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Credit Cards

Citibank adds Turkish Airlines as a transfer partner…and something fishy is going on

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I was tipped off by Louis that Turkish Airlines Miles and Smiles has been added as a transfer partner for Citibank, and there’s something funny afoot.

If you use the Citibank Rewards card, you’ll know that points transfers are typically in blocks of 25,000 Thank You points= 10,000 miles (as you see below with Royal Orchid Plus). But look at TK- 10,000 points= 10,000 miles!

Now I’m pretty certain this is a bug because when you try to redeem Premiermiles, you get a rate of 10,000 Premiermiles= 10,000 TK miles

But it says very clearly in black and white on the Thank You points portal that 10,000 Thank You points= 10,000 TK miles. And I’d feel pretty confident about getting Citibank to honor that, given that it’s stated in black and white when you click through

Here’s TK’s award chart. Singapore is part of the Far East region.

Here are some sample one-way prices in business/first class from Singapore

  • To Europe: 45,000/67,500
  • To North America: 67,500/100,000
  • To Far East (including Japan): 35,000/55,000

I’ve not played around enough with the TK award engine to know how good space is, but it appears you can only book TK awards online. I believe you need to call in to book Star Alliance partner tickets

I was really tempted to give this a shot and called up the hotline to get them to pool my ThankYou points together (I have 47K on the Visa rewards card and 3K on the Mastercard) before transferring. Unfortunately, Citibank’s CSO told me there is no way to combine points across different credit cards, even if they’re both earning Thank You points. He mentioned that it used to be possible but they’ve since been instructed not to. (This is another article for another time, but it is infuriating that Citibank has two rewards currencies (Premiermiles and Thank You points) does not pool points even among similar currencies (eg Citibank Prestige / Citibank Rewards). There is no logical reason for refusing to do so, other than being customer unfriendly)

I’ve not quite decided what I want to do- it is mighty tempting to transfer over 40,000 Thank You points to 40,000 miles and redeem a one-way business class ticket to Japan for what is essentially 16,000 miles opportunity cost (40,000*2/5; I only need 35,000 miles but I must transfer in intervals of 10,000 which means I’m going to waste 5000 if I do this), but I’m still on the fence about this.

In the meantime, I wanted to alert the rest of you about it so you can decide whether you want to gamble with Citibank honoring this. Like I said, it’d be hard for them to argue otherwise given that the rate is printed in black and white, but still…

Credit Cards

Beware of Citibank’s awful Pay with Points program

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At long last, I took the plunge and invested in a proper camera because none of you Philistines can appreciate the flawed beauty of Blackberry camera photos.

Image result for sony alpha a5000
it’s not the photographer, it’s the camera…

This baby is currently on the way from Qoo10 and should reach me just in time for my upcoming Japan trip at the end of the month (JAL 767 J, SQ 77W old F and hopefully much better photos of the Oneworld lounges in T1 coming your way!)

I paid for the camera with my Citibank Rewards card because it earns me 10X points (4 mpd) on online shopping, including Qoo10. A few minutes after I finished the transaction on Qoo10, I got this SMS from Citibank

Clicking the link brought me to this page

Citibank was offering me the chance to burn my 43,709 Thank You points in exchange for S$104.07 off my transaction, based on their valuation shown below

The following merchants are eligible for this program.

Remember that 5 Citibank points= 2 airline miles, so you’re either giving up 168 miles per $1 of value (if you pay with ThankYou points) or 140 miles per $1 of value (if you pay with Citimiles. For whatever reason, only Citibank Premermiles Visa cardholders can participate. AMEX cardholders can’t. No loss for you guys, I assure you).

Recall the value of a mile. I don’t need to tell you that both options are terrible, terrible value. You get 0.60/0.71 cents per mile depending on whether you redeem ThankYou points or Citimiles, and both are valuations you should stay far, far away from. Even if you choose SQ’s much maligned Pay with Miles option you get roughly 1 cent per mile.

