IHG Rewards Club credit cards closed to new applications – what happens now?

The two IHG Rewards Club Visa credit cards closed to new applications on 31st March.

No prior notice was given.  The cards have disappeared from the Barclaycard website (both cards were administered by Barclaycard).  They still appear on the IHG website but the linked page no longer contains a link to the application form.

Nothing changes for existing cardholders, at least for now.

It is not clear at this point what will happen.  As far as I know, IHG is not pulling out of the credit card business – the credit card conference I attended recently had a few IHG staffers there – so I would guess that the card will re-emerge at some point with a new issuer.

However, as recent rulings make it clear than American Express co-branded cards are now covered by the 0.3% interchange fee cap, there is no clear incentive for IHG to launch an American Express card.

Ironically, the benefits package on the IHG Premium Visa was to my mind exactly what was needed to survive in the new world of EU interchange fee caps.  Both my wife and I have the IHG Rewards Club Premium Visa.

IHG Rewards Club offered status to everyone who got the cards – Gold status on the free card and Platinum status for the £99 Premium Visa.  They also offered a free night voucher in return for spending £10,000 on the Premium card.  In addition, the points from your spending counted towards earning a higher level of status.

(Spending £10,000 per year on the Premium card would earn 20,000 IHG points and a free night potentially worth £200+.  That is a 2% return even after deducting the £99 fee which is excellent for a Visa.)

IHG Rewards Club Visa

These were all excellent reasons to get the card, retain it year after year and keep it in your wallet and use it which is the ultimate goal of all loyalty cards.  The real value for the issuer is in you seeing their logo every time you pay for something.

The Premium card also offered double points for foreign spending – which was a good reason to use it abroad, despite the 3% foreign exchange fee, especially if your employer was reimbursing you.

There was no need for an over-generous sign-up bonus (although it did have good offers from time to time) or indeed a strong earning rate (although that was pretty good as well).  The economics looked as good as you were going to get in the post-EU fee cap world.

IHG Rewards Club Premium Visa 2

However …..

If you look at this Flyertalk thread you will see that many people had problems with the way that Barclays administered the card.  In particular, there were major problems in crediting the bonus points for stays at IHG hotels.  Some people were earning a decent second income via the compensation Barclaycard was paying them every month for their repeated complaints ….

I can also imagine that IHG would have been frustrated with the recent change to Barclays policies on issuing cards.  If you held any other Barclaycard, including the Hilton HHonors card, or have had one in the last six months, you would not be accepted for the IHG cards.

It isn’t clear where the IHG credit cards go from here.  IHG seems to ‘get it’, as opposed to:

Hilton HHonors Platinum Visa (review), which has an amazing sign-up bonus – the best bonus in the whole travel loyalty sector, to be honest, and the card doesn’t even have an annual fee – but has little incentive to actually spend on the card.  The one benefit – Gold status for spending £10,000 – has been devalued due to Hilton status matches.  The card also has stupid timing rules – the free night voucher for getting the card only lasts for six months and the £10,000 spend for Gold must be done in a calendar, not card, year.  The sensible thing to do is to cancel it quickly and churn it, which is bad news for Hilton and Barclaycard. 

Marriott Rewards Visa (currently closed to new applicants, possibly because Marriott has no FCA license), which has a weak earnings rate and is only spiced up by giving you free Silver status and 2,000 points per year for keeping the card.  The problem here is that you apply for it but keep it in a drawer unused.

Starwood Preferred Guest American Express (review) which has a ‘too high’ £75 fee and the most insulting benefits package of any UK travel loyalty card.  Spend a ludicrous £25,000 in a year and you get a free night voucher which is, effectively, not valid at anywhere better than a 3-star hotel – because that is obviously where people who spend £25,000 a year on Amex cards like to spend their free time.  The best reason to get this card is if you collect airline miles via one of the 20-odd SPG airline partners who do not have their own UK credit card, eg Flying Blue, Aeroplan, Avianca etc. 

This is what I think you need to offer in the 0.3% interchange fee world:

Some sort of status benefit to encourage you to retain the card and pay the annual fee (annual fees will be the norm going forward whether we like it or not)

An incentive for spending a decent sum on the card – but the amount must be realistic and the reward must have some value (take note, SPG Amex)

Points which count towards status in the loyalty programme

Additional incentives for using the card with the sponsoring hotel / airline

I’d love to think that we’d see more cards doing away with foreign exchange charges.  In a world of 0.3% interchange fees, however, that is highly unlikely to happen.  It is virtually the only way to make any income from those of us who pay our bills promptly each month.

The IHG Rewards Club Premium Visa ticked all of these boxes.  Hopefully, wherever IHG goes next, it will not forget what it has learned about putting together a good package which benefits both them, the issuer and the cardholder over the long term.

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history.  By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)

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Comments

  1. Nathan says:

    I wonder if the platinum card will become a spire card… it was a good deal to get top status before but for mid tier status now.. hardly worth the £99 imo

    • What are the actual spire benefits/enhancements over plat?

      I still get the upgrades I used to with plat! No issues here unless spire start getting free breakfast or similar

      • Mainly 25K free points and higher earnings should you ever pay to stay at IHG

  2. Enigma368 says:

    I don’t know if I agree that the Hilton card has a poor earning rate. 2 Hilton points per £1 on this no annual fee card definitely beats the 1 IHG point per £1 on the no annual fee IHG card. I agree that the gold for £10k benefit is now pretty useless for most.

    • Fair point, I tend to compare it with IHG Premium but that is unfair given the fee. I agree 2 HH beats 1 IHG. I have edited the article slightly.

      • Waribai says:

        Raffles. On the subject of editing, I think the Lloyds avios credit card offers 0% purchases for 24 months currently rather than the 13 months referred to in your summary. This has been the situation since January I believe.

  3. Simon Rothenberg says:

    I did a market research call for IHG a couple of months ago (as was offered 15k points for doing so). It was all credit card based and I sense a new provider is in the offing – two card tiers will continue (judging by the questions) but card may be only IHG branded rather than Co branded…. Make of that what you will! Most of the questions were about benefits I looked for, how I could be convinced to spend more on the card and on the colour I liked my cars to be,

    • Unless IHG is planning the equivalent of a store card, valid ONLY at IHG hotels, it will be co-branded!

      • Simon Rothenberg says:

        I think the questions were more aiming at – do you want an IHG card from MBNA (with MBNA in big letters on the card – well ABCD in the picture they showed…) or an IHG card provided by MBNA (with no obvious branding other than an amex sign in the bottom corner….

        Was quite an interesting survey all around, and the other 4 people on the call thought my approach to the “miles game” was crazy and risky?!?!

  4. All of this could explain why IHG points were not showing on my statement from Barclaycard this month.

  5. Jumble Tales says:

    Interestingly I just received a balance transfer offer for my IHG premium for transfers until January 18.

    • Will Squires says:

      Barclaycard send me one of these offers every month – along with a follow up, again every month.