Update: Doctor Of Credit has received a statement from Citi that they “remain committed to the Prestige product and servicing our valued existing cardmembers. We look forward to reintroducing the card for new cardmembers in the near future.”

I am leaving the post up for context, but have edited the title accordingly.

Let me start by saying that I have no inside knowledge here, so until it’s officially confirmed by Citi, I consider this to be a rumor.

That being said, Doctor Of Credit (who usually gets this stuff right) shares that a “reliable source” tells him that the Citi Prestige will be discontinued this fall, and that this information was shared with bankers today.

This isn’t the first time there has been such a rumor, and while some have suggested that August 18 is the day it’s being discontinued, there’s no further information on that front.

What are the benefits of the Citi Prestige Card?

On the most basic level, the $450 annual fee Citi Prestige Card offers:

  • Triple points on airfare and hotels, and double points on dining and entertainment
  • A $250 annual airline credit, which can be applied towards any airline ticket booked directly with an airline
  • A Priority Pass membership with the ability to take two guests with you
  • A fourth night free hotel benefit that you can use as often as you’d like

There are some other perks, but those are what I view as being most important. When you factor in the $250 airline credit (which I think is roughly worth face value), that means this is essentially a card that costs you $200 per year, which is incredible if you use the fourth night free benefit.

Why can’t Citi make the Prestige Card work?

We’ve seen so much competition in the premium card market, in particular with the Chase Sapphire Reserve® Card and The Platinum Card® from American Express. The way I view these cards:

  • Chase is worried they’ll never make money with the Sapphire Reserve, though they’re noticing a big increase in customers as a result of the card, and hope that those people engage with Chase in other ways
  • The Amex Platinum Card isn’t actually that rewarding for spend (other than offering 5x points for airfare purchased directly with airlines), so presumably Amex’s margins are better when it comes to making money on cardmembers for spend, since they aren’t offering huge rewards for spend

Citi is in a tough position, and I suspect this comes down to a few things:

  • Citi spent a ton of money on their Costco deal, and I suspect that has caused them to lower budgets in other areas
  • Probably related to that, American and Citi weren’t able to come to a full deal when they renegotiated their contract, so Admirals Club access was eliminated as a perk of the card last year
  • At this point the real selling point of the card is the fourth night free hotel benefit, and I suspect the issue is that Citi is losing huge money on this, since many of us save thousands of dollars per year with this perk
  • For those not using the fourth night free benefit, the Citi ThankYou® Premier Card is an all around better option, as it has better bonus categories and a much lower annual fee

So I don’t think it’s that Citi couldn’t make the card work, but rather I imagine they may have lower budgets due to the Costco deal, and also the one benefit that truly sets the card apart is probably costing them a lot of money.

Should you apply for the Citi Prestige Card now?

You can still apply for the Citi Prestige Card. It doesn’t have a welcome bonus, so you’d be paying the $450 annual fee and would be getting it because you value the benefits. If you think you’d get value out of the fourth night free benefit then it could make sense.

However, keep in mind that the Citi ThankYou® Premier Card currently has a welcome bonus of up to 60,000 ThankYou points, and that bonus isn’t available to those who have opened or closed a Citi Prestige or Citi Premier Card in the past 24 months.

In other words, if you open a Citi Prestige Card now you wouldn’t be eligible for the Citi Premier. So that means the opportunity cost of getting the Citi Prestige is at least 60,000 ThankYou points.

The further thing to consider is the difference in annual fees. One card has a $450 annual fee, while the other has a $95 annual fee waived the first year. Even when factoring in the $250 airline credit, that’s a difference of $200 in the first year.

So the opportunity cost of applying for this card is at least 60,000 ThankYou points plus about $200.

What happens to existing cardmembers?

Generally speaking card issuers provide notice of any major changes to a card, so I think it’s unlikely the card would be discontinued for existing cardmembers immediately.

Hopefully they’ll continue to honor the current benefits, though I suspect more likely than not they may eventually try to convert this into another card. This could be one year down the road, it could be a few years down the road, or it could never happen. We don’t know.

But I would expect that for at least some amount of time it will be business as usual.

Bottom line

While nothing has been officially announced, there are several reliable rumors that the Citi Prestige may soon be discontinued. I have no inside knowledge there, and we’ll have to wait and see how this unfolds.

We don’t know what this means for existing cardmembers, though if this happens I imagine the card will continue to be honored for at least some amount of time. Meanwhile if you don’t yet have the card, it could make sense to apply. Just make sure you fully understand the opportunity cost of doing so.

What do you make of this Citi Prestige Card rumor?

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