Which Is Better For American Flyers: Citi Premier Or Chase Sapphire Preferred?

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Reader jlocke asked the following in the “Ask Lucky” forum:

I recently took advantage of the Citi ThankYou® Premier Card sign up bonus for 50K and will consider another credit card in the future. However their airline partners are limited from my hometown airport of Pittsburgh. I fly AA the majority of the time and have 250K + miles. I assume that I should get the Chase Sapphire Preferred® Card credit card since BA is one of its airline partners. This will allow me to utilize the AVIOS short segment sweet spot on the American Airline routes that service my hometown airport. Are my general thoughts/assumptions correct?

It’s a great question, so let’s unbundle it a bit…

The Citi ThankYou® Premier Card isn’t great for American flyers (as such)

I have (and love) the Citi ThankYou® Premier Card:

  • It offers a sign-up bonus of 50,000 bonus ThankYou Points after $4,000 in purchases within the first 3 months of account opening
  • The annual fee is waived the first year, and $95 per year thereafter
  • The card offers fantastic bonus categories, including 3x points on travel and gas, 2x points on dining out and entertainment
  • The card has no foreign transaction fees

It’s a card which is competitive with the Chase Sapphire Preferred® Card and the American Express® Premier Rewards Gold Card, which is exciting.

That being said, in and of itself it’s not especially useful for an American flyer. That’s because:

  • Citi ThankYou isn’t transfer partners with American AAdvantage or any other program which is especially “efficient” for travel on American
  • You can, however, redeem each point for 1.25 cents each towards the cost of a ticket on American, or any other airline, for that matter; when you factor in the bonus categories that could be a good deal, though I think you can still do better than that

The Citi Prestige® Card improves the value proposition

The Citi Prestige® Card is the “premium” card which accrues ThankYou points, though it can increase the value proposition of all your ThankYou points in an important way. Specifically, if you have the Prestige Card then each point can be redeemed for 1.6 cents towards the cost of a ticket on American.

You could transfer your points from the Premier Card to the Prestige Card as well, so all the points could be redeemed at that price. Given the bonus categories, that’s potentially an incredible value. After all, you’d be getting a return of ~4.8% on travel and gas purchases on the Premier Card, for example.

So while they’re not miles you can use towards travel on American, they can help you book paid travel on American, which can earn you elite qualifying and redeemable miles, status, etc.

The Citi Prestige® Card does have a $450 annual fee, though has so many perks which help offset that fee, including a huge sign-up bonus, a $250 annual airline credit (with your first year’s annual fee you actually get two of those — that’s $500 of airline credits with your first year’s $450 annual fee), access to American Admirals Clubsa fourth night free hotel benefitthe most comprehensive Priority Pass membership offered by any card, and a $100 Global Entry fee credit

Is the Chase Sapphire Preferred® Card a good alternative?

The Chase Sapphire Preferred Card is one of the all around best travel credit cards out there. It offers 2x points on dining and travel. On the surface those bonus categories aren’t quite as good as on the Citi ThankYou Premier, given that it offers 3x points on travel and on gas as well.

That being said, the points can be transferred to British Airways Executive Club, which is one of the most useful programs for shorthaul award travel on American. Furthermore, the points transfer ratio is 1:1, and I suspect it will stay that way, given that the relationship between British Airways and Chase is strong, since Chase issues the British Airways Visa Signature® Card.

American-Plane

If the goal is to earn British Airways Avios…

If the goal as an American flyer is to earn more British Airways Avios, is there a better alternative?

Specifically the Amex EveryDay® Preferred Credit Card accrues Membership Rewards points which can also be converted into British Airways Avios. Furthermore, for some kinds of spending profiles, the card offers an incredible return on spend:

  • Earn 3x points at U.S. supermarkets on up to $6,000 per year in purchases (then 1x)
  • Earn 2x points at U.S. gas stations
  • Earn 1x points on other purchases
  • Use your card 30 or more times on purchases in a billing period and get 50% more points on those purchases less returns and credits

So with 30 transactions per billing cycle, you’re earning a minimum of 1.5 Membership Rewards points per dollar spent, which is a pretty awesome rate of return.

