How one call led to a points bonanza and rethought plans

A couple of days ago I called Citibank to cancel one of my AA Executive cards since the annual fee was about to come due.  As a reminder, last year Citi offered a whopping 100,000 AA miles plus $250 statement credit as a signup bonus for the $450 per year AA Executive card, so many of us now have several of these cards

Before cancelling the card altogether, I asked about retention offers and was transferred to a retention specialist.

The retention specialist found only one useful retention offer for this card: For 16 statement cycles, I would earn 1000 bonus miles every statement cycle in which I spend $1,000 or more.  In other words, if I kept the card for one more year, I could get 12,000 bonus miles.  If I kept it more than a year, I could max out the offer at 16,000 bonus miles.  An extra 1000 miles a month for $450 per year?  No thank you.

Normally I would ask to downgrade to a no fee card, but I have plans to apply for more Citi cards in the future and so I’d like to actually reduce my overall credit line with Citi in the hopes of an automatic approval or two.  So, rather than downgrade, I went ahead and cancelled.  The next part of the call was where things got interesting…

I had recently read Travel with Grant’s experience in asking about retention offers on all of his Citi cards in a single phone call (found here).  I thought that was a great idea so I asked the specialist if she’d mind going through all of my Citi cards to see if there were any worthwhile retention offers.  As a reminder, I had previously asked Citi for a retention offer for my ThankYou Preferred card and was given a very nice opportunity to earn 5 points per dollar at drugstores, grocery stores, and more for 3 months (up to $8750 spend).  In the comments to that post, a number of readers reported receiving even better offers, so I was hopeful.

Rather than detail every bit of the conversation, here is a summary of the retention offers that are now active on my accounts thanks to this one phone call:

  • Citi Forward card, 3X everywhere: Earn an extra 2 points per dollar on all spend for 6 months.  Score!  Keep in mind that the Forward card already offers 5X at bookstores, restaurants, and more, so this offer means that I’ll earn either 3X or 7X depending upon where I use the card!
  • Citi Prestige, 5X supermarkets, drugstores, and gas stations: Earn an extra 4 points per dollar at supermarkets, drugstores, and gas stations for 6 months. Limited to 50,000 bonus points.  Thanks to the 50K limit, this offer is good for up to $12,500 of 5X spend.  This is a nice complement to the similar offer I already had on my Preferred account for up to $8750 of 5X spend.
  • AA Executive card (a second one), 1000 extra miles per statement cycle: This offer was the same as the offer for the cancelled AA Executive card.  For the next 16 statement cycles, I can earn a 1000 mile bonus on every statement cycle in which I spend at least $1,000.  Since I plan to cancel or downgrade this card in about 4 months, this offer only amounts to a total of 4000 or 5000 bonus miles.  I’m not at all sure its worth it given that the same spend on my Forward card will now earn 2 bonus points per dollar.
  • Citi Double Cash card: No offer. Card is too new.

Rethinking plans

In the recent post “Top tier AA status secured. Now what?” I wrote that I could earn up to 20,000 EQMs (elite qualifying miles — towards maintaining AA elite status) through credit card spend alone.  I realize now, though, that I would do much better putting that same spend on my Forward card (to earn 3X) than on the AA Executive card (which typically earns 1X, but would earn a wee bit more thanks to the retention offer describe above) or the BarclayCard AAdvantage Aviator Silver card. 

Here are some relevant facts:

  • With the AA Executive card, I could earn 10,000 EQMs with $40,000 spend.  I would also earn 40,000 miles + 5,000 bonus miles (from the retention offer), for a total of 45,000 AA miles.  Similarly, with the BarclayCard AAdvantage Aviator Silver card, I could earn 10,000 EQMs and 40,000 miles with $40,000 spend.
  • Thanks to having a Prestige card, I can get 1.6 cents per point value from ThankYou points by using them to buy flights on American Airlines or US Airways.
  • In my recent mileage running fun (30,000 miles to nowhere: Mission accomplished.) I reported averaging 5.8 cents per EQM (including hotel costs).  That was accomplished with some amazing and rare cheap fares, though.  So, lets conservatively estimate future mileage running at 10 cents per EQM.  In reality I would expect to do much better, but at least that gives us a number to work with…
  • Based on the 10 cents per EQM estimate, it would cost $1,000 in flights to earn 10,000 EQMs.
  • $1,000 in flights would cost 62,500 ThankYou points (this fudges things a bit since not all mileage running costs are from flights, but it should be in the ballpark since we’re also using an inflated cost per EQM).
  • While earning 3 points per dollar, I would have to spend $20,833 on my Forward card to earn enough ThankYou points to get 10,000 EQMs through mileage running. That’s about half of the spend required for the same number of EQMs with the AA Executive card!
  • By mileage running rather than earning EQMs from credit card spend, I would earn AA miles for flying.  With a 100% bonus for top tier elites, I would end up with around 20,000 redeemable miles on top of the 10,000 EQMs. 
  • If I match the $40,000 spend with my Forward card, I would earn almost enough ThankYou points to get 20,000 EQMs from flying and 40,000 redeemable miles.  In other words, the same amount of spend on my Forward card as on the AA Executive card would result in just as many redeemable miles and nearly twice as many EQMs.

