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*Disclaimer: This article is accurate as of the publish date September 30, 2014
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In the old days, most travelers utilized a travel agent, which was much easier than trying to call every airline and every hotel themselves. These days, travelers do have online access to airline and hotel web sites, but many still prefer to compose their journey's using a single online travel agency.
Expedia is one of the largest online travel agencies, and those who use their site now have the option of earning additional travel rewards by using one of the new Expedia+ cards from Citi.
I recently spoke with Ralph Andretta, Head of Product Management for Citi Cards, about this new card. He indicated that this enhanced partnership with Expedia, which replaces an older credit card offer, is part of Citi's new focus of co-branded partnerships with its partners.
How These Cards Work
The Expedia®+ Voyager Card from Citi lets customers Earn 25,000 Expedia+ Points after meeting purchase requirements*. These points are worth $175 towards reservations at most hotels, but $350 towards a selection of 1,400 different luxury properties in their +VIP Access hotel collection.
When using this card, customers receive4 Expedia+ points per dollar on Expedia, 2 Expedia+ points per dollar on dining and entertainment, 1 Expedia+ point on other purchases. Other benefits include a $100 annual statement credit towards airline fees, Wif-Fi costs, or an application to the Global Entry program, which allows expedited customs on arrival to the United States, as well as admission to the Pre check lines with TSA.
Cardholders will also enjoy Gold status in the Expedia+ program which offers free discounts and amenities as the +VIP Access hotel collection such as room upgrades and flexible check-in and check-out (when available). Gold members will receive a 30% bonus on their base rewards from the Expedia+ program (in addition to credit card rewards), as well as have access to a dedicated team of customer service agents. There is a $95 annual fee for this card, and no foreign transaction fees.
For those not interested in paying an annual fee, Citi is offering a no fee version of this card that grants Silver status. This version lets cardholders Earn 15,000 Expedia+ bonus points after $1,000 in purchases within 3 months of account opening*. It also features 3 Expedia+ points per $1 spent on eligible Expedia purchases, 1 Expedia+ point per $1 on all other purchases. This card does not offer the $100 annual statement credit or the anniversary bonus, and also comes with a 3% fee for all foreign transactions imposed on all charges outside of the United States. Finally, both cards feature EMV smart chips in order to ensure compatibility with the next generation of credit card terminals already being deployed in Canada, Europe, and other parts of the world.
Evaluating This New Competitor
These new Citi credit cards enter an extremely competitive market for travel rewards cards. To determine the value proposition of these cards, we first have to figure out how much their points are worth. Expedia+ points are worth about 0.7 cents each as coupons towards most hotels ($25 coupon for 3,500 points), but 1.4 cents each for awards in their VIP hotel collection, where customers receive additional perks and amenities.
The value of these points rests in the value of staying at one of these VIP+ hotels, otherwise the rewards earned from most purchases are worth less than one cent per dollar spent, which is very un-competitive in today's market. Even rewards that are worth 1.4 cents each are not the most competitive, especially in light of Citi's new Citi® Double Cash Card – 18 month BT offer that offers two cents per dollar spent in the form of cash back rewards.
At the same time, this card can be very valuable when used at restaurants and for frequent customers of Expedia. Restaurant and entertainment spending offers reward points that are worth 2.8 cents at the VIP hotel collection, and eligible Expedia bookings offer an outstanding 5.6% back towards rewards at those preferred properties. This means that an occasional business traveler who spends $10,000 a year would earn $560 worth of coupons for the VIP+ hotel collection.
In addition, that person would earn another 5,000 points as an anniversary bonus and an additional 30% base points in the Expedia rewards program. So the combined total could equal significantly more coupons for hotels in the VIP+ program. Finally, Expedia customers can also earn frequent flier miles and rental car rewards points, although most hotels do not award points for stays booked through online travel agencies. The standard, no fee Expedia+ Card is best for those who use Expedia occasionally, as they will enjoy a healthy 4.2% back in rewards towards the VIP+ hotel collection.
While I wouldn't call this card a game changer for the industry, it is an innovative product that is a must for frequent customers of Expedia.
*Editorial Note: This content is not provided by Citibank. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Citibank.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.