In a repeat of a similar promotion from last year, Citibank is once again offering up a potential bonus of 40,000 Thank You points for new customers opening a new checking account and performing a few qualifying transactions. This offer is available until October 31st, 2013.
While Thank You points cannot be transferred to airline or hotel programs, they can still help you with your travels. Thank you points can be redeemed for gift cards/certificates from a wide range of merchants including travel partners such as Hyatt, Marriott! Thank You points can also be used for gift certs for different car rental companies including Alamo & Avis. Points convert to value on gift cards at a rate of 1 cent per point giving the 40,000 points a value of $400
Citi is offering bonus points on 3 different accounts but only the Citigold account will get you the 40,000 points. The other 2 options will only allow you a max haul of 20,000 points. You can compare all 3 of the options here on the offer page, but I am only going to focus on the Citigold account here.
What does it take to get the bonus?
To earn the 1st 30,000 points you must open a new Citigold account and do the following w/in 60 days.
- Enroll in Citi ThankYou® Rewards.
- Complete 1 qualifying Bill Payment and Direct Deposit for 2 consecutive months
To earn the final 10,000 points you must also do 1 of the following w/in 60 days.
- Download the Citi MobileSM App & log in OR
- Sign up for Paperless Statements
Details of the Citigold account:
- No opening deposit required for a Citigold checking account.
- Waive monthly service fees on your Citigold checking account by linking accounts. There’s no monthly service fee for the first two statement periods. After that, we’ll continue to waive the monthly service fee if the combined average monthly balance of your eligible linked accounts is:
- $50,000 or more for all linked deposit and retirement accounts OR
- $100,000 or more across all your eligible linked Citi accounts, including investments and loan balances, but excluding mortgage balances.
Otherwise, a $30 monthly service fee will apply
I have spoken to 2 different representatives who have both assured me that the monthly service fees will be waived automatically for the first 2 months regardless of whether or not the balance requirements are met. This should give plenty of time to set up the account, get 2 direct deposits into the account, make the 2 required bill pays, & do online statements or app to qualify for the full 40,000 point bonus.
However it can take up to 90 days from the end of the statement period in which you meet all the requirement before the points post. So there is the potential of paying a couple months worth of the fee before you see the points. But worst case scenario is I pay $60-$90 for $400 worth of car rentals or hotel stays!! Still a good deal but I suspect the points will post in less than the full 90 days.
Will Citi pull my credit?
Believe it or not, most any bank will pull your credit when you apply for a checking or savings account. Citibank is no different. Per the terms of the offer it clearly states that they may verify your identity with info from a consumer reporting agency (credit report). The big question is whether or not this will count as a hard inquiry (which affects credit) vs. a soft pull (which has no effect).
I called Citi and spoke with multiple personal bankers who all were able to confirm that Citi would pull credit. However, none of them had any idea whether it would be a hard pull or a soft pull. If anyone of you has any experience opening a Citibank checking account recently and can confirm hard vs. soft, please comment below.
Will I receive a 1099 for the value of the Thank You points?
This is a question that pops up a lot with respect to bonuses tied to checking accounts because they are governed by a different set of laws than credit cards. With bank deposit accounts such as checking accounts, the points earned are considered interest income in the eyes of the IRS and therefore could trigger the bank to file a 1099. However IRS rules do not require a 1099 to be filed unless the amount is over $600 and then it becomes mandatory to file the 1099.
Citi clearly points this out in the following excerpt from the terms of the offer:
Important Tax Information: Enrollment in Citi ThankYou Rewards and this offer limited to customers who are either citizens or resident aliens of the United States (U.S.) with a valid U.S. taxpayer identification number. The value of the rewards from redeemed Points may be reported to the IRS as miscellaneous income on Form 1099-MISC in the year redeemed, if the value of the rewards plus other taxable miscellaneous income awards received from Citibank, N.A., is in the aggregate $600 or greater for a calendar year, as required by applicable law. Customer is responsible for any applicable taxes.
So you should not receive a 1099 for the 40,000 points as they have a value of $400 as even Citi seems to agree considering that is how they advertised the value of the offer.