This is outrageous and why we hate Citi. Deception of the first order.
Great article today in Point Hacks -
Citibank cut Citi Rewards transfer rates to Velocity and KrisFlyer with no notice to existing customers - Point Hacks
We should all do exactly as suggested in the posting in this article....IW ill be.
Velocity and KrisFlyer with no notice to existing customers
November 3, 2015
The
Citi Rewards program has long been a favourite of points collectors looking for an alternative rewards program that’s not linked to an American Express.
The transfer rates from Citi Rewards were just cut – down from 1 Citi Reward to 0.666 KrisFlyer or Velocity miles, to 1 Citi Reward to 0.5 airline miles. This is for both the $700 pa Citi Prestige VIsa and the Citi Signature – almost a 25% cut in value.
What’s worse is that this was done on November 1st, and existing cardholders were given no notice. This, to be honest, is a pretty appalling way to run a rewards program.
[h=2]Old vs new earn rates for the Citi Signature and Prestige Visas[/h]I’ve summarised the differences in the previous transfer and therefore earn rates for the two key cards and the new below.
[TABLE="class: tablepress tablepress-id-126"]
[TR="class: row-1"]
[TH="class: column-1"] [/TH]
[TH="class: column-2"]Old [/TH]
[TH="class: column-3"]New[/TH]
[/TR]
[TR="class: row-2"]
[TD="class: column-1"]Citi Rewards Transfer Rate[/TD]
[TD="class: column-2"]1 Citi = 0.66 Velocity / KrisFlyer[/TD]
[TD="class: column-3"]1 Citi = 0.5 Velocity / KrisFlyer[/TD]
[/TR]
[TR="class: row-3"]
[TD="class: column-1"]Citi Prestige earn rate / domestic[/TD]
[TD="class: column-2"]1.33 Velocity / KrisFlyer per $[/TD]
[TD="class: column-3"]1 Velocity / KrisFlyer per $[/TD]
[/TR]
[TR="class: row-4"]
[TD="class: column-1"]Citi Prestige earn rate / international[/TD]
[TD="class: column-2"]3.33 Velocity / KrisFlyer per $AUD[/TD]
[TD="class: column-3"]2.5 Velocity / KrisFlyer per $AUD[/TD]
[/TR]
[TR="class: row-5"]
[TD="class: column-1"]Citi Signature earn rate / domestic[/TD]
[TD="class: column-2"]1 Velocity / KrisFlyer per $[/TD]
[TD="class: column-3"]0.75 Velocity / KrisFlyer per $[/TD]
[/TR]
[TR="class: row-6"]
[TD="class: column-1"]Citi Signature earn rate / international[/TD]
[TD="class: column-2"]2.65 Velocity / KrisFlyer per $AUD[/TD]
[TD="class: column-3"]2 Velocity / KrisFlyer per $AUD[/TD]
[/TR]
[/TABLE]
It’s not a pretty sight for either set of cardholders.
The
Citi Prestige Visa has a $700 annual fee, so for this to go to a 1 point per $ earn card for two of the major airline currencies on the market, when there are higher earning cards out there, is not good.
For
Citi Signature cardholders this means that their effective earn rates on spend have been cut from a relatively market leading position.
I reached out to Citibank who provided this official comment on these changes:
Any changes made are always in line with the rewards terms and conditions. We believe our rewards program continues to provide excellent value for our customers. We continually review our rewards program to ensure it provides value for all of our customers. We have recently conducted one of these reviews in light of recent external market changes and the impacts on our Rewards Program.
[h=2]What can you do about this?[/h]Firstly, if you are interested in whether this is above board,
the Citi Rewards terms are here.
Term 6.2 is the key one:
6.2 We may vary these Rewards Program Terms and Conditions from time to time. We will notify you of a change in the following ways:
* If we change the rate at which all Points in the program are generally earned or converted we will give you 90 days written notice of that change;
* We will give you 30 days written notice of other changes to these Rewards Program Terms and Conditions;
* If we change the Point value of individual goods or services in the program to reflect changes in the price charged by our suppliers for those goods or services, or if a particular Reward is unavailable we will notify you on our rewards website at the time you redeem your Reward.
I don’t know if Citi are within the terms of their program to make a change with no notice if they claim that the price charged by KrisFlyer or Velocity has increased.
I don’t believe that a points transfer is a ‘good or service’, but wouldn’t be surprised if that term is leant on to disclaim the lack of notice.
I am no lawyer, so if you have a specific reading of the terms, I’d love to hear it in the comments.
So, firstly, contact Citi and express your displeasure. Ask for discounts on your annual fee and/or bonus points as compensation. If you don’t get a satisfactory outcome, maybe it could be worth asking the
Financial Ombudsman to get involved.
If you are willing to share any successes, again, please do so in the comments.
[h=3]How it should have been done?[/h]I don’t think making changes to a rewards program is a problem. Businesses and contexts change all the time, and as consumers we need to be prepared for that.
However banks and rewards programs need to recognise that member engagement is only possible if there is consumer trust in the program. Trust needs to be engendered by providing clear notice of changes, in writing, allowing the consumer to take action based on the change.
Regardless of Citi being in the right or wrong according to the letter of their terms, they will have screwed many consumers by reducing the value of their hard-earned points balances, without offering the ability to do anything about it.
[h=2]What are the non-Citi Visa options for Velocity earn?[/h]For heavy non Amex users, this leaves few Velocity-linked cards that earn 1 point per $.
The
Virgin Money Visas lead the pack at 1 Velocity points per $ on the Flyer Visa, and 1.25 points per $ on the High Flyer Visa.
The Virgin Money cards are also issued by Citibank – but are managed by an independent business to Citi. My understanding that points earn rates, bonuses and other key product features are managed by Virgin Money, not Citibank, but I suppose there’s also a small risk of product changes there.
[h=2]Summing up[/h]I’ll also change the Point Hacks card guides to Citi Rewards, and the Citi Signature and Citi Prestige Visas in the next day – unfortunately I’m travelling most of today but will try and get this done ASAP.
Finally, I’ve also tried to confirm with Virgin Money that the Flyer Visas remain unaffected for the foreseeable future. Again, I’ll add any comment I can on that to this post.
Thanks to a Point Hacks commenter for the heads up,
and AFF for links to terms and their opinions.
