Citibank Takes on CapitalOne for Control of Frequent Flyers' Wallets

Citibank Takes on CapitalOne for Control of Frequent Flyers' Wallets

What’s in your wallet? If it’s a CapitalOne GoMiles credit card, you might soon want to reconsider.

Citibank has introduced a new and unique line of “mileage-earning” credit cards – the Citi PremierPass, Citi PremierPass-Elite Level, and CitiBusiness PremierPass – that look to directly challenge CapitalOne’s dominance among somewhat frequent flyers.

What is so different about the Citibank cards? Namely, this is the first line of non-airline affiliated credit cards that allow cardholders to earn actual flight miles. That’s right – when a Citibank PremierPass cardholder purchases an airline ticket using his card, he will earn miles for his flight, as well as for the purchase price.

Here’s how it works:

Citibank PremierPass cardholders earn one “ThankYou Purchase Point” for every dollar spent on the card, and one “ThankYou Flight Point” for every three miles flown when airline tickets are purchased on the card – all for no annual fee.

Citibank PremierPass – Elite Level cardholders earn two “ThankYou Select Spend Points” for every dollar spent at supermarkets, drug stores, gas stations, and commuter transportation and parking merchants, one ThankYou Purchase Point for every dollar spent on all other purchases, and one ThankYou Flight Point for every mile flown when tickets are purchased on the card. Annual fee, $75.

CitiBusiness PremierPass cardholders earn three ThankYou Select Spend Points for every dollar spent on business purchases and professional services, one ThankYou Purchase Point on all other purchases, and one ThankYou Flight Point for every mile flown. The business card is fee free for the first year, then $75 annually.

Confused yet? It gets better. All of these ThankYou Points can be added up and used for redemptions from the Citibank catalog; however, ThankYou Flight Points can only be used to pay for half of the redemption cost. For example, if a cardholder wants to redeem her ThankYou Points for a U.S. domestic coach roundtrip, which costs 25,000 points, she could use no more than 12,500 ThankYou Flight Points towards the award – the rest would have to come from ThankYou Purchase or Select Spend Points.

Though the terms can be overwhelming, the program has some real value. Take, for example, a person who in an average year spends $3,500 on airline tickets, $25,000 overall (with approximately a fifth of that spent on groceries, gas, and medicine) and who flies approximately 25,000 miles. This person would earn the following approximate mileage/points amounts on the cards listed below:

Non-airline affiliated cards
Citibank PremierPass ($0 annual fee) = 33,000 points
Citibank PremierPass – Elite Level ($75) = 55,000 points
CapitalOne GoMiles ($19) = 25,000 points

Affiliated cards
United Signature Visa ($60) = 25,000 miles
United Gold Class Visa ($85) = 27,000 miles
Delta American Express ($85) = 37,000 miles

As with other non-airline affiliated credit cards, with the Citibank cards, cardholders do not earn actual miles in a frequent flyer program, but instead earn points in the card’s ThankYou Network, which can be redeemed for flights, hotel stays and assorted merchandise. These ThankYou Points cannot be combined with any airline’s frequent flyer miles, so are useless as far as upgrades and status are concerned.

On the other hand, cardholders do not forfeit their right to earn miles from a frequent flyer program when using the Citibank cards, so in a way it’s like double dipping.

Each of the cards also offers free unlimited companion travel. According to the terms and conditions, cardmembers only have to “purchase a roundtrip coach class excursion fare ticket for $359 or more for travel in low-season and $379 or more for travel in high-season, with a destination in the continental United States. Low-season is defined as September 16-January 14 and high-season is defined as January 15-September 15.”

Leave a Reply

Your email address will not be published. Required fields are marked *