Last Reviewed: 12/27/2011

The Citi ThankYou Premier Card is a cornerstone of Citi’s credit card offerings, and a solid one at that. With a solid 25K spend target bonus  (you just need to spend $2,000 in 3 months to earn these points), plus the potential to have this card perform at or near the 2% cashback level (read on to find out how), along with a 33% boost in the value of your points when you redeem for airfare, this card could make a fox smile. Perhaps it’s only drawback is the $125 annual fee, which is waived for the first year.

Earning Rewards with the Citi Thank You Premier Card

If you weren’t a careful reader of this offer, you might arrive at the conclusion that the Citi Thank You Premier card lacks an earnings punch, getting you 1 point for all purchases, and an additional (measley) 0.2 points on gas, supermarket, drug store, and commuter/parking purchases.

However, a more careful read yields a markedly different conclusion. When you purchase airline tickets using your Citi Premier Card (including tickets you purchase for other people), you’ll earn 1 Citi Flight point for each mile flown. So, 3 roundtrip tickets from Boston to LA will earn you about 18,000 Citi Flight points. “So what?”, you ask.

The trick here is that Citi Flight Points convert to normal (redeemable) Citi ThankYou Points on a 1:1 basis as you earn Citi Thankyou points. Example: let’s say you have 18K Citi Flight Points, but have only spent $5,000 on your Citi Premier credit card this year. You’ll only be able to convert 5K of the 18K Citi Flight Points into useable Thankyou Points.

But the interesting news here is that if you earn more miles flying than you spend on the card (which is quite possible), then all of a sudden you now have a card that functions like a 2% cashback card (assuming you redeem for rewards yielding $0.01 per point, more on that in the redemption section). We at GetDebit refer to this sort of credit card as a “quasi-cashback credit card”, since when the correct earning and/or redemption strategy is followed, the credit card becomes indistinguishable from a legitimate cash-back card.

So, taking into account a really solid spend target bonus of 25K TY Points plus the opportunity to have up to a 2% quasi-cashback card, all-in-all it’s a pretty amazing deal.

Of course, offsetting the great earnings is the $125 annual fee (waived for the first year), which is quite painful. But the 25K spend target bonus alone covers you for 3 years (including year 1 where the fee is waived!).

Quick Discussion of the Anniversary Bonus

The Citi Premier credit card gives you an annual bonus which increases each year you own the card, maxing out at 5%. The way it works is simple. At the end of the year, Citi tallies up all the ThankYou Points you earned fronm purchases during that year, and then gives you an additional bonus. In year 1, it’s a 1% bonus; year 2 is 2%, and so on until you reach the 5% maximum.

While it looks nice on paper, frankly it doesn’t amount to a hill of beans and really doesn’t move the needle much. If, for example, you earned 50K TY points (roughly $4K of spend each month on the Premier card) at the maximum 5% bonus level, you’d earn an additional 2,500 TY points, or about a $25 bonus. But hey, it’s something…

Redemption Strategies for the Citi Premier Card

With the Citi Thankyou Rewards Program, while there are a number of redemption options, a couple of which even get you $0.01 per point in value, there is one killer (and thus highly recommended) redemption method: redemption for flights using Citi’s booking site.

This is because when you redeem for flights, Citi boosts the value of your TY points by 33% right out of the gate. As a Bostonian might say, that’s “wicked”. Your natural next question is probably going to be, “Well, are the rates on the Citi site competitive with open market rates to purchase airline tickets?” The short answer is “yes”, but you can read our post analyzing the Citi ThankYou Rewards Program to learn more.

If you carry a student loan or mortgage, you can apply your rewards against that debt at the rate of $0.01, which isn’t shabby at all (but again—go for the flights!).

GetDebit’s Final Ruminations on the Citi Premier Credit Card

Well, there you have it, our complete workup of the Citi Thankyou Premier card with 25K spend-target bonus points. I would recommend this card under 2 circumstances:

• If you are just interested in the sign-up bonus (and thus plan to not hold the card for very long).  25K points (worth $333 if you redeem for airfare) is nothing to sneeze at!
• If you believe that you will purchase enough airline tickets each year (and thus earn enough miles) with the card to just about match the amount of total dollar purchases you make with the card (thus turning the Citi Premier card into a quasi-2% cashback card).

If you aren’t interested in pursuing the sign-up bonus, and don’t think you will be able to make good use of the ThankYou Flight Points, then this card probably doesn’t make sense for you.

Well, that’s our IQ exercise of the day. Cheerio!

Simply follow this link to apply for the Citi ThankYou Premier Card with 25K bonus points.