IHG credit card sign-up bonuses no longer count for status

The relaunch of IHG Rewards Clubwhich I discussed here – is meant to take place on July 1st.  Things seems to have been delayed and, whilst it is likely that the new and still unnamed top tier will launch on that date, there will be no major changes to the benefits package until 2016.

IHG has been making a few other tweaks in advance of the relaunch.  One which has been kept very low key is this:

Sign-up bonus points on the IHG Rewards Club credit cards are no longer counting towards status.

This change has already taken effect and I have heard the first reports of bonus points posting and not being shown as counting towards status progression or renewal.

For clarity, point earned from spending on the credit card WILL continue to count towards status.

IHG Rewards Club 350

Ironically, whilst the sign-up bonus used to count towards status, it didn’t really make any difference.  Holders of the IHG Reward Club Premium Visa receive Platinum status for as long as they hold the card.  As Platinum is currently the top tier, you didn’t need to bother about status points as you were already as high as you could go.

That is about to change.   From July 1st, there will be a new tier – Diamond is the rumoured name.  Diamond will require 75,000 status points per year.

Suddenly, the status points from the sign-up bonus on the credit card became useful.  The Premium Visa comes with a 20,000 points bonus and it can be as high as 60,000 points during promotional periods.  That would have put you 80% of the way towards Diamond status – and if Diamond turns out to have some good benefits, it would have been worth doing.

That is no longer an option.  With the sign-up bonus on the credit card no longer counting towards status, anyone wanting to earn Diamond status will have to do it the hard way – by spending a lot of money in Holiday Inn, Crowne Plaza, InterContinental etc hotels.

Very few people will have the capacity to earn it via the alternative route – by putting £37,500 a year through the IHG Rewards Club Premium Visa at 2 points per £1.

If you are self employed, it may be worth thinking about it.  Paying £37,500 of income tax, PAYE, NIC or VAT via your IHG Rewards Club Premium Visa card would incur a fee of 1.4% (£525).  You would get 75,000 IHG Rewards Club points for the spending which would be worth around £375 if used sensibly.

That leaves a gap of £150.  However, one benefit of the new top tier will be a 25,000 point annual bonus which you could value at £125.  This means that £525 of credit card fees to the Inland Revenue would earn you 100,000 IHG Rewards Club points and Diamond (or whatever it will be called) status.

If you are paying VAT or PAYE for your business, you may also be able to deduct the credit card fee as a business expense.  This is not possible if you are self-employed and paying your income tax bill, however.

We should learn on July 1st whether Diamond status is worth that much trouble or not ….

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Comments

  1. avidsaver says:

    For those of us who have recently achieved status with the recent sign up bonus on the paid for and free card (Platinum/Gold) Do you know if this will remain unchanged for as long as we hold onto the cards?

  2. James67 says:

    Curious to see what will happen to premium card too. If platinum becomes worthless, which seems very likely, then Barclays will need to boost standard signup bonus and even earning rate otherwise card will die. What I am hoping is that it may still be a route to the highest status, even if they have to increase the fee. However, I have my doubts the new Diamond status will be anything to get excited about.

    • Why ‘becomes’? Platinum is already useless and I guess no changes of its benefits are being planned?

      • Depends on property, it varies from useless to quite good! Got a Kit Kat and 500 points in a Holiday Inn last week but also get club lounge upgrade at a CP recently and my wife got specific Plat benefits at IC Le Grand in Paris last year.

      • James67 says:

        I got a few upgrades along the way including CP The City, Aberdeen HI ECC, HI Wembley, HI Patong Beach Resort and Indigo Kensington being those I recall. Raffles lucky to get a Kit Kat though, been disappointed to see them missing from rooms of late where I had come to expect them. Hot chocolate disappearing too, I guess I’ll need to start staying Indigos more often.

  3. RIccati says:

    It looks like they have read about your plans Raffles on cancelling IHG cards and re-applying to use bonus to qualify for the new status.

    Guarding the status that has no guaranteed benefits, the way to go IHG!

  4. I keep hearing about paying HMRC via cards etc. is this company cards? Does it not create problems if paying from personal accounts?
    The reason I ask is my accountant keeps saying I MUST make payments from the business account directly to hmrc. I Have just paid our corporation tax that way and wished I had other options like many here. We have a limited company if that makes any difference?