There are two important things to note when it comes to converting Membership Rewards points into British Airways Avios:

  • Historically, Membership Rewards sometimes has transfer ratios when converting points into Avios, though they’ve become rarer in the past (for what it’s worth, I don’t recall ever seeing such a transfer bonus from Chase Ultimate Rewards)
  • As of October 1, 2015, the transfer ratio from Membership Rewards to British Airways will be devalued from the current 1,000:1,000 to 1,000:800; it remains to be seen what the overall impact is when you weigh that with the transfer bonuses

Executive-Club-Transfer-Rati

Bottom line

I think jlocke has the right general approach towards credit cards when it comes to being an American flyer living in Pittsburgh. To sum up my advice:

  • As an American flyer, I think the Citi ThankYou® Premier Card only makes sense for everyday spend if you have it in conjunction with the Citi Prestige® Card, which is an awesome card for American flyers; having a card which has great bonus categories and points which can be redeemed for 1.6 cents towards travel on American is quite valuable
  • If you get a ton of value out of shorthaul Avios awards on American (which is perfectly reasonable, given how expensive many shorthaul tickets are), either the Chase Sapphire Preferred® Card or the Amex EveryDay® Preferred Credit Card makes sense, depending on your spend profile
  • Even if you are an American flyer, keep in mind there are plenty of other ways to redeem miles for travel that doesn’t include American — there are plenty of great non-US carriers out there that you can redeem miles on at an efficient rate, and that’s something which isn’t to be overlooked

Which card would you be using if you were in jlocke‘s shoes?

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Comments

  1. Hi Lucky, I recently signed up for a Citi® / AAdvantage® Platinum Select® World Mastercard with similar incentives to the Citi ThankYou® Premier Card. Did I get a good card? Thanks!

  2. im sorry but I find this post a little intellectually lazy. Doesn’t Citi TY have like four OneWorld partners as well as Etihad? Do none of them offer a 25K RT domestic redemption on AA? I know Avios are great with the 9K, 15K, and 20K round trips but if you’re able to do a lot of 3x earning with Citi, then a 25K redemption might get you there just as fast. Especially if you would have spent +$400 on the ticket. Certainly ex-SFO on AA, the short hauls are not in abundance..

  3. You have been promoting the Amex EveryDay Preferred card a lot recently (and rightfully so), but I think it is important to note that you can’t transfer the Membership Rewards points from the card to any of the frequently flyer programs unless you also have a Platinum, Gold, or Green Amex as well.

  4. Lucky, I’m surprised you didn’t mention lounge access on day of travel on the Prestige. Avios short-haul redemptions are useful, but still secondary to lounges IMO. (Of course, Prestige wasn’t in the original poster’s question.)

    @Chris M.: thanks for mentioning this. I’ve never seen this mentioned anywhere – I’m glad (and lucky) I ended up going with the Amex Gold when retiring my Platinum card.

  5. Ben, thanks for the background information and the further explanation that if one has both the Premier and the Prestige card, the former’s points can be used at the latter’s conversion when purchasing AA tix.

    Here is my question — I know from your previous articles that a spouse having a Chase Freedom card can pool her Ultimate Rewards points with her significant other’s Chase Sapphire card’s UR points so they both can be used/redeemed fro UR transfers.

    Can a like scenario occur when one spouse has the Citi Premier Card and the other the Citi Prestige card?

    Can the Premier card’s Thank You points earn a higher redemption rate if a spouse has the Citi Prestige card, or can the higher earning rate occur only when the same individual has BOTH cards?

    Thanx!

  6. CHRIS M is absolutely incorrect. I never had a MR account but once I opened up my plain Jane AMEX Everyday Card account and hit the threshold spend, I had 10,000 + MR points. I used some of these to transfer to my Iberia account so that I could eventually transfer BA Avios to the Iberia account should I wish to fly transatlantic on IB at better business class off-peak redemption with lower fuel surcharges than what is offered on BA. In a nutshell, he does not know what he is talking about.

    He is likely confusing the fact that if your don’t have a Premium UR earning card, you can’t transfer Freedom earned UR points to the UR transfer partners, but there is no restriction on the AMEX Everyday or Preferred Everyday Card.

  7. Maybe I’m a bit greedy but these returns are terrible. $0.015 / dollar with an Amex? Seriously? I would do like this:

    – put all your travel (flight and hotel) expenses on your Citi Prestige card, be a Citigold customer, redeem your points for AA and earn more than $0.05 / dollar (5%)
    – put all your dining expenses to your Citi Prestige card and earn more than $0.035 / dollar (3.5%)
    – put everything else to your BofA Travel Rewards, enroll to the preferred rewards scheme and earn up to $0.02675 / dollar (2.675%)

    Your effective return should be no less than 3.5%.

