Citibank

Edit: For those wondering about Citibank issuing a 1099 for the value of the miles, I thought Citibank stopped issuing them in 2013. Maybe others in the comments can verify?

I’ve seen this offer come and go with some regularity but I just got an email with the latest code for this offer, so I thought I would share it. Depending on the level of checking account you open with Citibank, they will award you anywhere from 5,000 to 30,000 American Airlines AAdvantage miles if you use their debit card and meet the bill pay requirements, which are very reasonable. Here is the offer below:

In order to signup, you must use code DTTEZS60ML. Per Citibank, here are the additional requirements:

1. Open a new Regular Checking account in an eligible account package by 12/31/2014.

2. Within 60 days after account opening, complete both of the
following qualifying activities:
• Spend the required minimum amount on purchases using your Citibank® Debit Card* AND

• One qualifying bill payment from the new checking account for 2 consecutive calendar months

3. The miles will be posted within 90 days from the statement close date of the month that all the qualifying activity is met. This will be important (read below).

Now obviously the highest offer is for the Citigold but that account also comes with the highest banking fees. Here is a quick analysis of the fees per type of checking account.

Citigold Account (30,000 AA Miles) – $30 per month fee. The fee is waived if you carry a balance of $50,000 in deposit or retirement accounts OR if you carry a balance of $100,000 including deposit, retirement and investment accounts OR if you carry a balance of $250,000 including your first mortgage with Citibank. After January 1st however, the fee is waived if the balances in ONLY your checking and linked savings account are at least $50,000.
Citibank Account (15,000 AA Miles) – $20 per month fee (increases to $25 after January 1st). The fee is waived if you carry a balance of $15,000 across all deposit, retirement and investment accounts. After January 1st however, the fee is waived if the balances in ONLY your checking and linked savings account are at least $10,000 (I think is actually good news).
Basic Account (5,000 AA Miles) – $10 per month fee (increases to $12 after December 17th). The fee is waived if you link up a direct deposit and make one bill pay a month OR carry a balance of $1,500 across all deposit accounts.

Assuming you can’t meet the requirements of a Citigold account to get the fees waived what account should you signup for to take advantage of this promotion? The easy answer is the Citibank account which has a much lower requirement to get the fee waived and would entice me to move any excess money I might have that isn’t currently tied up in other investments over to Citibank. To me, the Citibank offer is worth $225 (I value AA miles at 1.5 cents each) since I would be able to shift around some money to get the monthly fee waived.

A more interesting approach to take is to signup for the Citigold account even if you can’t meet the monthly fee waived. Citibank states the miles should be awarded within 90 days of the month the qualifying activity posts so at minimum it will take 2 months (since you need 2 months of bill pay) plus up to 3 additional months though it could definitely happen sooner. My thinking is the AA miles are worth $450 to me so even if I have to pay 5 monthly fees of $30, I still net $300 on this offer. And I would be willing to bet the miles get posted in month 3 or 4 instead, so I could potentially only pay $90-$120 instead of $150 in fees.

Once the miles post, I would call Citi and ask to downgrade to the account in which I could safely meet the requirement to get any fees waived. There is nothing in the fine print that states how long an account has to be open so I interpret this that once the miles post, they will not be taken back if I downgrade or even close the account. This option returns the most value to me based on my valuation of AA miles.

If I couldn’t get the fee waived on any account (or even if I could get them waived on the Basic account), I would still signup for the Citigold account over the Citibank or Basic account. If you can get the fees waived on the Citibank account, the spread is much closer ($300 in value vs $225) so if you value the convenience of not having to close or downgrade your account later on, maybe going with the Citibank account is right for you. I really don’t see the purpose of the going with the Basic account as the bonus is quite small ($75) and not worth the effort for me to even setup the account and meet the requirements.

What account are you signing up for?

I like to apply for credit cards about every 3-4 months or when there is a great, limited time offer. I generally apply for all my cards in one day as long as I am comfortable that I can meet the spending requirement on all of them. Before I go any further, I want to point out that what I applied for is not recommend for everyone and certainly not beginners. If you are new to this hobby, there are many cards you should get before even sniffing some of these (except for maybe the Arrival plus). I did what works for me, as I’ve already had almost every big travel credit card there is in this game, so this round of applications was about cleaning up and getting cards I haven’t had. Without further ado, here is what I applied for, my thoughts behind each card and how I will earn 322,500 points & miles in the next few months.

I will list them in the order I applied for them, in the order of most important to me to least.

1) Barclays Arrival Plus – I actually first applied for this card in back in August 2013 and until this day, it was the only credit card I have ever been denied for. No matter how many times I tried a reconsideration phone call, Barclays would not approve me back in 2013 as they were concerned about too many recent inquiries. A new year though, brought better luck as I was approved instantly for this card.

This is actually a cash back card but its the most useful for travel hackers as you earn 2% back on all spending every day, all day. It offers 40,000 points for spending $3,000 in 3 months but the perk to this card is that when redeeming for travel, you get 10% of the points back in your account! So if I redeem 20,000 points to cover a $200 flight I don’t want to pay for, my net point cost is actually 18,000 as 2,000 points will be placed back into my account immediately to use on a future travel expense.

