I have over two dozen credit cards and I review my strategy from time to time based on my spending patterns and the development of card benefits. For the most part, I’m pretty happy with my card portfolio, though there is one thing I keep going back and forth – I currently have that Citi Prestige cardbut should i downgrade it to that Citi Premier® map (Review)?
Why I want either the Citi Premier or the Citi Prestige
The reason I want either the Citi Premier or the Citi Prestige has very little to do with any of the actual cards. Rather, it is because there is no annual fee Citi® Double Cash Card (Review) is my go-to for daily expenses. To maximize the value of the card I will need one of the cards above:
- The Citi Double Cash offers 1% cashback when you make a purchase and 1% cashback when you pay for that purchase
- If you have the Citi Double Cash in conjunction with the Citi Premier or the Citi Prestige, all awards can be converted into Citi ThankYou points at a rate of one cent per point and then transferred to airline partners
- Since I rate Citi ThankYou points at 1.7 cents each, the value of these rewards increases by 70% according to my assessment. This makes it the best card for everyday expenses in my opinion
With the Citi Double Cash, I get 2x transferable points for every dollar spent
Breaking the Citi Prestige Value Proposition
I already have the $ 495 annual fee Citi Prestigealthough in many ways the card has become less valuable to me over time. This is how I see the breakdown of the card benefits:
- The Citi Prestige offers $ 250 annual travel credit, which I value more or less at face value. So I think this card is around $ 245 a year
- The only money I actually spend on the Citi Prestige is in the Restaurants category as the card offers 5x Thank You Points for the industry leading restaurant expenses
- The Citi Prestige offers a Priority Pass membership that many other people will appreciate. However, I have Priority Pass memberships across a lot of cards so this isn’t a benefit that I personally appreciate
- The Citi Prestige used to offer an incredible fourth night free hotel benefit that I used to consider the most valuable credit card benefit ever. Unfortunately this was significantly devalued in 2019 and I haven’t used it since
In other words, I am paying ~ $ 245 a year and in doing so I have the opportunity to maximize the value of the Citi Double Cashand also earn 5x points for shopping in restaurants.
The Citi Prestige offers 5x points for restaurants
Citi Premier Value Proposition Breakdown
The main reason I think about this Citi Premier is because it has an annual fee of only $ 95, and it would still give me full access to the value of the Citi Double Cash::
- I’d rather pay $ 95 a year than $ 495 a year, although it may be closer to $ 95 a year versus $ 245 a year after considering the Citi Prestige’s $ 250 travel credit
- The Citi Premier is incredibly rounded as it offers 3x points for restaurants, gasoline, groceries, air travel and hotels
- For the average consumer, I think the Citi Premier is hard to beat when it comes to bonus categories, although I have a lot of cards with great bonus categories so I’m not sure I would actually be spending a lot of money on the card
The Citi Premier would allow me to maximize the Citi Double Cash
What is important in mathematics
This brings me to the math in deciding between these two options, both of which allow me to maximize that Citi Double Cash::
- I could still pay the $ 495 annual fee Citi Prestigewhat really costs me $ 245 a year; This way I can earn 5x Thank You Points for the food when my next best option for food spending is Chase Sapphire Reserve® (Rating), which offers 3x Ultimate Rewards points
- I could downgrade to that Citi PremierThat saves me $ 400 a year (or really $ 150 after I factor in the $ 250 Citi Prestige travel credit), but then I won’t be using the card for spending
To me, the math seems to be due to how much I spend on food. With the Citi Prestige, I earn a ~ 8.5% return on meal expenses (based on my rating of 1.7 cents per ThankYou point) while the next best option is to get a ~ 5.1% return on the Achieve food expenses with that Chase Sapphire Reserve (The card offers 3x Ultimate Rewards points, which I rate at 1.7 cents each).
That’s an incremental return of ~ 3.4% on food, so I would offset the $ 150 difference in cost between cards with ~ $ 4,400 in food spend per year. I easily spend that on food per year, especially considering it includes takeout and delivery.
Maybe the math works differently if I got this American Express® Gold Card (Rating), which offers 4x points when eating. Then I would only give up 1x point per dollar spent, so the breakeven point is more like ~ $ 8,800 per year on food expenses.
The math depends on how much I spend on food
For the average consumer who doesn’t go to great lengths to maximize credit card rewards, I think the combination of the Citi Premier and Citi Double Cash is hard to beat as you earn 2-3x points on all purchases.
I keep thinking about downgrading the Citi Prestige to the Citi Premier, but I can’t quite get the math to work. This is simply because the 5x points when eating at the Citi Prestige really add up and are incrementally worthwhile for me compared to the Citi Premier.
Do you complement the Citi Double Cash with the Citi Premier or the Citi Prestige for others who use it for everyday expenses? How does the math work for you?