Citi Lets Cardholders Make Minimum Payments With Rewards

Citi is making it easier for some of its credit cardholders to pay their monthly bills during the pandemic. Eligible Citi customers can now use previously earned rewards to make their minimum payment should they prefer or need that option. According to the Federal Reserve credit card delinquencies grew 9 basis points between Q4 2019 and Q1 2020, though delinquencies fell in the second quarter to 2.42%, likely due to less card spending and economic relief payments from the government.

Kew Takeaways

  • Citi is now allowing some cardholders to use their rewards to make their minimum monthly payments.
  • Other card issuers, including Chase and Capital One, have also changed their rules as a result of the COVID-19 pandemic and economic crisis.
  • If you redeem your Citi rewards this way, however, you will get less value for them than you could otherwise.

How the New Rules Work

Through Nov. 7, 2020, Citi customers can use ThankYou Points or cash back earned from a Citi credit card to make their minimum monthly payments. Normally, cardholders can use rewards for a statement credit, but they would still need to pay the minimum amount separately.

If you redeem your ThankYou points this way, they’re worth 0.8 cents each, which is lower than the standard 1 cent per point you can get when you buy gift cards, book flights, make student loan or mortgage payments, or get cash back through the ThankYou Rewards center. You could potentially get even more value if you transfer your points to one of Citi’s airline or hotel transfer partners.

The move by Citi provides some extra flexibility for consumers who are sitting on a lot of points but struggling financially due to the COVID-19 pandemic. It also shows an effort to match other major card issuers, which have loosened their rules to allow more flexibility.

For example, Chase’s Pay Yourself Back feature allows Chase Sapphire Preferred and Chase Sapphire Reserve cardholders to use rewards to get cash back at a rate of 1.25 cents and 1.5 cents per point, respectively, through Sept. 30, 2020. Also, Capital One is allowing select cardholders to use their miles to pay for food delivery, takeout, and streaming services through Sept. 30, 2020. 

However, the decision also likely benefits Citi. The current economic crisis has caused credit card issuers to seek ways to limit their exposure to risk, such as reducing credit limits, dropping balance transfer offers, and tightening underwriting criteria.

This promotion is a good opportunity for Citi to get some liability from its flagship rewards program off its books at a rate that’s lower than the maximum value that cardholders could otherwise get.

What Citi Cardholders Should Do

If you have a Citi credit card and have no other means to make your minimum monthly payment, using your ThankYou points at a discounted rate isn’t ideal, but it could keep a late payment from damaging your credit score, which would have a long-term impact on your finances.

Even if you can make the minimum payment with your own money, it may still be worth considering using rewards and saving that cash for emergencies instead.

If, however, your job situation is secure and you have enough money in your emergency fund, you’ll benefit more from using your ThankYou points for more valuable redemptions.

To find out if you’re eligible for the promotion, log into your account online or from the Citi mobile app and review your redemption options, or call the number on the back of your credit card. If you are not a current Citi cardholder and wish to explore new card options we invite you to review our list of what we believe are the best Citi cards.

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