This card is good for times where it doesn’t make sense to use traditional points or miles to pay for a flight or hotel but you still want a “free trip”. You can simply put the charge on this card, reimburse yourself with points (up to 120 days later) and you get 10% of the points used back in your account. You also get chip & pin capability, no foreign transaction fees and access to your real FICO credit score included. Not too shabby for a cashback card.

Summary: 40,000 points (worth up to $440 in free travel, factoring in 10% rebate). $89 annual fee waived for first year.

2) Chase Ritz-Carlton Rewards Credit Card – As stated above, I like to apply for cards every 3-4 months or when there is a limited time offer and this card qualifies as a limited time offer as it offers 140,000 Ritz Carlton points for spending $2,000 in 3 months. This offer is only available by applying via phone at 1-888-846-7004 and you must give them this offer code “F5BP” to get this offer. There is also an offer for 70,000 points but with the annual fee waived using offer code “F53K”. I was not instantly approved, it was marked as “pending” but after a call to the reconsideration line, I was approved.

In addition to the 140k Ritz Carlton points, which could be used for several free nights at Ritz Carlton or Marriott hotels (since they are partners), you will also receive $300 in airline travel credits each calendar year, Ritz Carlton Gold Status for the 1st year, Lounge club access in airports and 3 Ritz Carlton upgrade certificates. The biggest perk is the $300 airline travel credit, which is meant to cover baggage fees, seat upgrades among other fees but can unofficially be used to buy airline gift cards. It is not meant to cover airline gift cards (just like the Amex Platinum card) but this thread on Flyertalk suggests its possible. I’ll consider this $600 in airline gift cards for me in the first year of membership since it will span two calendar years.

Summary: 140,000 points + $600 in airline gift cards + other small benefits mentioned above. $395 annual fee NOT waived for first year (but with the points and $600 in gift cards I obviously come out way ahead).

3) Bank of America Virgin Atlantic World Elite MasterCard – I broke the news on the increased offer on this card two weeks ago and the increased signup bonus timed well with my round of applications so I added it to my applications. Even though the offer posted is for 90,000 miles, it requires you to spend $25k in one year on the card which I won’t do. I broke down the details of this offer here and it requires you to spend $12,000 in 6 months for 75,000 miles (assuming you add 2 authorized users) or you can get 82,500 miles if you spend an additional $3,000 in the first year. This is what I plan on doing, so I considered this a 82,500 signup bonus. I was actually denied for this card but after a call to the reconsideration line, I was approved (there will be a future post with more about this).

Virgin Atlantic miles aren’t the most useful since they are have a limited route network to/from London and they tack on fuel surcharges which can be several hundred dollars . However, the miles are useful for going to London in economy (only 17,500 miles + $98 in taxes/fuel surcharge) but don’t use this option for departing London since the taxes are much higher. Other useful redemptions include using them for flights on Virgin America, Hawaiian Airlines and transferring to Hilton at a ratio of 1 Virgin Atlantic mile to 1.5 Hilton HHonors points).

90,000 Mile Virgin Atlantic Offer!

Summary: 82,500 miles. $90 annual fee NOT waived for first year.

4) Citibank Hilton HHonors Visa Signature – I will fully admit this card is far from great and is probably one of the weakest cards I’ve ever signed up for. It offers only 60,000 Hilton HHonors points which may sound like a lot of points but with Hilton’s devaluation last year, that isn’t worth much. The upside is there is no annual fee on this card, so I can keep for it forever to help with the average age of my credit accounts, and it gives Hilton Silver status. That doesn’t help me since I already have Gold status from the Hilton Reserve credit card but its a nice fallback in case I ever cancel the Reserve card. I was actually denied for this card but after a call to the reconsideration line, I was approved (there will be a future post with more about this).

The reason I don’t recommend this card to many of you is 60,000 Hilton HHonors points don’t even cover a free night at a high end Hilton hotel (it will only cover one free night a mid-tier hotel or several nights at a low-tier hotel). There are so many better hotels cards and even Hilton cards to apply for before this one. The reasons I applied for this card is I have had pretty much every other Hilton credit card and these 60,000 points will push me up to about 240,000 HHonors points so I should be able to do something decent with those points. Additionally, this was a limited time offer that expired on 9/1 so if I ever was going to apply for it, it might as well be when the signup bonus is at its highest.

Summary: 60,000 points. NO annual fee.

Total Summary: 322,500 points + $600 in airline gifts cards for annual fees of $485 in the first year for signing up for four credit cards.

In closing, this was a very successful round of credit card applications as I got to acquire a few of the “second tier” credit cards that I never had and I timed it right that I ended up with the highest ever offers on 3 of the cards. It gives me some traditional points and miles but also the flexibility of points from a cashback card that will cover my travel expenses when it doesn’t make sense to use traditional points and miles.

*Disclaimer – NO affiliate links were used in this posting. I do not have any nor will I as it is an inherent conflict of interest with my consulting services. If you have questions on applying for credit cards or want to know what is the best card(s) for you, email me at ralph@pointscentric.com or contact me via the consulting services page.

PointsCentric

Points & Miles Travel Consulting

Earn Up to 30,000 American AAdvantage Miles for Opening up a Citibank Checking Account