Citibank cuts credit card frequent flyer points: what you need to know

By Chris Chamberlin, December 15 2015

Far-reaching changes to Citibank’s line-up of credit cards will affect all customers earning Qantas, Virgin Australia, Singapore Airlines and Emirates frequent flyer points on their plastic through new monthly earning caps, reduced earning rates and increased Citibank Rewards conversion rates.

Credit card BPAY payments will also no longer earn points from next year, while Citibank’s overseas transaction fees rise to 3.4% across the board: increasing the cost to earn points overseas while also broadening to apply to ‘any transaction with an overseas merchant’, including in Australian dollars.

Worst hit are Citibank Signature cardholders with points on international purchases lowered from four Citibank Rewards points per A$1 to 1.5 (uncapped) and points on Australian transactions shuttered after the first $20,000 spent in each monthly statement period from 18 March 2016.

That’s combined with a drop in the ‘conversion rate’ between Citibank Rewards points and both Virgin Australia Velocity points and Singapore Airlines KrisFlyer miles which too affects Citi Prestige, going from 1.5 Citi points = one VA/SQ point to two Citi points for the same.

For customers with the direct-earning Emirates Citi World MasterCard and Citi Qantas Signature cards, transactions in Australia will accrue one point per dollar on the first $3,000/month only, decreasing to 0.5 points per $1 up to $10,000 spent monthly after which no more points are awarded locally.

Emirates cardholders will also earn fewer miles on overseas transactions with the current 1.5 points per A$1 replaced with 1.25 points, and two points per dollar when booking Emirates flights pared back to 1.5.

"Due to the external re-pricing of interchange rates, effective 1 November, the revenues that Citi receives from individual credit card transactions has significantly decreased," a Citibank spokesperson shared with Australian Business Traveller.

"As a result of this change, Citi has advised customers that its credit card rewards program will be amended from March next year. Citi remains committed to continuing to provide customers with both a competitive and compelling rewards proposition," the spokesperson added.

Also read: ANZ boosts Virgin Australia Velocity credit card points

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Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!

Michael Kao

Michael Kao

Qantas - Qantas Frequent Flyer

06 Nov 2014

Total posts 340

Is paying rates and utilities considered as Bpay?

Chris Chamberlin

Chris Chamberlin

24 Apr 2012

Total posts 2951

BPAY payments are bill payments made through your Internet banking window via the 'BPAY' system, so unless that's how you're paying bills, the answer is no.

(And if you are, switch to paying these suppliers directly by 'credit card', rather than 'BPAY, funded by a credit card'.)

flyingchris

flyingchris

05 May 2014

Total posts 7

Well so long Citibank Signature card, unfortuantley some places don't offer direct debit for fees paid (body corp, rates, land tax) which add up to quite a nice haul. 

KK

KK

Qantas - Qantas Frequent Flyer

20 Dec 2012

Total posts 104

Fortunately the Priority Pass is still there.

Skipp

Skipp

Qantas - Qantas Frequent Flyer

20 Aug 2012

Total posts 126

Lol... Just as I was about to cancel one of my other credit cards, along comes this bad news from Citibank. I'll now switch the card I intend to cancel in January to the Citi Visa Signature card. Thank you Citibank (& AUSBT) for helping me make what is now an easy decision on which one of my credit cards to cancel.

HSBC VISA Platinum, you're off the hook.

Jono

Jono

Qantas - Qantas Frequent Flyer

25 Jan 2013

Total posts 246

Off memory CitiBank tried a points decrease a few weeks ago and backed down after consumer backlash. It looks like airlines are trying to have the best of both worlds with these programs:

On one hand, they want to have an impressive suite of partners for revenue and added value for their members, but also want to keep everyones eyes on the prize which is loyalty to the airline.

Of what I've seen you always get the most value for your points when flying, (which isn't surprising, these programs are run by airlines,) but interesting to watch partners like Woolworths, Optus, CitiGroup and alike tighten their rules.

A friend of mine who is a more hardcore follower then I with these programs, once reminded me that there is always someone paying for the points and whilst I accept playing devils advocate here will probably earn me a record number of down votes, having to buy 10,000's of points ads a lot to the cost of aquiring customers. 

I'm not advocating these drops in exchange rates for points. I'm just pointing out the antithesis that when partners spend money buying us as consumers points, they have to make that cash somewhere. 

Yohy

Yohy

20 Apr 2014

Total posts 94

it's disappointing that Citi didn't learn after the huge backlash - points earn rates are watched closely by customers.

surely they could have rebalanced the commercials of these cards through other means (annual fees, rewards transfer fees) rather than penalising/deterring high spending customers.

just lazy and short sighted cost cutting.

jaspalsb

jaspalsb

Qantas - Qantas Frequent Flyer

15 Dec 2015

Total posts 6

Any recommended Visa/MC cards with no annual fee that might be an alternative to the citibank one?

