UPDATE | Citibank has abandoned controversial changes to the frequent flyer 'conversion rates' under the Citibank Rewards program.
A Citibank spokesperson has confirmed to Australian Business Traveller that the revised rates at which Citi Rewards Points could be swapped for Virgin Australia and Singapore Airlines points as of November 1st – a move the bank took without prior notice to customers – would now be wound back.
Those changes resulted in an immediate effective 'devaluation' of Citi Rewards Points as high as 25% and was also to be applied to customers' existing Citibank points balances as well as future transactions.
Citibank cardholders will once again be able to swap the bank's own points for airline frequent flyer miles at the previous, more generous rates.
The Citibank spokesperson said "we expect the changes to be made as soon as possible, but (it) will likely be a couple of days (before these take effect)."
Card Services customers – a division of Citigroup that includes Suncorp Bank Rewards, CUA and QT Mutual – will too have their conversion rates restored from 2.5 Suncorp/Card Services points = one frequent flyer point to the preferred 2=1 rate following similar cuts, the spokesperson confirmed.
PREVIOUS | Citibank credit card customers will earn fewer frequent flyer points on their everyday transactions, due to changes to the bank's 'exchange rate' for converting Citi Rewards Points to Virgin Australia Velocity points or Singapore Airlines KrisFlyer miles.
Effective immediately, you’ll need two Citi Rewards Points for every Velocity Point or KrisFlyer mile earned via the Citibank Signature, Prestige and CitiBusiness Gold credit cards, compared to the previous rate of 1.5 Citi Rewards points.
For Citibank’s Gold and Platinum customers, one Velocity Point or KrisFlyer mile will now require 2.5 Citi Rewards points, up from 2.0 points previously.
Existing Citi Rewards balances also hit
The unexpected and unannounced devaluation of Citi Rewards points also applies to your existing Citibank points balance, rather than future transactions – a move which has in effect reduced the value of Citibank Rewards Points by 20-25% overnight.
Controversially, Citibank credit card customers received no prior notice of the new conversion rates until they took effect from November 1.
This is at odds with a '90 day' notice clause in the Citibank Rewards Terms & Conditions, concerning changes to the way in which points are earned or converted.
In response to questions posed by Australian Business Traveller, a Citibank spokesperson said "The 90 days’ notice is based on if we remove the program in whole or change the way points are earned in the rewards program, or in the case of Citi Prestige Qantas and Signature Qantas, the way points are converted ie $1 spend = 1 QFF Point."
"Under this same general clause (Section 6), (when) the cost of individual rewards available in the program for redemption (varies)... we will notify you on the website at the time of your redemption – consistent with the below highlighted terms:"
However, the bank did not reply to additional questions asked by Australian Business Traveller – including whether Citibank partners Virgin Australia and Singapore Airlines have increased the cost of purchasing each frequent flyer point, and why the bank elected to provide no notice even if permitted by its own T&Cs.
Citibank: what you’ll now earn per dollar spent
As most Citi customers first accrue Citibank Rewards Points (or CitiBusiness Rewards Points) and later convert these into frequent flyer points with the airline of their choosing, here’s how the new conversion rates change what you’ll effectively earn with Velocity or KrisFlyer on every dollar spent:
- Citi Prestige: $1 spent in Australia = 1 VA/KF point, down from 1.33. A$1 spent abroad = 2.5 VA/KF points, cut from 3.33.
- Citibank Signature: $1 spent on home soil = 0.75 VA/KF points, reduced from 1. A$1 spent overseas = 2 VA/KF points, dropped from 2.66.
- Citi Platinum: $1 spent locally = 0.5 VA/KF points, down from 0.625. A$1 charged at foreign merchants = 1.2 VA/KF points, lowered from 1.5.
- CitiBusiness Gold: $1 spent = 0.625 VA/KF points at any merchant, a decrease from 0.83.
- Citibank Gold: $1 spent = 0.4 VA/KF points on all transactions, down from 0.5 previously.
Although no longer available to new customers, Citibank Gold now ties with the Commonwealth Bank’s Awards and Gold Awards MasterCards as offering the lowest number of airline frequent flyer points per dollar spent of any points-earning credit card in the Australian market.
Citibank credit cards that automatically sweep each month’s frequent flyer earnings across to your airline account – such as the Emirates Citibank World MasterCard – aren’t affected by these changes, nor are members of the Citibank Qantas Rewards program who retain the same earning rates.
The conversion rate from Citibank Rewards Points to Emirates Skywards miles is also unaffected, while it's believed that conversion rates with Citi Prestige's longer raft of airline partners including Air France, Cathay Pacific and Etihad too remain unchanged.
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