The Citi Prestige has been significantly devalued since it’s return to the premium card market in January 2019. But since its inception in 2011, the credit card market, consumers, and Citi themselves have changed. Citi has discontinued and revamped the Prestige Card multiple times in the 2010s. Such actions make it seem that executives do not know what to do with it. Therefore, Citi should discontinue the prestige card… permanently.


Citi Appears to Be Pivoting

Sometimes, businesses must change directions in the way of products, people, or resources. This is called a “pivot”. Citi appears to be pivoting away from the travel card market altogether and the results could be a win-win for both consumers and Citi themselves.

Consumers’ Point of View

The Prestige Card suffered the most casualties after Citi announced that they were dropping the benefits from their cards. Prestige cardholders are going to miss its travel insurances, Price Rewind, and car rental insurance, among other perks. These perks were important because they gave Citi a competitive advantage over other banks. Now, there is no longer any incentive for consumers to use their Citi Prestige instead of another travel card.

Citi’s Point of View

Furthermore, the removal of these benefits its Citi’s fault. That’s because they did not communicate enough about them, according to JD Power. But for Citi, the removal of these benefits means they have less information to communicate about in the first place. That saves them money on customer service, advertising, and the benefits themselves.

Citi appears to be pivoting away from travel cards because the people that use them are less likely to pay interest. Citi wants to be more like Capital One in that they want consumers who will pay them interest and make them money. Earning interest is the lifeblood for America’s big banks because it adds to the bottom line.

Moreover, the credit card landscape itself is ever-changing. Citi had a lot to do with its own negative changes. But competitors such as Chase and American Express have been changing as well. The Chase Sapphire Reserve and any version of the American Express Platinum Card is a better overall product than the Citi Prestige. These three cards are the bulk of the premium card market and each one must be considered by a consumer before they apply. After all, premium cards have annual fees of around $500.


The Citi Premier Is a Viable Alternative

Citi’s own mid-tier card is surprisingly a better alternative than the Prestige in many ways. Discontinuing the Prestige in favor of the Premier would work for both consumers and Citi.

Consumers’ Point of View

Both cards have lots in common, most notably their membership in the Citi Thank You (TY) Points “ecosystem”. However, they are also quite different. For example, the Premier has a $95 annual fee compared to the Prestige’s $495 annual fee. That’s a difference of $400 per year!

The Citi Premier has a larger sign-up bonus, which is also Citi’s largest. The Premier’s bonus is worth 60,000 TY points and has a minimum spend requirement of $4,000. Conversely, the Prestige has a bonus worth 50,000 points with the same minimum spend requirement. The Premier is the better card based on sign-up bonuses alone.

The Premier has more bonus categories than the Prestige. It can be used for everyday purchases and certain travel purchases. The Premier earns 3x points on Airfare, Dining, Gas, Groceries, and Hotel purchases. This earning structure was implemented in phases in 2020, one year after Citi changed the Prestige’s earning structure.

The Prestige earns 5x points on Dining and Airfare and 3x TY points on Cruises and Hotels. While the higher multipliers are nice, they do not work for all travelers. And this earning structure makes the Prestige a terrible credit card for everyday purchases, such as Gas and Groceries. Everyday purchases are extremely important to so many people because of the COVID-19 pandemic. And the Premier is the better card for those purchases.

Citi’s Point of View

For Citi, discontinuing the Prestige Card would save them millions per year in benefits that they would otherwise have to offer. The Fourth Night Free and $250 annual general travel credit are significant perks that Citi would probably discontinue or further limit into the future. This could be for one of two reasons: abuse from a small group of cardholders or Citi wants to save money. The former reason is why Citi has been limiting and removing benefits in the first place. But the latter reason could send these perks the way of the Dodo bird.


Lack of Transfer Partners

Transferrable points cards heavily depend on transfer partners to provide value to consumers. Unfortunately, Citi is doing a poor job at providing a suitable list of partners for their cardholders to transfer points to. Citi has the following partners as of September 10, 2019:

  • Air France / KLM Flying Blue
  • Asia Miles
  • Avianca
  • Etihad
  • Eva Air
  • Jet Airways
  • JetBlue
  • Malaysia Airlines
  • Qantas
  • Qatar
  • Singapore Airlines
  • Thai Airways
  • Turkish Airlines
  • Virgin Atlantic

Most of these partners are international airlines. Citi has no hotel partners and just one domestic partner in Jet Blue. Furthermore, Chase and American Express have a wider range of partners that more travelers could get use out of. Chase has a little bit of hotels, domestic airlines, and international airlines. While Amex specializes in domestic and international airlines. These two issuers are more competitive and successful than Citi because of which partners they have made deals with.


Final Draw

The Citi Prestige Card is a classic “dog” product, according to the Boston Matrix (a tool that compares a product’s market share and growth). That is because its low in both categories given the current credit card market, changing consumers, and Citi themselves. The best strategy for “dog” products is to discontinue them because they are not making the company any money. Instead, “dog” products tie up resources, money, and time where the company could use them elsewhere.

Citi’s executives should use the Boston Matrix (and their MBAs) to make a wise decision in discontinuing the Prestige. It’s a loser for them and a loser for their consumers who are switching to competing premium cards by the day.

Update: As of 2022, Citi has indeed discontinued the Citi Prestige Card…