Personal Finance 

Citi Student Loan Rebate Reward Price Increase

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Ecstatic GraduateI’ve been doing research on the various reward catalogs of credit card companies when I discovered my favorite reward, a student loan rebate check from the Citi ThankYou Network, had gone up in price. I would routinely cite that reward as one of the main reasons I kept using my Citi card. A few short months ago, for 10,000 points, you could get a $100 check written to your student loan servicer. That came out to each point being valued at 1¢.

Now, the point prices for student loan rebate checks are (reference):

Reward Points Value per Point (¢)
$1,000 check 125,200 0.79872¢
$750 check 93,900 0.79872¢
$500 check 62,700 0.79745¢
$250 check 31,400 0.79618¢
$100 check 12,700 0.7874¢
$75 check 9,500 0.78947¢
$50 check 6,400 0.78125¢
$25 check 3,300 0.75758¢

At even the most favorable rate, it’s still at least a 20% reduction in value!

Another thing to note: the schedule as a little hitch at the $75 check mark. You get a slightly higher value out of converting to a $75 check than a $100 check, which disappears if you can wait to $250.

This is one of the reasons why I wanted to do a review of all the reward networks’ catalogs. It’s important to understand that while you may get “5 points per $1 spent,” to assume it’s equivalent to a 5% cashback credit card would be a mistake.

All good things come to an end, I suppose.

(Photo: m00by)

{ 13 comments, please add your thoughts now! }

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13 Responses to “Citi Student Loan Rebate Reward Price Increase”

  1. Chuck says:

    I’m currently using $100 gift cards to Chili’s and Marshall’s to get “par value” payouts on my Citi Forward usage. (These are places I go anyway, so they defer real dollars that I would have spent.)

    If those go away, then I’ll have to re-evaluate the value of the rewards from that card.

    For example, Discover took away all of their good double cash back bonus partners, and now it’s all high-margin crap I wouldn’t have bought anyway (like Lobster Gram … no offense intended LG, but I wasn’t likely to buy a mail order lobster in the first place), and coupons that are practically impossible to use. So the “real value” of my “double cash back” discover card is down from 2% to about 1.1%. (They have some $50 gift cards that you can buy with $45 of cashback)

    So I agree with your point. Periodically re-evaluate the worth of the credit card rewards because they hook you with a good offer, and slowly make it worse and hope you don’t notice. 🙂

    • Jim says:

      I don’t think any of the credit cards are playing bait & switch games, it’s just the nature of the system. The student loan rebate was just too attractive and I bet their metrics of redemption showed it.

  2. Le says:

    I have and use this card as well as the Thank You Network.

    Over the past several months, numerous retailer’s gift cards have been removed and those that remain have been substantially “revalued” in a manner similar to the student loan rebate checks as you noted above.

    This is a card that I am re-evaluating. Personally, I feel like it is a dirty “bait and switch” with the new Extra Cash program and suspect that we will see the Thank You Network phased out over time.

  3. Adam Jones says:

    Amex Blue Cash seems to be best rebate card around these days. I previously used Discovercard almost exclusively but I read somewhere they are changing their rebate system. Also, I never liked their cash back gift card partners….similar to what Chuck mentioned above.

  4. zapeta says:

    Unfortunately the economy and the CARD act have resulted in a big reduction in rewards. After Chase made a bunch of changes to their rewards program, I went with the Schwab Bank card that pays a flat 2% on everything.

  5. MoneyNing says:

    For those that are going to travel anyway, redeeming through the Thank You network for traveling with Expedia is still the best bang for your buck.

  6. Rick Morley says:

    Zapeta has the reason why. Once again, government meddling hurts those who actually behave. By forcing credit card companies to lower fees earned from those that don’t know how to read their credit card agreements, the CC companies now lower the benefits for those that do know how to take advantage of their cards properly.

  7. Brenda says:

    My Citibank card also cut its rewards program drastically this year. I’ve been a cardholder since 1986–enrolled in their CitiMiles program. In the past the number of points equaled the number of airmiles between flights. If the air distance was 500 miles, the number of points deducted were 500. Now they required a minimum of 2,500 points for each flight. The change has a tremendous impact on rewards–my point value is now worth 1 round-trip ticket; in past it would have generated 3 round-trips for my most common destination. To boot, I pay a $25 annual fee. Aaagh!

  8. eric says:

    Yup, I don’t have student loans so I used to use my points for fixed flight redemption. That went away months ago so my points have just been accumulating until I can get a big gift card or two.

  9. They know that students love to charge purchases like crazy. It’s worth it to the bank to buy a customer.

  10. daemondust says:

    Of course they want you to wait to bigger point values. They have more time before they have to pay the money out and get more chances for the points to expire or otherwise become invalidated.

  11. That’s very disappointing. I tend to just cash out at lower values just because I’m afraid of losing points.

  12. mppaul2 says:

    Yes the change was sad…but for me it was motivation to stop using the Citi card as the pay of student loan rewards was no longer worth it 🙂

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