    • I’ve never paid for anything on HMRC with a card, as the 1.4% fee doesn’t result in a decent ROI for me, but I did enquire with my accountant and he didn’t think there was any issue in using a personal card. I can’t see why it would, as a huge amount of people use their personal cards for expenses, then claim it back and this is no different. In paying your tax, as long as you provide all the correct references, I cannot see why they’d care where the money came from. Perhaps someone who has done it can verify with certainty for you.

    • I have done, and continue to use a personal card for business expenses. I document everything with receipts (as you would a coporate card any way) and my accountant has no issues with it.

      One thing I am now careful of to avoid any ambiguity is not to put personal spending on said card.

      • To clarify its a ltd company and I pay the business expenses off directly from the company account – so no transfer to my personal account first as some people may term “expenses”.

    • With a limited company you should probably, technically, put in an expense claim to yourself to create a paper trail but it can certainly be done.

      The only thing that matters at the end of the day is whether there is a clear paper trail of what was paid to who so that it can be clearly identified as a business expense.

      • Dynamo says:

        Way off topic but can anyone recommend a good start up business accountant and/or a good website with info on creating a ltd company?

        • Winston says:

          Dynamo – you can easily create a Ltd Company using Companies House and pay a small admin fee (£15) last time I checked.

          You will have to fill out annual returns (£13 a year) and submit company accounts though.

      • Speaking as someone that has prepared sets of small business accounts for other people keeping your business and personal expenditure seperate is hugely useful to your accountant. That said having a seperate personal credit card with a seperate statement fort business expenses is quite manageable. If you are VAT registered don’t forget that credit card receipts are often insufficient to reclaim VAT.

  5. Danksy says:

    I’m not sure I agree about the ability to earn points. With the setyoursights promo I picked up 50,000 easily and in the other similar promo the same (for about £250) of expenditure each time!

    • Yes, but those bonus points don’t count towards status. Rob is talking about earning status points – these can only be gained by staying at hotels (status points) or credit card spend.

  6. The recent Qatar sales have made tier point running from the UK easier than ever IMHO.

    • thunderbirds says:

      Not sure what your point is here. I earn avios to fly I don’t fly to earn status. My emphasis was on cc as a means to earn avios. I agree that if you fly enough then buying flights outside of a sale is painful but I fly twice a year long haul and haven’t needed to so far.

  7. Nathan says:

    I was invited to dinner with the directors of the IC Osaka a few weeks ago and they are under the impression the new tier will push ambassador members up to royal ambassadors which will be a significant benefit!
    Hopefully that’s true

    • James67 says:

      .ow there’s a dilemna, should we purchase ambassador status this week? Need to think about that.

      • Nathan says:

        Well I’m a plat ambassador and I have found it a great program for IC hotels.
        The upgrade is nice but for me the 4pm late checkout is a godsend!
        The free night pretty much absorbs most of the cost too

    • I’ll eat my hat if normal paid for AMBs will all suddenly become RA.

      Double upgrades and a free mini bar for a year for £200?

      And that’s before the other RA benefits are costed into this.

    • You mean that an Ambassador who became Diamond gets upgraded to RA? The only thing that is odd about that idea is that you ‘only’ need £5,000 of spend to hit Diamond and you could do that with about 20 InterContinental nights which would effectively lower the RA threshold hugely.

      • Nathan says:

        True. Although the published stays to earn RA could be done for not much more than £5,000 if you used point stays etc too so actually, it’s not that far off the current expected stays for a RA.

  8. On the subject of the bonus not counting as EQ if the new level actually brings some significant benefits come January of next year I don’t particularly fall out with it.

    If there is no significant change it’s a pointless exercise and uptake of the card will surely decline as the new level (In theory) would take priority so the benefits of platinum become even more sporadic than before. That would leave the free night the only real benefit of the card.

  9. Peter K says:

    I have sort of given up on IHG after their changes to their reward program earlier this year and I’m heading for Hilton instead. Also not an amazing program but at least you can gain status benefits that actually mean something!

  10. Would buying point count towards for status at the end?

    • Unfortunately buying them will not count for status. I’ve found the 5k rate to be the quickest way of racking up elite points cheaply. There are some hotels out there that have the 5k bonus rate at either the same price as the best flex or only £5 more. I’ve had four stays over the last week all under £65 per night and netted 24k in qualifying points.

      • I like this idea of utilising the 5k bonus rates as a way to achieve qualification but is there a way to easily find the hotels that offer this? I did have such a stay at the HiEx at Birmingham Walsall M6 J10 the other week and found such a rate.