Citibank sharply devalues PremierMiles, another time!

I hate to start the New Year with some sad news. In 2011, I’d called the Citibank PremierMiles the best travel credit card around in India, because you could earn 1 airmile across airline programs for every INR 25 spend, and then you could earn 1 airmile across airline programs for every INR 10 spend for air tickets or booking via specific websites.

With effect from February 1, 2015, all that changes.Citibank is devaluing the transfer ratios for the transfer to their partner airlines from 1:1 to 2:1, which means, 2 PremierMiles = 1 Airline Mile. For your reference, the following airlines are partners with Citi for conversions to airmiles:

Not just that, they are also doing a 10% devaluation of the miles for cash redemptions. So, you no longer can burn your PM at 1 PM = INR 0.5, but at 1 PM = INR 0.45. The second big devaluation in the history of this card.

Clearly, the party is over. This translation means that I earn 5 miles on the card for all my airline spends, and 2 miles for all my other spends. This is much worse than the Citi Prestige which has become my go to card ever since I received it, and clearly the case for conversion to the Citi Prestige becomes even more stronger now.

The only good news is, that Citibank has given a notice of a whole month to cut-over to the new conversion rates, which means there is an opportunity to convert your PremierMiles to a mileage currency of your choice in the next few days.

For the moment, PremierMiles will no longer get a lion’s share of my spend, and maybe I’ll go back to spending a lot more on the Citibank Prestige and the Air India SBI Credit Card as well.

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About Ajay Awtaney

Ajay is a financial services pro, working to bring order to the chaos of the financial industry on an everyday basis! Beyond that, he dons the hat of India's favourite frequent traveller, trying to help people elevate their travel experience via tips and tricks they never knew before, or introduce them to the world of miles and points. Armed with an MBA from MDI Gurgaon and graduate degree in computer science from the University of Delhi, Ajay brings a systematic and objective approach on the table for his audience in dissecting travel and loyalty programs in India and around the world, and how to benefit from them. Ajay has been quoted in various reputed traditional and online media including The Hindustan Times, Inside Flyer, Bloomberg, DNA India, Conde Nast Traveller, The Telegraph, Mumbai Mirror, Mint, MoneyLife and The USA Today.

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Comments

  1. Thanks Amit,
    Congrts on the 6 lakh miles. I guess you can do a world tour on that.
    I was always keen on the Prestige card irrespective of the fee but didn’t qualify. I guess its 3rd time lucky that I discussed it with the agent. And thanks to this AJ I knew that my miles will get doubled instead of halved with the development.
    I have a salary account with Citibank so that may have helped getting the higher credit limit.
    I only got the PM in Oct and haven’t really spent much on it (only 25k pts.). Bulk of my spending has been on the AI-SBI card for breaching the 10L mark. Have a few thousand left to cross that and another 5 months to go so I’ll cross it few weeks before my next trip abroad. I think the SBI AI Signature and the Prestige are the only cards which give you bonuses on crossing targets and that’s make it real value. Do we have the 10x points with the prestige too ?

    • Personal View

      Hi Kapil,

      Firstly congratulations on the Prestige upgrade as I personally feel it’s an excellent product.

      I happen to upgrade 10 days back out of compulsion as I had over 3 lakh miles accumulated in the PM Card. At first I felt it was outrageous for them to charge a whopping fee of Rs. 20k + taxes. But eventually realised that if I don’t upgrade, I would end up being a loser as my miles would be devalued to 50%!

      Besides, they are giving 2500 points (equivalent to 10000 miles) that can be transferred to any of the partner airlines and also a Rs. 10000 Taj/ ITC voucher which ends up covering for the Rs. 20k paid as fee. Of course you also have an unlimited lounge access priority card (valued at $399 each) for you as well as all the add on card holders.

      I think they would have seen your transactions as well as your spend limits to decide on upgrade.

      How many accumulated miles did you have in PM?

