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.

These were all excellent reasons to get the card, retain it year after year and keep it in your wallet and use itwhich 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.

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.

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Want to earn more points from credit cards? – April 2024 update

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