It is standard lobbying practice for any industry about to come under additional regulation from Congress to shout to the press, and whoever else will listen, that any and all proposed regulations or laws of any kind would adversely affect the poor customer. Thus, any additional rules or regulations of any kind on credit card companies would make things worse for credit card customers.

More reading: Citibank Thankyou Points catalog.

Grandstanding aside, while poorly thought out regulations can hamper entire industries and harm customers, many times new government oversight can have a positive affect both on the industry as a whole, and on the experience of customers as well. In the case of recent credit card legislation, the new rules and regulations on banks and credit card issuers were thoroughly debated not just between Republicans and Democrats, but within those parties as well.

Fortunately, the by-product of real debate is often good legislation. Unfortunately, the power of lobbyists can overwhelm good debate when the sides are fractured.

What emerged from Congress in the form of newer, tougher, credit card industry regulation was indeed thoroughly debated, but was it good for customers, or did it, as the industry claimed, hurt ordinary credit card holders?

The general answer to that question remains open. Clouding the issue is the overall tightness of the credit markets, compounded by the nearly overnight end to the traditional way of doing business in the banking and finance industry. If it is harder to get a credit card there is no way of knowing whether that is the result of over-reaching rules issued by Congress, or if it is just that so many financial institutions have shaky balance sheets cluttered with “toxic assets.”

One area that keeps being mentioned in the press that has negatively affected consumers is that credit card reward programs are becoming more stingy. However, little evidence is cited other than the occasional card holder who says that they are getting less value from their credit card mileage or credit card points than they used to. The catch is that many credit card rewards programs were being trimmed before the credit card laws were even passed!

I made note in this personal finance blog that Capital One NoHassle Rewards were less valuable than they were just one year before back in 2008 when I used 10,000 Capital One miles for each $100 gift certificate to major retailers. Nobody can blame credit card laws for that!

Let me know if you see a downward revision in your credit card rewards program. If you have an old rewards catalog, don’t throw it out. Instead, keep it to compare how your rewards change over time, and if a credit card company is screwing you, don’t be afraid to open a new reward credit card or even a cash back credit card and throw that old in the shredder.

The Citibank PremierPass credit cards offers higher point earnings for frequent travelers, but comes with a steep annual fee.  And, most cardholders were recently nailed with a steep increase in interest rate even if they had good credit.  Do the PremierPass pros outweigh the cons?

Earn Points Citi Premier Pass Card

The basic Citibank rewards points earning chart looks like this.

• 2 ThankYou Points earned for ever $1 spent at Grocery Stores, Gas Stations, Drugstores, Parking, and Public Transportation like subways.
• 1 Thank You Point earned for all other $1 spending.
• 1 Thank You Point earned for every mile flown on any airline, including other people whose tickets you bought with the card.

ThankYou Points Redeem Chart

* Since there is no fixed flight option anymore, I tested a couple of flights through the booking system and it appears that tickets are pricing at approximately 100 points per dollar.

Reward Value is average unless you maximize shopping at the 2 for 1 points locations.

Thank You Points Earned For Flying

Of course, the value of this particular card is not in its spending rewards which are mostly average, but rather in the value of getting ThankYou Points for flying on any airline.

If you few from Denver to Chicago, that is 903 miles, or 903 points earned for flying.  A round-trip ticket makes it 1806.

If you make that trip one a month for a whole year that is 21,672 ThankYou points, enough for a $210 plane ticket, and that is without using any of your points earned without flying.  In this case, the $210 reward will cover the $75 annual fee.

To put it another way, you have to fly at least 7,500 miles per year to cover the cost of the annual fee and turn this credit card from a money loser into a break-even rewards card.

Update: How to use Citibank rewards points for free thank you miles flights.

Citibank Rewards Cons

Citibank ThankYou Rewards recently ended their fixed point option for flight ticket rewards, so budgeting the points is now tougher.  In order to find out how much a flight costs, you have to log into Expedia via the ThankYou Points website and enter flight information like you were going to buy a plane ticket online through Expedia.  What you get back are trip prices in points instead of dollars.

The major drawback of this process is that the online travel agencies are well known for a scam which involves changing the price at the last minute before you buy a ticket.  They get away with this by saying that the system you are looking at is just the reservation system and that it might not be up to date.  Only when you enter your credit card information does it check the real system that has the actual fare you have to pay.  So, the price can suddenly go up once you try and actually book the airfare.

For rewards this is particularly unpleasant because after you’ve carefully crafted a travel plan that allows you to use your points for a vacation for 2 to Hawaii, you’ll suddenly be informed that the flight is going to cost you 44,000 points instead of 38,000 points.  Multiply that across 2 tickets and you can see how big of difference there is between 88,000 points and 76,000 points.

Annual FEE and Expenses

$75 annual fee is terrible on virtually all credit cards, but frequent travelers might make it up with this card.

Interest rate is quoted as 13.24% Variable, but many customers with 740+ credit scores reported getting their rate increased without cause to over 16%, so beware about the Citibank credit card interest rate quotes.

Is Citi PremierPass Credit Card Worth It?

The answer for all credit cards with an annual fee is NO.  In this case, there can be some value here but only if you travel a lot.  The extra 1 point per mile flown can add up quickly for frequent travelers.

