Just about every hotel chain offers at least one co-branded credit card, with many super-chains offering as many as 4 different cards. So let’s look at this category of cards and answer a few questions:
Why do hotels offer these cards?
Why do some offer so many different card options?
What benefits do these cards provide for the cardholder?
What other cards (or types of cards) match well with hotel cards?
Who is a good match for getting a hotel credit card?
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Hotel chain loyalty programs exist to (surprise!) foster loyalty among their customers. With so many hotels often located close together, a hotel chain with a robust loyalty program encourages customers to pick one of their hotels, even if another hotel might be a bit cheaper or closer to their ultimate destination, by offering reward earning towards free nights, perks for loyalty, and incentives to stay with the chain more often. Credit cards are a sensible extension of loyalty programs, because they are a further commitment from a customer to a particular brand, and allow the hotel chain to capitalize on their customers’ spending even when they aren’t at the hotel.
So why offer so many different cards?? For example, Marriott’s Bonvoy loyalty program offers 4 different cards across 2 issuers (Chase & Amex), which is also unusual. They have a no annual fee (A tier) personal card, personal and business B tier cards, and a personal D tier high annual fee card. In this way, they first compete with other brands like Hilton in their level of offerings, and they also succeed in catering to various different income and spending levels. Each card has a different target audience, ranging from low-spending, infrequent travelers who want to fund a vacation every once in a while, to power-users who travel frequently and would like to fund a vacation every year, or even more often!
The types of benefits to expect with hotel credit cards are pretty varied, but I organize them in four main categories: status, points earning, credits, and free nights.
Status
Most cards, even $0 annual fee ones, provide some status, albeit the lowest level of status. One card, the Hilton Aspire, even grants the top Diamond status with the chain, and there are many more cards with status that falls between. Status allows you benefits from the hotel that you would otherwise acquire only through frequent stays. These benefits can include a free cookie when you check-in, free high-speed internet, and free continental breakfast.
Points Earning
Points earning varies wildly from card to card. Points spending refers to the points benefit you get in different categories of spending, such as groceries, gas, hotels, etc. In most cases, hotel cards don't offer very competitive points earning on any categories other than spending at the cobranded hotel chain. Generally speaking, hotel points are just not as valuable as other points currencies, such as Chase Ultimate Rewards Points. For example, paying for a $1,000 hotel stay on a Marriott credit card will earn you 6,000 Bonvoy points, worth something like $30-$45 based on how they are converted on later hotel stays. Putting the same stay on your Chase Sapphire Reserve will earn you 3,000 Ultimate Rewards points, worth $45 in Chase’s portal, or $60 or more when transferring. This is because although you earn 6 points per dollar on Marriott spending, the value of that point is so much lower than the value of a point earned through Chase and you can only earn the 6 point rate on spending with Marriott, not other categories. The IHG and Hilton cards do generally okay with base earning rates of 3 points per dollar on all categories, making up for the fact that the points are only worth about a half cent.
Credits
A few cards offer credits that help offset the annual fee on the card, such as the Marriott Bonvoy Brilliant’s $300 per year Marriott credit. This means, with basically one trip per year where you use the $300 credit, the annual fee effectively is reduced to $150 ($450 fee minus $300 credit).
Free Nights
The last benefit, free nights, is the most useful, and really why people should have hotel credit cards as a part of their credit card plan! Usually only available on cards with annual fees, free night certificates are a surefire way to make a card worth the annual fee. Some free nights are available just for holding the card, while some require you meet a spending threshold to earn the credit. In my opinion, the spending thresholds for some cards are almost always too high to make sense, when that spending could be put on another card with better earnings.
Free nights benefits from credit cards are usually in the form of emailed certificates that you can redeem within certain parameters for one free night’s stay. Some hotels waive all fees with free nights, while some require you still pay a bit, such as taxes or resort fees. And some free night certificates are limited by a points value cap or by day of the week. Even with all of these limitations, though, it’s typically pretty easy to get at least a $200 night stay out of these certificates, sometimes getting a free stay up to $500, $700, or $900 at certain times.
With hotel cards being pretty specialized to the hotel brand they are associated with, they pair well with many other cards, and usually don’t make good single card systems. This means a hotel card acts as a benefit on top of other cards on your credit card team, rather than just working on its own. Surprisingly, hotel cards actually pair well with each other depending on the amount of travel you do. For example, if you are in hotels about 25 nights per year, you could spend them all at one brand and likely earn enough points for around 2 free nights per year and earn mid-level status without having any hotel credit cards. Alternatively, you could hold hotel credit cards from 4 or 5 different chains, have mid-level status with every one of those chains, and have 4 or 5 discounted nights (because you’re still paying an annual fee), plus an average of 2 free nights per year worth of points (which might just be 1 night every 2 years, at 4 different chains). Obviously, holding the cards rather than simply staying at one hotel chain consistently without credit cards grants you far more benefits. Another good pairing with a hotel card is a good base-earning card that earns some flexible currency which can be used for airfare, like the American Express Gold or Chase Trifecta.
So, who’s a good match for a hotel card? Anyone who travels at least once per year. It’s a low bar to clear! Just about anyone could get value from some level of hotel card, and some quantity of hotel cards. You don’t have to be like us and have 6 hotel cards for a 2-person household, and could just get one card that makes sense for you and matches your favorite brand, or your favorite vacation destination! You could also go much further and have over a dozen hotel cards if you are traveling frequently, and can find the time and ability to use so many benefits. This is honestly a pretty overlooked category of card, in my opinion, but it offers high value, and is a great place to start expanding your credit card team.
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