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Citi DROPS Most Purchase Protection

I’ve got some sad news for you today. Citi is taking the flamethrower to it’s previously superb purchase protection offered to most cardholders. Benefits are being gutted to just about nothing and the points and miles community is rightfully in a tizzy. Hopefully, I’m going to make today’s post short, so let’s get to it.

Citi Purchase Protection Change Details

What we’ve got is a massive devaluation across nearly all Citi Cards in the form of a huge nerf to various purchase protections and insurances. According to memos being sent to current cardholders, here’s what’s being cut:

Effective September 22, 2019, Worldwide Car Rental Insurance, Trip Cancellation & Interruption Protection, Worldwide Travel Accident Insurance, Trip Delay Protection, Baggage Delay Protection, Lost Baggage Protection, Medical Evacuation, Citi® Price Rewind, 90 Day Return Protection, and Missed Event Ticket Protection will be discontinued and will no longer be provided for purchases made on or after that date. Coverage for purchases made before that date will continue to be available, and you may continue to file for benefits in accordance with the current benefit terms. Roadside Assistance Dispatch Service and Travel & Emergency Assistance will be discontinued and will not be available on or after September 22, 2019.

We are making these changes so that we can continue providing the key benefits that our customers use and value most at no additional cost. This change requires no action on your part. See FAQs under Card Benefits for answers to Frequently Asked Questions regarding these changes.

As a cardmember, you will continue to receive a range of other card benefits including FICO® Credit Score, Citi® Identity Theft Solutions, and Citi Entertainment. In addition, we will soon be announcing exciting new card benefits.

How does this effect Card Valuations?

This is a massive blow to the value of effected cards. As of filming, we know the Citi Prestige and Premier, Citi American Airlines AAdvantage cards, Citi Dividend, Citi Doublecash and AT&T Access cards are all being affected.

The most mind-boggling thing to consider here is that some of the best travel-related protections are being removed from cards that specifically target the travel-centric crowd. I just get a sense that either Citi thinks their clients are really dumb, or they’re hoping this goes un-noticed. When pressed by TPG, Citi responded:

Citi continuously evaluates our products to ensure that associated benefits best meet the needs of our customers. Due to sustained low usage, we will no longer offer select credit card benefits such as Citi Price Rewind and Trip Cancellation & Interruption Protection as of September 22, 2019 so that we can continue providing key benefits our customers use and value most at no additional cost.

That sounds like a lie wrapped in a turd burrito if I’ve ever heard one. This is insurance, isn’t a low number of claims exactly what one would want if one was the underwriter. This would be like a health insurance company dropping coverage for a rare disease because not that many people are affected by it. Their response makes no sense, and leads me to believe that in addition to being dumb, Citi thinks they’re customers are also gullible.

While none of this is good news, the most devastating dingleberry in this #2 sandwich has to be the loss of Price Rewind. It’s particularly heartbreaking because it’s a benefit not really duplicated elsewhere, by any other issuers. If anyone was unfamiliar with this perk, it essentially reimbursed cardholders the difference in price if an item went on sale or was later offered at a lower price within 60 days of purchase. It was fantastic, and now it’s gone. Shame on you Citibank.

citi discontinues purchase protection

As far as effects on valuation, I’ve previously placed a value of $200 annually on Price Rewind and $100 on miscellaneous insurances. I’ve always felt these were conservative values considering each could be theoretically milked for thousands. Furthermore, when evaluating the best travel cards of 2019, I calculated a year-one, net-of-fee value of $2,398 for the Citi Prestige and $783 for the Citi Premier. These now drop to $2,098 and $483 respectively.

That said, there’s another, potentially overlooked side-effect from the disappearance of trip protection and rental car insurances: The bonus-earn categories of travel are now less valuable, because it’s less tempting to put spend on a Citicard. I’d much rather get 3 Ultimate Rewards per dollar on my Sapphire Reserve that still comes with excellent coverage, than 5 ThankYou Points which are worth less on a per-point basis and offer nothing in the way of peace of mind.

Final Thoughts

Like I said, I wanted to keep this a short post so I won’t go further into the weeds. The Citi Prestige is still a valuable card, but it’s overall value, especially compared to direct it’s direct competitor, the Chase Sapphire Reserve, has taken a hit. It’s 4th night free perk, despite being limited to 2 uses per year and it’s $250 annual travel credit can still cover the cost of the card’s annual fee alone.

On the other hand, I can see no scenario in which I’d rather have a Citi Premier over it’s direct competitor, the Sapphire Preferred. Though the Premier earns 3 points per dollar on travel as opposed to Chase’s 2, Ultimate Rewards are worth more than ThankYou Points. I now consider the Citi Premier the least compelling travel card from a value proposition in the semi-premium category.

h/t: The Points Guy