The only possible exception I could think is if you have expiring points/miles and are below the threshold needed to transfer them out to an airline loyalty program. You can read the full T&C of the Pay with Points program here (they left track changes on, “lol” as the young people say)

We know that Citibank has been progressively moving towards a revenue-based program for their points, at least on the redemption side. This trend was started with the relaunched Citibank ThankYou portal back in January where they tested out a variety of options (and redemption values). My guess is they’re trying to see what threshold people will accept in Singapore.

I don’t know what the answer is to that, but I do know that it’s much more than what’s on offer with this Pay with Points program. So if you get the SMS, do yourself a favor and ignore it.

Credit Cards

Citibank increases minimum points/miles redemption to 10,000

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Continuing with variations on a theme…

ALEXANDER TERRIBLE HORRIBLE.jpg

Citibank is revising the T&C of their rewards program effective 30 March 2017 to increase the minimum number of points that need to be transferred. The screen capture below says it all really.

I’ve got mixed feelings about Citibank. They don’t pool your points together (people have reported getting CSOs to combine ThankYou points from different cards but have been less successful getting ThankYou points combined with Premiermiles) which means you need to pay two redemption fees to redeem points from two different cards.

However, they made up for that a little bit with their flexibility. You could transfer a minimum of 500 miles/points to an airline frequent flyer program, making it a great rewards program to use if you just needed to top up your account a little bit but wanted to put the rest of your miles elsewhere (and didn’t mind paying a one time S$25 fee for that privilege)

Now that the minimum transfer amount is 10,000 miles, you lose that nimbleness. That said, Citibank does have some of the most useful partners of any Singapore bank. In addition to the usual Asia Miles and Krisflyer, you can transfer to Thai, Delta, MAS, BA, Etihad, EVA and of course, everyone’s favourite Indonesian airline Garuda.

With this change, the minimum cashout amounts by bank are as follows

  • DBS- 10,000 miles
  • UOB- 10,000 miles
  • Citibank- 10,000 miles
  • HSBC- 2,000 miles
  • ANZ- 2,000 (Asiamiles), 5,000 (Krisflyer)
  • OCBC- 10,000 miles
  • Maybank- 2,000 miles

I’m generally ambivalent about minimum transfer amounts and transfer fees because I’m in the habit of cashing out a large chunk at one go, which makes the fees more of a rounding error in the grand scheme of things. But it does seem that banks are moving towards less flexibility (see DBS’s switch from an unlimited transfer model to a per transfer model)

Credit Cards

What you should and shouldn’t be doing with your Citibank ThankYou points

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Citibank recently relaunched their rewards points program in Singapore to bring it in line with the rest of the world.

The revised rewards program is called ThankYou and features one of the largest rewards catalogs of any Singapore bank.

My biggest gripe with Citibank is that their system doesn’t pool your card rewards points by default. This means that if you have a Citibank Rewards Visa, a Citibank Rewards Mastercard and a Citibank Premiermiles card, you’ll end up having 3 separate points balances, as I do.

3 separate points balances means 3 separate conversion fees when you want to transfer your points to miles. I know some people say you can call in and ask the CSO to pool your points before transferring, thereby paying only one conversion fee. However

  • You can only pool together Thank You points. Premiermiles cannot be grouped together with Thank You points when making a redemption. In other words, you can pool Citibank Rewards Visa and Citibank Prestige, for example, but you couldn’t pool Citibank Prestige and Citibank Premiermiles
  • I’ve heard mixed reports of success in getting the CSO to agree to the pooling, so YMMV

I don’t think it’s technically very difficult to get the system to pool points into one balance (or, in the case of the Citibank Premiermiles card, changing the earning structure so the Premiermiles earns Thank You points, in the same way that all DBS cards (Altitude included) earn DBS points). Therefore the fact that the system is designed this way suggest a deliberate choice, which is very customer-unfriendly.