      The beauty of having upgraded to Prestige is that your miles on conversion to any partner airline gets doubled (3 lakh miles to 6 miles in my case 🙂 )

      A multiplier effect (double miles in Prestige) is always better than the division effect (halved miles in PM because of the devaluation).

      So in my case paying Rs. 20k is worth every penny 🙂

  2. Hi AJ,
    Just wanted to update you that I called up Citibank yesterday to redeem my Premier miles points to Etihad. I got chatting with the CSR about the devaluation and casually asked him possibility of converting the PM to the Prestige card. He offered to check and surprising consented to convert one of my 3 cards to Prestige. Last two times I had called to apply, I was told I didn’t qualify because of the 40 lakh salary criteria. I asked him to process my request and cancelled the Etihad transfer so that he could transfer my PM points to Prestige. This is a pleasant surprise none the less. Maybe they have softened their stance due to the backlash on PM devaluation. What do you think ?

  3. Ajay,

    Any idea if they are devaluing the conversion to the Hotels as well. Looked at the Citi mail and website but couldn’t find any evidence. Though common logic says those would get devalued too, there isn’t anything that mentions so. If not devalued, that just makes the Taj IC that much better option than anything else on that list, especially for lower miles I can stay for a couple of nights but wont have enough to fly anywhere.

  4. Dear Ajay,
    You might have reply this earlier also, but please clarify it once again.
    I am a domestic traveler. I would like to know if I transfer my points to Etihad, can I book tickets only for within India. I went to their website, but was not able to get within India connection for example Bangalore – Delhi.

    Thanking you
    Subhash Agarwal

    • @agarwal to book flights inside india you should check availability on the jet airways website and then call etihad to make the redemption. However only vakud 14 days out.

  5. I had close to a lakh PMs and I just converted them Air India Flying Returns Miles just because it gives me more flexibility to choose flights. I am quite sure of dumping my PM card and going for an AI SBI card. Though it’s AI, I still feel it has the best earning capacity.

  6. @Amit: If you can, upgrade your PM card to Prestige. That way your miles will get doubled for 20K INR. You will have a much wider choice of airline and hotel partners to transfer your miles to.

  7. I will stop using premier miles from next month…I will go back to jet airways now….or may just plan on getting prestige….what a bummer….

  8. Dear Amit.
    you have too many miles,
    if you shift to air india check your burning abilty on air india only. but if you stay you can burn your miles anywhere on pm site or goibibo.

  9. I was equally disheartened to read the changes as I have accumulated over 3 lakhs miles in my PM card. Do you suggest I transfer all the miles to AI Flying Returns where I am a member or should I just stay put for the time being..

  10. @ajay : could you post a pros and cons post on airline partners sometime this month ? think the other commenters have the same concern about where to put the miles, now that premiermiles doesnt make sense ! accumulated about 1l over the year, have to park them somewhere (either domestic or intl)

  11. @Aditya

    2:1 devaluation has happened only on miles transfer. On Premier Miles portal – previously 1 mile = Rs 0.5 but now its Rs 0.45. Thats the 10% devaluation.

  12. This might be a stupid question- but has the 2:1 devaluation occurred only when you transfer miles to a specific airline’s rewards programme, or also when you redeem the miles on the Premier Miles web portal or ibibo? I didn’t quite understand what the cash redemption devaluation of 10% implied. I haven’t yet received the email from Citibank.

  13. @Rajat I don’t think Citi is devaluing the Prestige card just yet. They just sent an email to existing Prestige card holders with benefits chart for 2015. Most of the features have been retained. You can refer it here: http://www.online.citibank.co.in/portal/newgen/mailer/Dec14/NB-Dec-Citi-Prestige-Offers-Mailer-portal.htm?eOfferCode=PNDPOTMLR

    Jet Airways is an airline partner for Prestige card so you can transfer your miles to JP as well. The membership fee pays itself multiple times over with 10K miles, 10K hotel vouchers, Unlimited Priority Pass, Etihad Gold + 5000 Miles. If you also hold SBI Air India card, you can get a Gold status match with Etihad. So you don’t have to spend 10Lacs with SBI card to get Star alliance gold.

