Citi changes up credit card rewards ahead of interchange fee cap

Thursday 22 June 2017

Article by Kelly Emmerton

With credit card interchange fees set to be capped at 0.8% come July 1, credit card giant Citi has rethought the rewards on offer for its cardholders, introducing a tiered earn rate for different types of spending.

Citi changes up credit card rewards ahead of interchange fee cap

Citi was one of the first to announce adjustments to its credit card rewards scheme as card issuers prepare for the impact of the RBA’s new interchange regulations. It was expected that rewards value in the credit card market would generally decline as the new regulations came into effect, but the changes to Citi's cards aren’t bad news for savvy shoppers at all.

“The changes from Citi mean that instead of a flat earn rate, different types of spending now attract different points,” said Mozo Data Manager, Peter Marshall.

“For cardholders who are careful to spend with Citi partner’s whenever they can, these changes may actually wind up netting them more rewards points. Those shopping at big supermarkets or petrol stations probably won’t see a big change in their points earn for the most part.”

The value of rewards points at major retailers, supermarkets and petrol stations will remain the same on three out of four cards. On the fourth, the Citi Signature Qantas card, the points earn rate dropped slightly, but the trade-off is that cardholders can now earn uncapped points at the new rate.

The spenders who may lose out on value are those spending outside these major shopping spots -the earn rate on these purchases was reduced on each card.

RELATED: Credit card rewards schemes devalued as interchange fee changes come into effect

Other Citi perks, such as free wine when dining at partner restaurants, exclusive deals through Citi World Privileges program and heaps of freebies for AFL fans thanks to a continuing partnership with the Sydney Swans are still on offer. But travellers should also take note of changes made to the conversion rate between Citi rewards points and frequent flyer points for airlines other than Qantas.

Singapore and Cathay Pacific airlines now have a 2.5 to 1 conversion rate, up from 2 Citi points per frequent flyer mile. The rate for other airlines including Etihad, Qatar Airways and Thai Airways, changed from 2 Citi points per frequent flyer point to 3.

Travellers who prefer to fly Virgin are in the clear, as the conversion rate from Citi rewards to Velocity frequent flyer points remains the same,

“If you regularly use your card to fly with airlines other than Qantas, these new point conversion rates could definitely make a difference to the value of your rewards, so it’s something worth thinking about,” said Marshall.

Check out the major points changes to Citi rewards cards below:

Citi Signature (rewards)

The old offer: 1.5 points per $1 spent, capped at $20,000 each month.

What you get now: 2 points per $1 spent at a range of partner restaurants, hotels and airlines; 1.5 points per $1 at major supermarkets, petrol stations and retailers; and 1 point per $1 spent on eligible purchases anywhere else.

Citi Signature (Qantas)

The old offer: 1 point per $1 spent up to $3,000 each month and after that, 0.5 points per $1 for spends up to $10,000 a month.

What you get now: 1 point per $1 spent at major restaurants, hotel chains and airlines, uncapped; 0.75 points per $1 spent at major petrol stations, supermarkets and national retailers, uncapped; 0.5 points per $1 spent everywhere else, capped at $20,000 per month.

Citi Prestige (rewards)

The old offer: 2 points per $1 spent, uncapped.

What you get now: 3 points per $1 spent directly with a range of partner restaurants, hotel chains and airlines; 2 points per $1 spent at major petrol stations, supermarkets and retailers; 1 point per $1 spent on eligible purchases everywhere else.

Citi Prestige (Qantas)

The old offer: 1 point per $1 spent, uncapped.

What you get now: 1.5 points per $1 spent with a range of partner restaurants, hotel chains and airlines; 1 point per $1 spent at major petrol stations, supermarkets and retailers; 0.5 points per $1 spent on eligible purchases everywhere else.

In the market for a new piece of plastic? Make sure you take our reward revealer tool for a whirl to find the best option for you.

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