Undecided if I'll keep it or not (currently doing the usual rounds with sign on bonuses but figure that will come to an end in a few years with all the fee changes being pushed through by the RBA, at which point a no annual fee card earning SOME points is still better than nothing)

KK

KK

Qantas - Qantas Frequent Flyer

20 Dec 2012

Total posts 104

HSBC Platinum Visa

lvtravel01

lvtravel01

01 Sep 2015

Total posts 17

HSBC Platinum to Velocity. No annual fee. Better than my citi platinum.

Redemption of HSBC Reward Points for Velocity Points is only available to eligible HSBC Premier or Platinum credit card holders. 1 Velocity Point will be earned for every 2 HSBC Reward Points transferred. A minimum Points transfer requirement applies; members must transfer in blocks of 5,000 or 10,000 HSBC Reward Points.

alenb

alenb

Emirates Airlines - Skywards

14 Feb 2014

Total posts 32

its bye bye birdie to citi emirates mastercard they've reduced it to rubbish in the last few years and with high annual fee now they offer peanuts 

evilbrian

evilbrian

Emirates Airlines - Skywards

07 Sep 2012

Total posts 151

@ alenb - I've been a heavy user of the Citi Emirates Mastercard for quite a while now, so couldn't agree with you more. When that card first came out it had a 1.5 points per dollar spent earn rate, with a 150K max earn per year. They then dropped the standard earn rate to 1:1, but made a big deal about how it was now an unlimited earn rate.

Now they want to drop it to what would be an effective 0.65 per dollar earn rate on a $10K per month earning limit.

If you really want to keep earning Emirates points, it's time to get yourself an AMEX whereby you can convert their membership rewards to Skywards miles on an unlimited  0.75 points per dollar spend.

brucek

brucek

Qantas - Qantas Frequent Flyer

12 Jan 2013

Total posts 6

The Citi Emirates Mastercard used to arguably be the best rewards/travel card around.  I copped the first decrease in benefits on the chin.  This time I'm having second thoughts.  

The problem I have with Amex and DC is increasingly fewer places accept them and most charge a premium.  I don't see these a viable options for my situation.

Does anyone know of a viable alternative to the Citi Emirates World Mastercard? 


The Evil Muppet

The Evil Muppet

Virgin Australia - Velocity Rewards

16 Dec 2015

Total posts 41

It isn't only Citi's directly marketted cards that are impacted.

Virgin Money's cards have also been impacted:

https://virginmoney.com.au/credit-card/rewards-and-benefits/earn-and-redeem-velocity-points/

Even though the High Flyer card has seen the earn rate cut by 20% and the Flyer card by 33% (!!), the annual fees remain the same.

I urge all Virgin Money cardholders to write to the issuer and complain bitterly.

Of course, this action is entirely due to the actions of the RBA Payment Systems Board - their reasoning bears no resembelence to logic but has real impacts on cardholders with no net benefit to business.

AlexTravAddict

AlexTravAddict

Qantas - Qantas Frequent Flyer

17 May 2015

Total posts 72

overseas transaction fees rise to 3.4%? Wow, what a rort. That is $34 for every $1000 spent. I'd much rather a card with no transaction fee and no points than a card charging this kind of rate.

evilbrian

evilbrian

Emirates Airlines - Skywards

07 Sep 2012

Total posts 151

@ AlexTravAddict. I feel the same way. FWIW, I used to work at a high level with another bank, and the Citi changes to the Emirates card reeks of Citi virtually giving up on this product. No card scheme with aspirations of long term success goes out of its way to make itself useless to it's primary customers, and to rip away from them almost everything that encouraged them to take up the card in the first place - yet this is precisely what Citi has done.

Citi are now basically saying to anyone who wants an Emirates card that you can only have it by paying a high fee and high charges, while getting close to the lowest set of benefits in the market.

sharrkey

sharrkey

Singapore Airlines - KrisFlyer

06 Feb 2014

Total posts 70

For  once  we   should    all  teach   a  bank   a   good   lesson.  After    March   2016 let  us   all     boycott   citibank   and  it's  credit  cards   completely. Canel   all   citibank  cards   and  take   something   else.  That  will   teach   them.

Runningonempty

Runningonempty

Qantas - Qantas Frequent Flyer

25 Jun 2015

Total posts 11

Well that's it for me also. I've already put a reminder in my iphone to stop using the card on the 18th March. Earned over 1.1 million qantas points using this card in the last 12 months. Good while it lasted. Don't think I'll stomach the $700 pa fee to upgrade to their top tier card.


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