Difference Between Citi PremierPass and Citi PremierPass Elite

There is a Citi PremierPass basic card (non-Elite).  It has no annual fee, but is a basic, no frills, reward card with a standard 1 point for $1 point earning schedule.  You do get 1 point for every 3 miles you fly on tickets you buy with the card, but that won’t add up to much unless you fly a lot, in which case you are going to be better off with the Elite card.

Find a more robust card if you aren’t going to go for the elite level on this one.

Check out more detailed credit card reviews here on Finance Gourmet.

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So, after Citibank decided to screw over its customers by raising interest rates on credit card accounts of good customers (yours truly has a 776 credit score – as of yesterday) it has also decided to make a change to its Thank You Network which is the rewards program for its credit cards.

According to an email received this week, the fixed flight option will no longer be available as of March 1st. 

Quick Summary

• Before 3/1/09 – Great deal for flights between $200 and $400 (the closer to $400 the better the deal).  Still a good deal for flights over $400.
• After 3/1/09 – Deal Gone.  You pay 100 points per dollar.  Average travel reward at best.

Fixed Point Travel Flight Option

What does that mean for Citibank credit card holders?  A worse deal.

Until 3/1/09 you can get a domestic flight reward on “virtually any airline” for 20,000 ThankYou Points, up to $400.  If the ticket is more than $400 then it is 5,000 points for every $50.

That works out to 50 points per dollar for a $400 flight and then 100 points per dollar after.  That, of course, only works at exactly $400, but any flight over $200 costs you less than 100 points per dollar.

Even if you go over $400, you are still getting a good deal because that first $400 comes at what is essentially a 50% discount.

Variable ThankYou Point Flight Rewards

Starting on March 1, 2009, the “variable” rewards cost kicks in a 100 points per dollar.  That’s it.  No discount, no “deal”.  Just the same old regular everyone has the exact same thing 100 points for $1 travel reward.

Citibank ThankYou Rewards Variable Flight Pricing Denver to Miami

The exact same flights by going directly to Expedia.com (instead of through ThankYou Network)

Advice?

What was once a pretty solid rewards program has been mercilessly dragged back to average town.  There is nothing wrong with the ThankYou Rewards program, but there is nothing special about it either.

With Citibank giving the shaft to long-term customers by hiking interest rates on customers with good histories at the same time interest rates are falling in the real world, it is starting to seem more and more like Citibank will be ignoring its loyal customers to focus on the bottom line.

My advice is to use your rewards as soon as possible if you have a need coming up.  Then, start over and re-evaluate your options.  There may be a card that fits you better.  But, DO NOT CANCEL your Citibank card until you have the new one in hand.  The credit world has gone bonkers so it is possible that even a high credit score and high salary won’t result in an approval.

Today, I got a notice in the mail regarding my Citibank credit card.  Mind you, I chose this card a few years ago because of how its travel rewards worked.  It paid off.  We went to Hawaii this year.  Combined with some hotel reward points, three plane tickets and a week in a nice resort hotel were all free.  It was a great vacation.

However, I will be cancelling my Citibank card on Monday.  Good thing we used up most of the points on the vacation.

My notice says that with interest rates plummeting over the last year and with banks and financial institutions all over the country struggling to find and keep good customers who have strong credit and pay their bills on time, Citibank will be RAISING the interest rate on my credit card.

Frankly, given the state of the economy and the fact that I get a dozen credit card offers a week despite having opted out of everything we can, it is insulting to have ANY rate increase at all.  But, Citibank decided to make it so insulting that all their financially savvy customers will be cancelling their cards as well.

The new rate, if you are wondering, will be Prime + 10.99%.  I have credit cards with interest rates lower than the plus part of the new rate, let alone the rest of it.  16.99% is the kind of rate people with “not so good” of credit pay.  So, Citibank and I part ways next week.  I guess the billions of dollars the government will be giving them means that they don’t really need to keep their good customers anymore.

One of the toughest things about comparing all the different rewards credit cards out there is that the credit card companies aren’t very good about showing you what your points can buy until AFTER you sign up. Go ahead, try and find the rewards catalog for a reward credit card without logging into the site.

Most reward programs sound the same. Earn 1 point for every $1 you spend with some specials here and there thrown in to maybe give you more points at grocery stores, gas stations or elsewhere. The catch though is that it doesn’t matter how many points you earn, what matters is what you can get with those points. Remember Chuck e Cheese and Showbiz Pizza? 10,000 tickets gets you an 8″ stuffed animal. What do 10,000 points get you from your credit card?

Less than two years ago I used 40,000 points on my Capital One Miles Reward card to get $400 worth of gift certificates to Baby’s R Us. I pretty much furnished the nursery for free. It was a great deal. I logged in at Christmas time this year (2007) looking to do the same for a pregnant friend. Imagine my shock when I found out that the rate was now 18,000 points for a $100 gift card, not 10,000. That is nowhere near as sweet of a deal. In fact, I’m looking for a new card to replace this one. But, look at the big splashy front page and all the comparison sites out there and all you’ll see is that $1 gives you 1 point.

So, in hopes of helping everyone, I am collecting rewards point catalogs from all credit card companies. I’ll try and get as many as I can, but I just explained how they can be hard to get, so I’m asking for your help. Download your rewards catalog, or scan the one they sent you in the mail and email it to me at thegourmet@financegourmet .com I’ll turn them into pdf files and we’ll get a catalog going here that anyone can use. Don’t worry, if there is any identifiable information on it, I’ll black it out before it gets posted.