestige does not. Using it or any other no foreign transaction fee credit card on the Visa or Mastercard network as your main spending vehicle while traveling abroad will allow you to save up to 9% on currency conversion.

• $75 Annual Fee For Authorized Users: This is a pittance compared to the primary annual fee, but when you’re already spending $495 each year on a credit card, wouldn’t you expect something like this to be free? Most of the big-ticket benefits are exclusive to the primary cardholder, after all. 

• Rewards Don’t Expire: Unlike most Citi ThankYou Points, which expire after three years, the only time the points earned with the Prestige Card can expire is if Citi shuts down the whole ThankYou Rewards program. Even then, you would have 90 days to redeem any points that you’d accumulated.

• Point-Transferring Capabilities: The Citi ThankYou Rewards program boasts nine travel partners to whom you can transfer points earned with the Prestige Card for free, typically at a 1:1 ratio. This could enable you to pool earnings from multiple rewards programs in order to book your travel of choice. You just need a minimum of 1,000 points and to make sure that you avoid transferring points to a program where they’ll be worth less than if you’d redeemed them through Citi. That is, of course, if you can find a travel partner that fits your travel plans. None of Citi’s partner airlines is domestically based.

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via Finance Xpress