In summary, if I’m willing to mileage run (fly around for no purpose other than to earn miles), I can do far better manufacturing spend on my Forward card than on my Citi Executive card.  The same is true of the BarclayCard AAdvantage Aviator Silver card.

While I still haven’t committed 100% to re-earning top tier AA status for 2016, I’m leaning towards doing so.  I had planned to work on the $40K spend on my Executive card before cancelling it in 5 months or so, but now I won’t.  Instead, I’ll direct all non-bonus spend toward my Citi Forward card. 

What about Delta?

In the post “Am I done with Delta?,” I decided that I would continue to manufacture high level elite status through spend.  The retention offers I received change the equation.  In the post “The opportunity cost of manufacturing status” I calculated the opportunity cost of manufacturing Delta status by assuming that a 2% cash back card was a good alternative.  On that basis, I decided that the opportunity cost was, to me, worth the price in exchange for the elite benefits and 1.5 miles earned per dollar.  Now 3X ThankYou points are the best alternative, and that 3X ThankYou points are worth substantially more than 2%.

While I haven’t done exhaustive calculations yet, I’m convinced right now that my Forward card offers much better value than my Delta cards for non-bonus spend, except in one situation: Amex gift card deals.  Every so often, a cash back portal runs a special deal for American Express gift cards.  The best portals normally offer 1.5% cash back, but every few weeks recently we’ve seen a one day special for 2.2% or 2.25% cash back.  This is a fantastic way to increase credit card spend rewards, but not with Citibank cards.  Citi often (but somehow not always) charges cash advance fees for the purchase of Amex gift cards.  American Express does not.  So, when these specials pop up, I’ll order a bunch of them and pay with my Delta cards in order to earn the high spend bonuses offered by those cards.  That is, I’ll continue to do so until I become convinced that AA status is the way to go Smile.  See also: The complete guide to Amex gift cards.

For more about retention offers, please see this Doctor of Credit post.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Pingbacks

  1. […] Some cards have benefits that make them worth the annual fee even if you never use the card.  A great example is Chase’s $49 per year IHG card which offers a free anniversary night each year at any IHG property worldwide.  That includes properties like the Intercontinental London Park Lane where rooms routinely sell for over $700 per night.  Other cards are worth keeping because they offer great rewards for spend.  The Chase Ink Cash and Ink Plus cards, for example, offer 5X points for phone, cable, internet, and office supplies.  Since it’s often possible to buy gift cards to other merchants at office supply stores, it’s possible to extend the 5X benefit way beyond those categories.  Then there are cards worth keeping for their occasional bonuses.  Barclaycard, for example, often offers great bonuses to encourage cardholders to use their cards (see this post, for example).  And, some cards are worth keeping for their retention bonuses.  Citi, for example, often has terrific offers for those who agree to keep their cards. […]

Comments

  1. That’s quite the haul… How long have you had your Prestige? I’ve got to cancel an Exec card myself, and have had my prestige for 3-4 months… Also, isn’t it $25k spend on the US Airways card before it changes to the Aviator (mine hasn’t yet)? I know you mentioned you had met that spend requirement for the 2014 that way.

    • I signed up for the Prestige in September 2014
      I was under the impression that the US Airways card already lost the ability to earn 10K PQMs as of Jan 1 2015. Please correct me if I’m wrong!