If you can live with that, Citibank offers you many, many options to spend your ThankYou points. You could redeem your points for

  • Merchandise (like electronics, bags, home appliances)
  • Vouchers and cash
  • Travel (flights, hotels, car rentals)
  • Airline and hotel points
  • Instant rewards

Of course, just because you can doesn’t mean you should. It all boils down to what value you’re getting per point. The topic came to mind because a Citibank advert popped up in my Facebook feed advertising a special promotion for redeeming Citi ThankYou Rewards points. From now till 31 March 2017, you can use your Citibank points to redeem hotels or airline stays for 8% less.

I realise this has the potential to confuse people. It doesn’t mean you get a bonus when you transfer your Citibank points to Krisflyer, Asiamiles et al. It means you get 8% off when you use your Thank You points as currency for buying revenue tickets

Still confused? Read on.

What baseline value should you expect for your points?

A good starting point when we analyze the various redemption options that Citibank has on its ThankYou portal is to think about what value we’d get if we ignored all that noise and just redeemed our points for miles.

Citibank has the longest list of airline transfer partners of any bank in Singapore. Your points transfer at the rate of 5 points= 2 miles for

  • Singapore Airlines
  • Qatar
  • Malaysia Airlines
  • Thai Airways
  • Qantas
  • Cathay
  • British Airways
  • Delta
  • Etihad
  • Air France/KLM
  • Garuda (hahahahahahahahaah)

Obviously, 1 Krisflyer mile <> 1 Delta Mile <> 1 Etihad Mile. So our valuation here will depend on what we convert our Citibank points to.  Here I’m going to defer to Lucky’s valuation of miles and points. He doesn’t list all of the airlines that Citibank transfers to, but based on his chart Krisflyer miles are the highest value transfer option at 1.5 US cents (2.16 Singapore cents) per mile.

My thought process on how to value miles has evolved a lot over the past year- I definitely don’t think that Krisflyer miles are worth 4-5 cents anymore (and there’s a good slide on the presentation I made in December on why theoretical value <> actual value). My current valuation hovers between 2 and 3 cents.  But anyway, if we take 2.16 cents as the “right” value, then 1 TY point= 0.4 miles = 0.86 cents

This is the value we should mentally anchor ourselves to when analysing the different options

[Note: for the purposes of this article, I’m going to be referring to Citibank’s pricing in terms of Thank You points. If you have a Premiermiles card, you will still see exactly the same portal and redemption options, but your pricing will appear in terms of Premermiles points instead of Thank You points. My calculations tells me that Citibank reliably uses the valuation of 1 Premiermile= 2.7 Thank You points]

Travel (0.42 cents per point)

This category confuses a lot of newbies because they confuse it with points transfer. It doesn’t help that Citibank puts Points Transfer as an option under travel either.

But redeeming your points for travel is not the same as redeeming your points for points transfers. What is going on is that Citibank partners with a 3rd party agency called Connexion Loyalty, which works pretty much like any other OTA (online travel agent- think Hotels.com, Expedia etc). Connexion Loyalty has a search engine that lets you look for flights, hotels or car rentals, in the same way you would using any traditional online booking engine.

The difference is that Connexion Loyalty takes those revenue prices and converts them into the bank’s proprietary currency (in this case Thank You points) based on some internal valuation metric. I’ve found that metric to be 0.42 cents per point.

You can use the booking engine to book air tickets, for example. I’ve checked the prices that the Connexion portal pulls and they’re at least on par with those I find on Kayak. That’s good, because it’d be a double whammy if they gave you a lower value on your points + charged you higher prices (ahem Krisshop’s pay with miles option ahem). But the valuation of 0.42 cents is only half of what you’d get if you converted your miles to a frequent flyer program. You could argue that when you redeem your miles with Citibank, you’re at least guaranteeing availability (because your points are used to buy revenue tickets), whereas if you transferred your points to an airline FFP you might not be able to find award space. That’s fair enough, but in my mind it certainly doesn’t warrant taking a 50% haircut on value.

You can book hotel rooms through the ThankYou portal as well, getting the same value as you would for flights. I didn’t check these values against what you’d find on 3rd party OTAs, so if you’re even considering this you owe it to yourself to find out if the same rooms are available elsewhere cheaper (or if any OTAs are running special credit card tip up promotions)

Remember that 8% discount I was talking about at the start of the article? Citibank is offering 8% off the number of miles needed to book hotels or flights through its ThankYou portal for the first 1,800 customers who enter the code SGAIR8 or HOTELS at checkout. That boosts your value per point to a whopping 0.45 cents. You’ll excuse me for not jumping on this.

