Is it worth it to get a hotel credit card? My answer to that questions is generally yes, but there are a few factors to think about before putting in that application, such as the type of sign-up bonus you need and what type of hotel perks you’re interested in. In this article, I’ll take a closer look at some of the factors that you’d want to consider.
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The basics
When you get a “hotel credit card” you’re applying for a co-branded card issued by a bank that’s worked out a partnership with that particular hotel loyalty program. Typically, only a single bank will partner with a hotel loyalty program but that’s not always the case (see: Citi, American Express, and Hilton).
You can use these hotel credit cards at any merchants so you don’t have to limit your purchases to those made with the hotel. They are just like any other credit card when it comes to buying things.
Hotel cards are different from airline credit cards in that many offer you bonus earning potential for categories like restaurants, airlines, rental cars, etc. With each purchase, you’ll typically earn a hand full of points on hotel purchases with that respective hotel, 2 to 3 bonus points on bonus categories, and then fewer points on everyday purchases. Because the value of hotel points varies more than airline miles do, it’s really important to have a sense of how valuable the hotel points are (more on that below)
If you sign up for a hotel credit card before you created a loyalty account or simply don’t provide your loyalty number on your application, a new account will often be created for you and that’s where your miles will go. If you accidentally end up opening more than one account, just call customer service for the hotel and it’s usually not a problem to get the accounts merged.
Flexibility vs other cards
One of the drawbacks to hotel credit cards is that you’re typically only earning points for that hotel’s loyalty program (Marriott/SPG excluded). So for example, if you sign up for the Hyatt Card, you’re only earning World of Hyatt points that can only be used on Hyatt properties.
This can be disadvantageous because other cards can offer you much more flexibility with the types of points earned. For example, with the Chase Sapphire Preferred you could earn Ultimate Rewards and transfer those out to an array of hotel partners including Hyatt, IHG, and Marriott/Ritz-Carlton.
This is why I highly value cards like the Chase Sapphire Preferred. Being able to transfer out points to a variety of partners can make finding free nights a much easier task.
What kind of perks are you after?
The major perks of hotel credit cards are:
- Sign-up bonuses: points and free night certificates
- Free anniversary nights
- Elite status
- Bonus categories
Sign up bonuses
Most Hotel credit cards will offer you a sign-up bonus for points after you spend a certain amount on purchases within 90 days or 3 months of account opening. It’s really important to get an idea of what the different hotel points are worth because there can be some pretty drastic differences in their respective value.
For example, SPG points are worth around 2.4 cents per point while Hilton Honors points may only be around .4 cents per point. This is why you shouldn’t pursue a hotel credit card based solely on the number in its sign-up bonus. Besides researching point value, a good way to gauge the worth of a hotel’s currency (and thus sign-up bonus) is to search different cities for hotels and see how many nights you’d be able to book after earning a specific sign-up bonus.
Not all hotel credit cards offer you points for sign-up bonuses, however. Some cards, such as the Citi® Hilton Honors™ Reserve Card offer you free night certificates.
The difference between points and free night certificates is that the points normally offer you more flexibility in that you can stretch them further by using them on lower tier properties. Also, sometimes the free nights come with restrictions, such as only being valid on weekend nights or at properties of a certain category. Keep in mind that unlike points, these free night certificates usually expire within 12 months.
As a general rule of thumb, sign-up bonuses offering free night certificates (like the Hyatt Card) offer you the best potential to maximize value by redeeming them at top properties that can go for $1,000 or more a night. (Although this isn’t always the case.)
The sign-up offers for hotel credit cards are constantly in flux. We see the sign-up bonuses go up and down and so it’s really important that you know how to find the best credit offers to make sure you’re not jumping on a subpar offer.
Free anniversary nights
Many hotel credit cards offer free anniversary nights for their perks. These almost always come with category restrictions and often cannot be used at top hotels (the major exception to this rule is the IHG Card which offers a free anniversary night at any IHG property).
Typically, you receive the free night after you’ve held the card for 12 months and paid your annual fee (or had it officially waived by the bank). After that you need to redeem the free night certificate within 12 months or it will expire. Most hotels require you to book and stay in the hotel within those 12 months, but you should always verify what the current policy is with whatever loyalty program is offering you the benefit. Also, know that these free night certificates may not be transferrable to other people.
