Analyzing a Credit Card: A Review of the Citi Forward

The Citi Forward credit card was recommended to me by a friend crowing about its 5% back on bookstores and restaurants. After going through the fine print I can safely say that there’s no 5%, but it’s still a credit card you might want to check out. Updated.

A Look at the Citi Forward

The Citi Forward is one of the more recent cards to hit the credit scene, making a lot of big promises:

• 5 ThankYou Points for purchases at bookstores, music stores, movie theaters, video stores, and restaurants
• 1 ThankYou Point for all other purchases
• 100 ThankYou Points for paying on time and not going over your credit limit
• 6000 ThankYou Points after $250 in purchases (within 3 months)
• 2500 ThankYou Points after signing up for paperless billing
• No annual fee
• 0.25% APR reduction after 3 months of paying on time and staying under your credit line

That’s quite a mouthful. But is the Citi Forward worth it? And what the heck is a ThankYou point?

We should probably start out by calculating just what 1 ThankYou point is worth. Since we’re not dealing with an actual cash rebate here, the value of a point actually depends on how you choose to apply your points. Looking at the ThankYou Rewards site, your best bet is a gift card – provided you spend it somewhere you’d normally pay cash or credit. Here’s the point redemption for cash/cash equivalents:

Gift Cards	$25 for 3500 Points
Cash	$50 for 8000 Points
Statement Credit	$100 for 14500 Points (there are multiple tiers here, but this is the middle-of-the-road option)

So that means…

1 ThankYou point = $0.00714 in Gift Card Dollars
1 ThankYou point = $0.00689655 in Statement Credit
1 ThankYou point = $0.00625 in Cash

As you can see, gift cards give you the most bang for your points. And now that we have a baseline, we can figure out what percentage you actually get when you get 5 ThankYou points by purchasing at bookstores, music stores, movie theaters, video stores, and restaurants:

For a gift card, 5 ThankYou points = 0.0357 = 3.57%
For a statement credit, 5 ThankYou points = 0.3448275 = 3.45%
For cash, 5 ThankYou points = 0.03125 = 3.125%

When you buy something at one of the 5 ThankYou point stores, you’re getting anywhere from 3.125 to 3.57% back, depending on how you spend the points. And now let’s compare that to a few other credit cards:

	Bookstores	Department	Gas	Groceries	Movies	Restaurants	Travel	Video
Costco Amex	1%	1%	3%	1%	1%	3%	2%	1%
CapitalOne No Hassle	1%	1%	2%	2%	1%	1%	1%	1%
Discover More	1%	5%*	1%	1%	1%	5%*	1%	1%
Citi Forward	~3.35%	1%	1%	1%	1%	~3.35%	1%	1%

* 5% in rotating categories, Oct-Dec is 5% Department Stores and Restaurants
~ It’s actually between 3.125% and 3.57%, but I averaged it together to save space

Incidentally, one nice benefit of the card is getting those 5 ThankYou points (aka the 3.125%-3.57%) on Amazon.com purchases. Besides the Amazon Rewards Visa (which is not too shabby), I can’t think of any other card that gives rewards on Amazon purchases. It’s probably this card’s biggest strength.

Update! It seems that the ThankYou rewards program occasionally has certain $100 value gift cards for 10,000 points. In this case, you’d be getting the full 5%.

APR and Penalties

The Citi Forward has an introductory 0% APR on purchases for 7 months, and 12.99%-19.99% variable APR after that. However, miss a payment and you’ll find yourself facing up to 29.99% APR.

Every quarter that you pay on time and stay below your credit line, you get a 0.25% reduction in APR. This bonus tops out at a maximum of 2%.

There’s also a 3% charge on purchases made outside of the USA.

The Good

• Amazon counts as a bookstore, which means you get 5 ThankYou points. This beats the Amazon Rewards Visa, which would give you the equivalent of 3% cashback. With the $100 for 10,000 points promotion, you can get 5% back, an unheard-of return on Amazon purchases.
• The signing bonus for spending $250 in three months and signing up for paperless statements is 8500 points, or $50 cash.
• You get 100 bonus points each month for paying your bill on time and staying under your credit limit.
• It’s a Visa, which means it’s accepted pretty much everywhere.

The Bad

• Don’t be fooled into thinking the 5 ThankYou points is 5% back. It’s actually 3.something percent, depending on how you cash out.
• The 0.25% APR reduction bonus has a maximum discount of 2% over the lifespan of the card.
• Remember, this is a rewards card, NOT a rebate card. So you can only cash out your points once you’ve earned enough for a reward.
• You get 1 ThankYou point for purchases that aren’t at the above stores. That isn’t equal to the 1% you’d get from, say, the Costco Amex or even the Chase Rewards card – it’s more like 0.625%.

Bottom Line

The Citi Forward is a solid complement to your credit card collection. On its own, the Forward ain’t bad, but you’ll probably just end up using it for restaurants and the odd movie ticket or purchase at Amazon, since regular purchases give you far less than the standard 1% rewards points.

Citi Forward Credit Card