You aren’t limited to just flights and hotels, of course. You could even buy tickets to activities to do at your destination. If spending 2,540 points on a 7D motion ride at Suntec City mall floats your boat, more power to you. Excuse me for finding this just a little bit cynical as I imagine Connexion earns some sort of commission on these sales while still charging you the regular walk up rates you’d pay at these attractions anyway. You’d be much better off buying the tickets yourself.

Vouchers and Cash (0.28-0.34 cents)

Your Citibank points can be used to redeem a cash rebate on your credit card statement in denominations of

  • S$10 rebate-  3,600 points
  • S$20 rebate- 7,200 points
  • S$50 rebate- 18,000 points

There’s no scaling effect here. Your points are valued at 0.28 cents each no matter which denomination you choose. Why is this value even lower than travel? It’s probably due to the fact that Citibank wants to incentivize people to book travel through its portal. After all, when you book through them they earn some commission from the hotels and airlines. Getting a cash rebate, on the other hand, is a straight out of pocket cost for Citibank. So of course they’ll give you less value per point.

You can also redeem your points for a range of gift vouchers at 26 different merchants from Yoshinoya to entire malls like Wisma and United Square. The average value you get is 0.34 cents per point.

If you’re in a charitable mood you can make a S$10 donation to selected charities for 2,890 points, or 0.35 cents per point. Maybe the value’s a bit higher here because Citibank gets to write off your donation as a tax benefit on its own books? Either way, if you want to give to charity, there are much better ways of doing so.

Merchandise (0.2-0.4 cents per point)

This is one of the trickiest categories to cover because the retail price of goods can differ dramatically depending on where you buy them from. In the example below, it’s easy to value the $50 North Face and $50 Ping Golf voucher, but what about the A360 Fitness Tracker?

If you buy the fitness tracker in Singapore, it will cost you S$299.

But you could get it on Amazon for US$145/S$208 (assuming you can get someone to mule it home for you…try Airfrov?)

I guess what I’m trying to say is it’s very hard for me to compute an exact value for how much you get when you redeem ThankYou points for merchandise (protip: don’t do it), because it depends what sort of retail options are open to you. Based on a completely unscientific sample of 10 data points I’ve got a value that ranges between 0.2 and 0.4 cents per point.

Keep in mind that not all merchandise options come with free shipping- several of them ship from overseas and Citibank expects you to cover the postage too, adding to the total cost. But hey, at lesat Citibank lets you pay for international shipping with your points too!

Instant Rewards (0.28 cents)

Citibank has the option of instant rewards at selected merchants, which are conceptually similar to cash rebates, with valuations to match. I don’t really understand why Citibank needs to offer these options given that it’s the same thing as using your Thank You points for a statement cash rebate at the end of the month.

  • S$10 voucher- 3,600 points
  • S$20 voucher- 7,200 points
  • S$50 voucher- 18,000 points

Seems like a repetition if you ask me. You basically go to the customer service counter and redeem an award with your points the same way you’d apply for a cash rebate on the Citibank ThankYou portal. I don’t get it.

Conclusion- so much choice, so little value

The ThankYou portal has so many different reward choices, but taking any option other than transferring your points to miles will yield inferior value. I supposed you could have saved a lot of time reading this article if you just remember the mantra that

Credit card rewards points should always be redeemed for airline miles

None of the alternate options even comes close to yielding 0.86 cents per point.

So do yourself a favor. If you want to buy a toaster, go to an appliance store. If you want to donate to charity, do so directly. If you want to buy attraction tickets, check the attraction’s own website and see if they offer direct purchase discounts. If you want to book a car, fiddle around with discount codes and get yourself the best rate. There’s no reason why you should be spending your hard earned points on any of Citibank’s inferior redemption options.