Citi cuts frequent flyer points on credit cards

Citi customers may end up with a lot less value from their credit card points due to rewards cuts.

Citi has announced that its line of credit cards will undergo some significant changes in early 2016, some of which will be a massive blow for frequent flyer earners. Some of these changes include reduced earning rates and increased Citi Rewards conversion rates for customers earning Qantas, Virgin Australia, Singapore Airlines and Emirates frequent flyer points.

Why have these changes come about? An external interchange rate change means that Citi receives less revenue from individual credit card transactions and can no longer afford such generous rewards.

Here we’ve highlighted some of the changes that will roll out in March and what you can expect if you’re a Citi cardholder.

Citi Rewards

Unfortunately, the way you can earn Citi Rewards has decreased across the board. You can no longer earn points on BPAY payments and Citi’s overseas transaction fees will rise from 3% to 3.4% across all credit cards.

Citi Rewards Signature cardholders will lose out in particular as points on international purchases are lowered from 0.5 Citi Rewards points per AUD$1 to 1.5. Plus, points earned on Australian transactions will be capped after you’ve charged $20,000 - meaning you may lose out on points if you plan to exceed that amount after 18 March 2016.

Compare Citi Credit Cards

Indirect earning: Virgin Australia Velocity and Singapore Airlines Krisflyer

The rate in place when you transfer your Citi Rewards over to Velocity Frequent Flyer points or Singapore Airlines KrisFlyer points will also be slowed if you’re a Citi Prestige card holder. Rather than 1.5 Citi points per Velocity point or KrisFlyer mile, you’ll now have to transfer 2 Citi Rewards points for 1 frequent flyer point.

Frequent flyer program Current points transfer ratePoints transfer rate effective March 2016
Velocity Frequent Flyer 1.5 Citi Rewards points = 1 Velocity point2 Citi Rewards Points per = 1 Velocity point
Singapore Airlines KrisFlyer 1.5 Citi reward Points = 1 KrisFlyer Mile2 Citi rewards Points = 1 KrisFlyer Mile

Note that the minimum transfer is also increasing from 15,000 Citi Rewards Points to 20,000 Citi Reward Points if you wish to transfer your Citi Rewards to a frequent flyer credit card.

Direct earning: Emirates Skywards and Qantas Frequent Flyer

If you have either the direct-earning Emirates Citi World Mastercard or Citi Qantas Signature card, Australian transactions will collect 1 point per dollar in the first month (or until you’ve spent $3,000). This will then lower to 0.5 points per $1 until you reach $10,000, after which your points will be completely capped.

Emirates customers will also earn fewer miles on foreign transactions, with the current 1.5 point per AUD$1 earn rate being replaced by 1.25 points. Rather than collecting 2 points when booking Emirates flights, you’ll now only receive 1.5 points.

Credit card rewards programs can be a massive cost for providers, so it’s no surprise that they take a hit when banks are struggling through difficult times. If you’re a Citi cardholder, make sure to confirm how these changes could affect you and your spending. If you’re unhappy with the changes, you might wish to compare your options to find a card with a more valuable earn rate and rewards program.

Compare Rewards Program Credit Cards here

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Sally McMullen

Sally McMullen is a journalist at finder.com.au who is a credit cards, frequent flyer and travel money expert by day and music maven by night.

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