Citi devalues cash back redemptions – sign of things to come?

It’s devaluation season: First, Hilton and now Citi has devalued cash back redemptions. Currently, you can redeem Citi ThankYou points at 1 cent each towards cash back. But starting August 24, 2025, that drops to 0.75 cents a point.

In other words, 1,000 Citi ThankYou points will be worth $7.50 instead of $10.That’s a 25% drop in value. Not a big deal for those who like to transfer points to Citi’s travel partners, but quite a hit for folks who like to use their points to off-set expenses.

Everything is getting more expensive, so people are increasingly dipping into their rewards to pay for everyday expenses. If that’s you, I recommend downgrading your ThankYou-earning credit card to a cash back card (i.e. Citi Double Cash) so you’ll at least avoid an annual fee.

Seeing a pattern

Last week, Hilton increased its top-tier redemption level from 150,000 to 200,000 points per night – without notice. That’s going to make saving up for the Waldorf Astoria Maldives a lot tougher.

Citi devaluing cash back redemptions is an interesting move. Normally, devaluations happen with currency inflation and overuse. Following that logic, I can’t help but wonder if cash back redemptions were on the rise and Citi decided to get ahead of things before it became unprofitable.

But I wouldn’t expect this to be the only devaluation we see this year. If anything, it’s probably a preview of what’s to come. Belts are tightening, and we’re already seeing an increase in award rates for programs like ANA Mileage Plan and Southwest Rapid Rewards.

What can you do about devaluations?

There’s not a whole lot we can do about devaluations, whether it’s Citi or our favorite rewards programs. Devaluations are entirely at the discretion of loyalty programs. But we can take a few steps to protect our valuable rewards:

• Diversify your points portfolio.
• Explore lesser-known foreign rewards programs that might offer better value than domestic airline programs.
• Start using flexible rewards to pay for travel. At the rate things are going (devaluations + limited award inventory), you might get better value from your points by using them through a credit card rewards portal.

Final thoughts

Citi ThankYou points are still valuable, especially if you transfer them to airline and hotel loyalty programs. Cash back was never going to be the best use of your points. But with all these other devaluation trends, it’s definitely worth being aware that devaluations can happen at any time. Citi is giving three months advanced notice here, but other programs haven’t done the same.

This is far from the points apocalypse, but definitely a sign that things are always on a downward trend in the loyalty space. Programs will devalue, perks will get downgraded. All you can do is milk the cow while it’s still possible and prepare for a drought. In other words: Earn and burn.