Downgrade Citigold Account to Basic Account

Last year, I applied for the Citi Prestige card with a 60,000 point signup bonus and over the past year, I’ve made great use of the some of the features of this card including the $250 airline credit, 4th night free, AA lounge access and more. In fact, one of my top posts from last year was why I thought the Citi Prestige was better than the American Express Platinum card – something I still believe to be true.

Anyway, the annual fee on the Citi Prestige is a hefty $450 annually though if you are a Citigold checking customer with Citibank, you get a reduced annual fee of $350. Last year, I was a Citigold member for about 3 months when I signed up for a Citigold account to earn 30,000 American Airlines miles and then I immediately downgraded my account to a Basic checking account (no fees if you keep a daily average balance of $1,500) once the miles posted. When the annual fee on my Citi Prestige became due this month, it should have been $450 since I was not a Citigold customer anymore but instead I was still charged the reduced annual fee of $350.

$350 Reduced Annual Fee

I have been speculating that this exact scenario was going to happen with the reduced annual fee and I’m glad I was ultimately correct. The reason I knew this had a decent likelihood of happening was that every time I called Citibank about the Citi Prestige card, I was thanked for being a Citigold customer, even though I was really no longer a current Citigold account holder. There is some sort of glitch in Citibank’s system that shows my Basic checking account which was a Citigold account, as an active Citigold account to Citibank representatives and is linked to my Prestige card resulting in the reduced annual fee.

This is my only Citibank bank account

Many of us became Citigold customers at some point in the last 12 months due to the various great offers for a Citigold account including 50,000 AA miles or Thank You Points at the peak. Unless you planned to keep a large amount of money in the account, most people downgraded their account to a Basic checking account or closed their accounts completely. If you happened to convert your Citigold account to a Basic account and it is still open, you should be able to get the reduced annual fee on the Prestige card.

I’ll happily continue to park $1,500 in my Basic checking account instead of a savings account if it continues to save me $100 every year on this card. I am keeping the card as after the $250 airline credit (which I will use to buy domestic flights I would normally pay for anyway), I am effectively paying $100 for AA lounge access, Priority Pass lounge access, the 4th free on hotel stays, and more which is a good value to me. I do think Citibank will catch on at some point and fix this glitch but let’s hope I’m wrong on this!

I have some good news to share in regards to the 30,000 American Airlines miles promotion that Citibank offered earlier this year for opening a Citigold account. As I’ve mentioned previously, my plan was to wait until the 30,000 AA miles posted and then immediately downgrade my account to a Basic checking account to avoid any fees. In order to waive the $30 monthly fee for a Citigold account, you need to hold $50,000 in the account and that wasn’t an option for me.

The first bit of good news is my 30,000 miles have finally posted to my AA account on 5/14 (though they were backdated to 5/11 as I have been checking daily). I funded the account on 2/11 so it took a little over 3 months for the miles to post.

Since my goal was to get the miles as quickly as possible (again to avoid any fees), I completed the requirements which were $750 in debit card purchases and two months of bill pay pretty quickly. To do this, I loaded $750 to my RedBird card at Target (you can still do this with RedBird) and paid my wife’s car loan for two months. Below is my whole account activity for the 3 months the account has been open. As you can see, I did the bare minimum to meet the requirement for the bonus and I never was charged a monthly service fee. Citibank does automatically waive the fee for the first two months but I have no idea why I wasn’t charged for April.

The other good bit of news I have to share is that I was able to easily downgrade my account to a Basic checking account just days after my miles posted. In fact, I was able to do it in 7 minutes over secure chat with Citibank! I’ve copied my whole conservation (except for the 3 long statements the rep sent me) to show you just how easy it was.

My account is now a Basic account and as long as I keep $1,500 in the account, I will not be charged any monthly fees. Interestingly when I called in with a question on my Prestige card, I was still recognized as a Citigold account holder (which is expected for now per the rep’s comments). From what others have said, reps still see the account as a Citigold account even after this transition period lapses and I hope this remains the case. I’m curious to see what will happen next year when my Prestige is due for renewal as I would love the $100 discount on the annual fee again for being a Citigold account holder.

I’m very happy I took advantage of this deal as for just the tiniest bit of work I was able to score 30,000 AA miles plus another 2,000 Barclay Arrival points for funding this account with a credit card when I opened it. All of this came without any out of pocket costs so these were truly free miles. I plan on taking advantage of the 30k AA offer for my wife when she gets her next AA card (per Doctor of Credit both the 30k AA and 40k TYP offers are currently available so I could go for the 40k TYP now but I’d rather have the AA miles) and I will be much more aggressive in funding the account with a credit card (i.e more than just $1,000).

Have others seen their miles post and downgrade their account successfully?

PointsCentric

Points & Miles Travel Consulting

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