    I can’t believe Amex is that terrible when it comes to rewards considering that they charge a lot more to the merchants and their cards comes with a hefty annual fee.

  8. @Chris M. – “you can’t transfer the Membership Rewards points from the card to any of the frequently flyer programs unless you also have a Platinum, Gold, or Green Amex as well.”

    Do you have a source for this? The American Express website explicitly says that the Everyday & Everyday Preferred cards can transfer points to FF programs. It says nothing about either card, either in the main description or the T&Cs, having this restriction.

  9. Wow, @31583 wins not just my Best Post of the Day prize but, really, the Best Post of the Week. And no humor, either; just pure substantive gold.

    I would just add that the Citi Gold account has a $50K minimum and that the 2.6% cash back on the B of A card requires a $100K BofA/Merrill account. I have both accounts, but I still need to sign up for the B of A card — which is still on my “to do” list. That card gets mighty little play on the blogs . . . because not everyone wants to, or can, set up the account.

    There are some mistakes in the post (typo of “ratio” for “bonus” and isn’t the Premier good for 1.3% AA/US tickets, assuming no Prestige, or am I just wrong?) and in the comments (Everyday points most assuredly ARE transferable!), but I’ll let others deal with that.

  10. I would run with (as I plan to next app round) with both the Citi Premier and Prestige. I purchase a lot of fuel so I have the Premier card already. Next I will get the Prestige for the AA tix, lounges, golf and 4th night free hotel programs. The fees are high for both cards but benefits are well worth it! Chase can go fly a kite for cutting the CSP program and AMEX fell short long ago…

  11. @Chris M — that’s simply not true. You can use the Everyday or everyday preferred without any of the charge cards for membership rewards and be able to transfer them to airlines. I personally had the everyday card and no other charge card, still earned membership rewards and still transferred those points to airline partners. Don’t spread information if you’re not correct about it.

  12. @mark

    Yes you can transfer to your spouse who has the prestige and get the higher rates..(you can transfer to anyone I believe not just spouses). You just have to use the points within 60 days I believe…so only do it when you are ready to book and don’t transfer too many points.

  13. @Jay and Brian L – Looks like I’m wrong. Amex needs to update their comparison page. Apologies.

    @Lucky – Feel free to delete my first comment.

  14. @ MARK O — Thank you very much!

    @ Chris M — Honest mistake and your resort to source material was absolutely appropriate! The fault lies with AMEX, and not you!!!

    Shame on AMEX for not promoting that, but I think there is a reason why!

    There no longer is any need for someone to slavishly keep paying for AMEX cards that have Membership Rewards points just to keep your account alive until you decide to redeem them! Now, with the Everyday card (or the Everyday Preferred if you wish to pay a fee) you can keep those MR points still in existence that you have earned from having a prior Platinum, Gold or Green AMEX card.

    Therefore, if you are dissatisfied with the AMEX MR program as it is now constituted (as I certainly am!) in that there are only 2 major US programs participating = Delta SkyMiles (Airline) & HHonors (Hotel) and each of the foregoing are the least valuable in each of their respective category (Yes, I know that SPG is a transfer partner, but at a 3:1 transfer rate, that really sucks, it really is a non-participant in my book), the MR program is but a shell of what it once was.

    Better to go with Chase UR or Citi Thank You, IMHO, hence one of my questions, above!

  15. @ 31583 you’re a bit wrong as well —

    Lucky is proposing earning 1.5 MR per dollar. At 1.8 cents each (and with Avios, etc., that’s a more than fair valuation), he’s proposing 2.7% per dollar. Beats BofA, although with a lot more hassle.

  16. @Tom : Thanks! Yes, both Citigold and BofA Preferred Rewards has some balance requirements but if you qualify then there’s no better way to accumulate points. The Citi Prestige Card earns 3 points per dollar on travel plus a 15% bonus for Citigold customers (25% bonus for private clients). Then you can redeem your points for 1.3 cents each towards any flight ticket or for 1.6 cents each towards an AA ticket (code-share flights with BA for instance are allowed). The effective return rate if you redeem with AA is more than 5.5%!

