As many of my readers know, Citibank is among the most aggressive when it comes to retention offers. In fact, I always call the retentions department about a month before my annual fee is due. More often than not (about 80% of the time) Citi offers me a bonus offer to keep my card. Of course sometimes my threat is real and I do want to cancel my card, but occasionally I am leaning toward keeping my card and I’m looking for an added bonus to make paying the steep $85-$125 annual fee worthwhile.
Most recently I called to cancel my Citi American Airlines AAdvantage Visa Platinum card, which I was approved for in August 2011. I told them that I was using another card more often and didn’t care to pay two annual fees. The rep was very understanding and not only waived my $85 annual fee, but also offered to give me 750 bonus AA miles for every month that I spent $750 on my card for the next 12 months. Of course I accepted this offer. I did think that this was a very smart offer on Citi’s part because a) It would cost them much more to acquire a new customers, b) The monthly spend requirement would get me into the habit of using the card, and 3) They would make money on the transaction fees offsetting the cost of the additional miles they gave me. In fact, if I spent more than $750 they would make out pretty well with this offer.
Fast forward a few months and Citi just sent me an offer where I can earn 3x miles per dollar on restaurant, drugstore, gas, and grocery purchases paid for using this card through the end of September (up to 2,500 miles, which translates into $1,250 in spend). If you add the 2x miles per dollar I am getting for the retention bonus, I’m earning at total of 4 miles per dollar on purchases in these categories. Of course the Chase Freedom card is offering 5x Ultimate Rewards points (which can be transferred to Hyatt, Marriott, United, Southwest, and other programs, since I also have the Chase Sapphire card) per dollar spent on restaurant and gas purchases, but the bonus is capped at $1,500 in spend this quarter (July – September), so once I hit the spend limit on that card, I’ll transfer those purchases over to my Citi AAdvantage Visa card.
Most people will say it’s too much trouble to swap cards out to earn these bonuses, but think about it this way. For the minor inconvenience of using both my Chase Freedom and Citi AAdvantage Visa for restaurant and grocery purchases for the next two months, I will earn 7,500 Ultimate Rewards points (basically United miles) and at least 4,800 AA miles, a total of 12,300 miles, which is almost half way to a free domestic round trip flight, which I value at about $200. I don’t think there is an easier way to earn $200 free for one 5 minute phone call and paying attention to what card you use for restaurant and supermarket purchases for the next month or so.