    @Mihir You could consider transferring your PM miles to Air India or Etihad for domestic use as Ajay suggested. Still waiting for best option for International travel.

  14. @V
    Amex Platinum Travel provides Indigo vouchers against Points. Also HDFC.

    @Manish
    My just Citi PM just got approved – still to get it but i dont think limit would be 5L+. In this case – which is the other best option i have ?

  15. @V
    Well, when I converted the earlier Jet Citi card to PM card, I was offered it as free for life by Citi itself. I never actually asked for it. may be because the jet Citi card was also free for life, which may be because I am a Citi customer since 2005.

  16. @Rajat
    How did you manage to get free for life PM card?
    And according to me if your card is free I think you should continue to use the card.

    @Rohit
    Which card are you referring to which provides Indigo airline vouchers against points?

    Thanks!

  17. Thanks Manish! My only concern, as I mentioned above, is that Citi may devalue Prestige card as well in next few weeks/ months. It would be a double hit for me since I have been offered a free for life PM card and I would loose this benefit if I convert it into Prestige.

    Would love to get views on how others are thinking about Citi maintaining Prestige card benefits.

  18. @agarwal Accelerated miles are additional miles that you get at 10X partners or with airline spends. If these merchants do not use a Citibank gateway then you get 4 Miles/Rs 100 initially and the balance 6 Miles/Rs 100 are posted after about 90 days.

  19. @Mihir 40L pa is not an official criteria. When I asked the Citibank customer service agent he wasn’t sure. However he did mention that Prestige card is issued with a minimum credit limit of 5 lacs. So if your existing PM card has a credit limit of 5+ lacs, then conversion to Prestige card might be as simple as sending out an email or making a phone call.
    @Rajat AFAIK there is no deadline announced for conversion from Prestige to PM card. However it is reasonable to believe that post Feb 1, the PM to Prestige conversion ratio may also take a hit. So to be on a safer side, do it ASAP.
    @Ajay would love to hear your views on where to banks the PM miles from a Domestic traveler’s perspective.

  20. For someone who doesnt qualify for Citi Prestige (40L pa) – whats the best alternative ? This still makes sense for the first year – 10k miles = 4500/- in worst case which is more than the joining fee of 3k+taxes.

    My back of envelope calculation tells me SBI AI Sign is a much better proposition now due to the bonus miles it gives you at 3L/5L/10L milestones. Only drawback is AI 🙁

    What about HDFC Regalia ? Not counting JP/Diners cards as i dont travel much in India and Diners is hardly accepted anywhere.

  21. I’ve surrendered this card in Sep’13, due to very poor customer service and subsequent delay (of 3 months) in resolving the issue by Citi staff when I complained about accelerated points not being credit to my account. I have switched to other card which provides Indigo airline vouchers against points, and I am happy with that.

  22. By when can one convert PM to Prestige Card and transfer PMs to prestige points in 2:1 ratio? Is there a deadline? I am also a bit sceptical that after conversion, Citi may not devalue Prestige card as well.

  23. citi asked for a lot of documentation for the prestige card which i am not happy to provide. what are the other alternatives then ? sbi air india signature card doesnt compare directly with the host of features citipremiermiles offered.

  24. Hi AJ,

    Do you feel now Jet co-branded cards are much better than premiermiles? (for people not having/eligible for citi prestige)

    And can you start a poll on which airline miles people are preferring to transfer premiermiles before Feb 1 and a small reason for the same.I am very confused.

    Thanks.

    • @V, I’m still not sure about the first question of yours, and will come back to you when I’ve given it some thought. However, for the second part, you need to think it through about where your personal circumstances lie. If you want to do a lot of Indian travel, look at Etihad or Air India. If you want to travel abroad, then you have a lot of choices. I’ll be putting out advice on that soon as well.

    • @manan, the prestige is a lifestyle card and you need an annual income above INR 40 Lakhs for it. If you can cross over, it always made sense 🙂 So go for it! I don’t mind the fees!

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