    @stvr There are pros and cons. If you choose to earn ff miles then there’s the hassle to find an award ticket which is almost impossible for most routes especially in my case because I use my miles to book tickets for three other persons at the same time. Finding three business class seats on a transatlantic flight is almost impossible. If you choose to earn “cash-back” miles with the BofA Travel Rewards, Barclays Arrival Plus, Capital One Venture or Citi Prestige then you may have to spend a bit more to book a ticket but there are no restrictions. As long as there’s a seat you can book it plus you also earn ff miles because it qualifies as a paid-ticket.

    Btw, don’t you have any idea how to do it better? My family travels from London (LHR). Would it worth to earn ff miles instead? As far as I know based on what I hear and see here on Lucky’s blog it’s almost impossible to find 3 business class seats on the same flight from LHR to JFK, SYD, SIN, BKK, HKG, LAX or DXB.

  17. @ MARK O or anyone else — How does one designate/use the now co-mingled Thank You points in your spouse’s Prestige account within the 60 day time-frame?

    Don’t all Thank You points appear to be the same?

    How does one differentiate the points that need to be used within 60 days (or what happens to them???) to those that have been sitting there?

    Many thanks!

  18. @31583, you are being disingenuous by comparing bonus category with prestige (a much more expensive card) with everyday spend on the everyday preferred. You compare the best category on the prestige (travel), so compare it to the best category for everyday preferred (groceries, 4.5 points per dollar). 4.5 points per dollar, conservatively 1.8 cents per dollar, 8.1% return. Or conversely, on unbonused spend, 1.6% for prestige, 2.7% for everyday preferred. You can argue that prestige is better for the other benefits or purely for travel, but not for most kinds of spend.

  19. @Farnorthtrader: You’re wrong and you misunderstood the whole comment. However if you want like this then here is a further explanation:

    So lets compare two “luxury cards” since the Citi Prestige is the high-end card from Citi. Compare it with Amex Platinum. Both comes with concierge, insurance and the usual perks. However when it comes to rewards the Amex is just terribly bad. Why? Because of the funny 1 point / dollar. Oh and why do you think that MR points worth 1.8 cents each? I know… because Lucky said that. I guess you should know that I don’t agree with Ben’s valuation, simply because it’s not accurate.

    Now we have just compared two high-end cards and Citi wins. Lets compare your favorite every day preferred Amex with the Citi Thank You Premier card. Citi’s card earn as much as 3 points / dollar without limitations without bonuses. Amex earns 3 points / dollar up to only $6,000 per year (is this a joke?). Amex does have a 3% foreign transaction fee, Citi doesn’t. Citi earns 3 points / dollar on gas, flights, taxi, hotel, train, etc., 2 points / dollar on dining and entertainment and 1 point / dollar on everything else. Amex is just 1 point / dollar after $6k… Yes, you can receive a 50% bonus if you swipe your card more than 30 times a month. Another idiot restriction… Both with $95 annual fee however with Citi the first year is free.

    Come on…. it’s a joke.

  20. @ 31583 — That’s true if you’re redeeming points as cash towards the cost of an airline ticket, but that’s not the best use of AmEx points. Instead you’ll want to transfer them to an airline partner if possible for much greater value.

  21. @ MARK — You should be able to transfer points from one spouses Citi Premier Card to the other spouse’s Citi Prestige Card.

  22. @ BigDaddyJ — Yeah, Citi Prestige is probably a whole different topic, as I agree it’s an incredibly valuable benefit.

  23. @ Jeff — While it has a good sign-up bonus, personally I think the Citi Premier Card is much more rewarding for everyday spend, so I’d consider it.

  24. Hi Ben,

    Would you consider doing a post on good specific redemption values among the Thank You point airline transfer partners – like using 30K Krisflyer miles for United F from east coast to Hawaii? I remember you talking about that value a few months ago, and it would be nice to have all of them together as a single reference.

    Thanks!

  25. I think 31583’s point, or one of them anyway, is that the Prestige’s “cash” 1.6x redemption option is great specifically because you’re getting tickets with no capacity controls. Miles are great, as Ben and everyone else points out, but if you’re a family oftentimes “great” in theory works out to “no space/no can do” in actual real-world practice. And, yes, success is still possible — otherwise Ben’s points booking service wouldn’t exist! — but not without time and effort and indirect routings. Sometimes life is just too short. Stated more simply, not everyone is single, has an infinitely flexible schedule, and a lot of time to screw with this stuff.

    On the flip side, earning points at 3x with no $6K ceiling matters.

    As was already stated, a 25% bonus on top of everything else for a private account is pretty good, too (which is my actual situation).

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