      • I vaguely recall it being until the programs combined but I can’t find the source as I search now. Eitherway, I’ll be sure to let you know after the statement closes in a couple of days… Either way, I was able to MS the $25k cheaply enough that it wouldn’t be a huge loss if I don’t get the EQMs.

  2. Great post! I have never really given Citi TY points much thought and only card I”ve considered is the Citi AA cards.. but this post is making me rethink my points plan as well!

  3. That’s a LOT of BIS/lounge/gate time! Have you calculated your opportunity cost on an hourly basis? It’s been a while, but I rarely averaged more than about 200 EQM/hour door-to-door by MR, and often a lot less, depending on positioning flights.

    • This. Comparing MS to MR is apples and oranges. Unless you did trip reports for your blog while on the MR (there’s a dearth of domestic J reviews so could be a good niche).

    • I’m not worried about the opportunity cost of my time: as a blogger, I can work pretty much anywhere. Plus, as long as I enjoy doing it and can hopefully use the MR activity to slip in a number of small vacations, I’ll be happy

  4. I use my 5x Forward card more than any other card in my collection. That is because eating out is by far my most frequent spend category. Does Citi look at spending in determining who gets the retention bonus? Because clearly, I am not getting rid of this card.

  5. FM, I just called Citi for my old HHonors card and got a decent bonus on that one. I then asked about my Forward 5x, saying that I was looking to use this as an everyday card so wanted bonus points for other categories. The CSR entered in my information and seemed to genuinely look for bonuses, but nothing came up. I use this card quite a bit for dining out (one of my main credit card expenses), but I don’t use it for anything else. Could the fact that I didn’t get any offers be because I use this card a lot? Or maybe I should’ve been more aggressive in saying that I want to cancel? (which would be hard to believe given the frequency I use it, and the fact that I’ve had it 7 years). How often do you use your Forward? I’m trying to determine if my lack of offers is due to my frequent use, or my lack of aggressiveness.

    • Like you, I probably use my Forward card more often than any other card. I don’t think you have to threaten to cancel — I think you just got unlucky. Try again in 6 months or so to see if any new retention offers are on your account.

  6. Has anyone had any luck with retention offers from Chase? After reading Doctor of Credit’s post on this subject I have tried with multiple Chase cards and got Nada despite the fact that I’ve never asked for any bonus or retention offer before and have had all cards for a long time. Said I was going to cancel CSP which I’ve held since 2009 and she said “okay”!

    • Same happened to me with the CSP from Chase. Got no retention offer. I haven’t heard/read of anyone getting a retention offer for that card, so I think it may simply not exist. I did get a retention offer for my Marriott Rewards card (issued by Chase), but that was it. Nothing else.

  7. Luckily the annual fee for my AA Executive card doesn’t hit until April, but I just got off the phone with Citii because I wanted to get an idea of what type of retention offers were currently available. The 16 statement cycle offer was available on my account, but I’ll call back in April to see if they can offer anything better. What really annoyed me about the call though was that I had to explicitly state I was thinking of closing my account before the initial representative would let me talk to an account specialist about retention offers. Just because I’m inquiring about a retention offer doesn’t necessarily mean I’m thinking about closing my account. Frankly it’s just good financial practice in an effort to leverage a card for all it’s worth. Yeah I’ll pay the annual fee, but why pay it if they are willing to waive it.

  8. As an additional data point I was able to have Barclays waive the $89 annual fee for my US Airways Platinum MasterCard with no fuss whatsoever. They even offered me a catagory spend bonus (gas, groceries, utilities) until June. That’s on top of the 10K bonus I receive annually just for having the card.

  9. Just a data point here. I have two AA exec cards from last year as well. I put 40k+ spend on one and just the minimum 10k on the second. I called to cancel card 1 yesterday and the retention rep said because of the spending he was able to offer me a statement credit of $250 if I spent $3k for three months. For the second card, there was the usual 1k mileage bonus for 16 months if I spend $1k a month on the card. He claimed the statement credit was unusual and he hadn’t seen it before. Probably still not going to keep it but wonder what your thoughts are.

      • After my last call I had told them that I would think about it and let them know. Called to cancel yesterday and was also given a 15,000 mile bonus offer for spending 5k in three months so that’s another potential offer out there for people who might want to keep the card.

  10. Hi Frequent Miler, does Forward still have a 75k points cap? I recall at some time the cap was removed but I’m not sure now. Since I got the 3X everywhere offer, I plan to put big spending on it.

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