Redeeming Citibank Checking ThankYou Points
Last year my wife and I (along with many of you) took part in the very generous Citigold promotions going on. I personally signed up for the bonus giving 50,000 AAdvantage miles while my wife opted for 50,000 ThankYou points. It took many many months to get my bonus to post and even longer for her bonus to post.
Fortunately I was able to get Citi to waive the $30 monthly Citigold fee for almost every month because of the delay, but that isn’t happening anymore. Additionally, my wife just signed up for her own Citi Prestige, so she was able to get the reduced $350 annual fee as well. In other words it is time to shut ‘er down, because we simply aren’t using the account.
Cashing the Points In
In addition to the 50,000 point bonus, my wife accumulated 500 more points from other things like bill pay, etc. I think it should have been more, but I decided it wasn’t worth the hassle to audit the account. So I went to shut it down, but I had to do something with the points. Here were my options:
- Transfer them to another one of our ThankYou accounts where they will expire in 90 days. (Note: They cannot be transferred to travel partners.)
- Redeem them for gift cards and/or merchandise.
There is one other consideration with these points. Since they were earned from a bank account and not from a credit card, they can trigger a 1099 if you receive more than $600 worth of value from them. So if for example I transferred them to my Prestige ThankYou account and redeemed them for 1.6 cents each, then I would get $800 value and a possible 1099.
Disclosure: I am not a tax professional and thus am only talking in generalities. Consult your tax professional for advice about bank bonuses and how they are taxed.
Now I do realize I could have transferred over some points and redeemed them at the 1.6 cents value and redeemed others at a lower value in order to squeeze out as close to $600 as possible, but that is complicated. I wanted simplicity and so I cashed them in for gift cards at 1 cent each which is something I would never do otherwise with ThankYou points.
Finding the Right Gift Card
Since I do a fair amount of reselling, I looked for gift cards to merchants where I shop often, but there is another factor to consider. I can normally buy gift cards for many of these merchants at a discount of 10-20% off of face value. If I redeem these points, then I must value that redemption with the same discount. I thus looked for a merchant where I cannot often get a good discount on gift cards.
Thankfully, the ThankYou portal lists Best Buy gift cards as one of their options. Best Buy gift cards are rarely discounted more than a couple of percent and they have a high re-sale value. This means that my points lost less value when redeeming them compared to if I had used them for a Kohl’s gift card for example. So I purchased 5 X $100 Best Buy gift cards for 50,000 points and was happy about it.
Burning Off the Last 500
Since I still had 500 points left that I didn’t want to waste, I decided to do something noble. Citi allows you to Donate the points to charity at a value of 1 cent each. That sounded good to me, so I linked my ThankYou account to PointWorthy (the service they use) and tried to donate $5 to Give Kids the World. (A truly AMAZING charity.)
Unfortunately, they didn’t want to take my $5. When I tried to redeem the points, the site said the minimum was $10. You would think they would let you kick in the difference with a credit card, but I couldn’t find that option. In the end I had to settle for using bill pay to liquidate my points at a terrible value. $3.25 for 500 points. Don’t worry though, I went ahead and made a Give Kids the World donation in a much greater amount directly on their site.
While I am all about maximizing everything and often write about ways to do it, for me the simplicity of redeeming these points for gift cards couldn’t be matched. I don’t have to worry about them expiring and I will get close to the full value out of them. $500 for signing up for a Citi account (plus the rewards from funding it) ain’t bad.