Here are some examples of cards that offer free anniversary nights:
- IHG Rewards Credit Card: Free anniversary night that’s good for any IHG property
- Hyatt Credit Card: 1 free night at any Category 1-4 property
- Marriott Rewards Premier Credit Card: Free anniversary night each year at category 1 through 5 hotels
Keep in mind that sometimes in order to receive the free anniversary night you may have to do some spending. For example, the Citi® Hilton Honors™ Reserve Card allows you to earn a free anniversary night after you spend $10,000 in a cardmember year.
Overall, these anniversary benefits are key factors to look at when trying to decide if you should keep your card or not. Often these hotel credit cards come with low annual fees and the free anniversary nights make it very easy to more than cover the cost of your annual fee.
Elite status
One of the most common perks offered by hotel credit cards is elite status.
For your average hotel credit card, you’re typically given lower mid-tier status (2 tiers away from the top elite status). For example, the Hyatt card offers you Hyatt Discoverist and the Marriott Premier Rewards Card offers you Marriott Silver Status. However, some cards offer you the higher mid-tier status, such as the Hilton HHonors™ Surpass® Card from American Express which offers you Hilton Honors Gold Status and the Ritz-Carlton Rewards Credit Card which offers you Marriott/Ritz-Carlton Gold (the first year).
You can usually bump up the status offered by the credit card by spending a certain amount of money on the card each year. For example, by spending $30,000 within a calendar year on your Starwood Preferred Guest® Credit Card from American Express, you can bump up from SPG Silver Status to SPG Preferred Gold Status.
Typically, these mid-tier elite levels provide you with benefits like free breakfasts, wifi, late checkout, and upgrades, among other benefits.
Before jumping on hotel cards to earn status, make sure you’ve explored other options for obtaining status. Cards like the The Platinum Card® from American Express offer automatic SPG Gold (and therefore Marriott Gold) and Hilton Honors Gold and can often be a more practical way to become elite.
Utilizing credit cards for status can make it much easier to climb the elite status ladder with some programs. For example, using the Platinum status offered by the IHG card, we were able to obtain Hilton Diamond status with one hotel stay. Also, once you get to mid-tier status, you can explore status challenge opportunities to get to top tier status, such as Marriott Platinum Status or SPG Platinum Status.
What kind of bonus earning potential?
Many hotel cards offer bonus categories for airlines, restaurants, and car rental purchases. It’s important to note that the hotel’s credit card is not always the best credit card to use to earn points for that program.
For example, the Chase Sapphire Reserve earns 3X on dining while the Marriott Premier Rewards Card earns 2X on dining. You could always transfer your Chase Ultimate Rewards earned by your Chase Sapphire Reserve over to Marriott so it would not make sense to put dining on your Marriott card if you had both cards.
This is why many people will often hold a card with a major rewards program like Chase for their everyday spend and also hold a hotel card for the specific perks offered by that card.
Transfer program partners?
The other major factor you want to look into is what reward programs transfer to that hotel.
Unlike airlines which transfer 1:1 in most cases, hotels can be much different. For example, American Express Membership Rewards transfers at the following ratios:
- Hilton HHonors (1,000 points = 1,500 HHonors points)
- SPG (Starwood Preferred Guest) (1,000 points = 333 Starpoints)
Meanwhile, Chase transfers 1:1 to all of its hotel partners.
I try to avoid transferring my points to hotel programs outside of Hyatt or Marriott because I often don’t get great value and could do better by booking through a travel portal. However, you should always check what kind of value you’d get from your points for your specific booking since it can vary.
Final word
Hotel credit cards can be great options. They can help provide you with very valuable sign-up bonuses, elite status perks, and free anniversary nights that more than cover the cost of the annual fee. Before applying make sure you’re aware of the value of the sign-up bonus and your potential alternatives.
Daniel Gillaspia is the Founder of UponArriving.com and the credit card app, WalletFlo. He is a former attorney turned travel expert covering destinations along with TSA, airline, and hotel policies. Since 2014, his content has been featured in publications such as National Geographic, Smithsonian Magazine, and CNBC. Read my bio.