Barclaycard closes its IHG credit cards – what should you do?

Barclaycard sent out letters to holders of the IHG Rewards Club and IHG Rewards Club Premium visa cards yesterday informing them that the cards will be closed on 26th April.  Points will only be earned on transactions made by 20th April.

This is not a totally surprising move, as the contract to operate the IHG credit cards moved to Creation last year.

What IS surprising is the notice given – six weeks.

In particular, I am surprised that no compensation is being offered for anyone part-way through meeting their £10,000 of spending on the Premium card to get the free night voucher.

This is, to be honest, not acceptable.  Barclaycard would almost certainly have known, from the day that Creation took over the contract, that it would stop servicing the existing IHG cards on a specific date in the future.  It is wrong that cardholders should have been duped, for want of a better word, into putting spend onto the Premium card when Barclaycard knew they would never reach the £10,000 in time.

If you have the Premium card and will not be able to trigger your IHG free night voucher by 20th April, I would seriously consider making a formal complaint to Barclaycard.

The maths is simple:

Work out how much you will have spent in your card year by 20th April (eg £6,000)

Assume that you would have redeemed your free night voucher at a top InterContinental worth £250

Make a claim for the % of £250 you have reached – in my example, 6/10th of £250 which is £150

If Barclaycard does not settle, I would escalate your complaint to FOS.  I struggle to believe that they would not find in your favour.

IHG Rewards Club Premium Visa 2

Odd card transfers

Existing Barclaycard IHG cardholders are being moved to either the Platinum or Freedom Rewards cards.  This seems to be based on how keen Barclaycard is to keep you.

You will receive a pro-rata fee refund on your IHG card from 26th April until the end of your current card year.

I would be tempted to cancel at this point and look for a more suitable Visa or MasterCard instead.  The rest of this article looks at the IHG options.  My second article today looks at the non-IHG alternatives.

Should I take out the Creation IHG cards?

Fundamentally, yes.  If you were happy with the Barclaycard IHG cards then you will find that the Creation cards are virtually identical as I outline below.

Except …..

The free night voucher on the Creation Premium card is issued at the end of your membership year.  The free night voucher on the Barclaycard Premium card was issued as soon as you hit £10,000 of spending.

This is a bit of a pain for big spenders.  It also creates issues for anyone who does not want to pay another year of membership fee.  You are forced to wait until your voucher appears and then challenge Creation over whether you are due the bill for the new year or not.  (If you don’t use the card after your renewal date, you have a good case for getting the fee waived.)

One upside is that the free Creation card gives double points for foreign spend.  Under Barclaycard, only the Premium card had this benefit.

You will also get another sign-up bonus for applying, which can’t be bad.

How do the two Creation IHG cards compare?

If you have the existing Barclaycard cards you will find the details below very familiar.  I have written this mainly for the benefit of anyone thinking about getting an IHG credit card for the first time.

There are two different versions of the card.  It isn’t clear if you are allowed to have both as the benefits overlap – one gives Gold status whilst the other gives Platinum.

IHG Rewards Club credit card free

The free version – IHG Rewards Club MasterCard

The headline features of this card are:

No annual fee

10,000 IHG Rewards Club points for joining and spending £200 in the first three months – these are worth about £40 of free hotel room or transferable to 2,000 Avios points or other airline miles

Gold status in IHG Rewards Club for as long as you hold the card.  You won’t get much, frankly, for being Gold – usually a few hundred bonus points or a free drink.  However, if you do a few Holiday Inn, Holiday Inn Express, Crowne Plaza or Indigo stays then it is certainly better than nothing.

1 IHG Rewards Club point per £1 spent.  I value IHG points at 0.4p so this is a 0.4% return.

2 IHG Rewards Club points per £1 when you pay at IHG hotels.  This would be roughly a 0.8% return which is good.

2 IHG Rewards Club points per £1 when you use the card abroad.  This is a new benefit – only the premium card got double points abroad under Barclaycard.  However, as the card has a 2.99% FX fee you would be better off using a card without FX fees instead.

Representative APR is 18.9% variable

IHG Rewards Club credit card premium

The paid-for version – IHG Rewards Club Premium MasterCard

The headline features of this card are:

£99 annual fee

20,000 IHG Rewards Club points for joining and spending £200 in the first three months – these are worth about £80 of free hotel rooms or transferable to 4,000 Avios points or other airline miles

Platinum status in IHG Rewards Club for as long as you hold the card.  This is no longer the top level following the launch of the Spire tier.  However, if you do a few Holiday Inn, Holiday Inn Express, Crowne Plaza or Indigo stays then it is worth having.  It is occasionally enough for a Club room upgrade at a Crowne Plaza.

2 IHG Rewards Club point per £1 spent.  I value IHG points at 0.4p so this is a 0.8% return.

4 IHG Rewards Club points per £1 when you pay at IHG hotels.  This would be roughly a 1.6% return which is very good.

4 IHG Rewards Club points per £1 when you use the card abroad.  As the card has a 2.99% FX fee you would be better off using a card without FX fees instead.  I only value the points at 1.6%.  The only reason to use the card abroad would be to work towards your free night voucher or earn additional IHG status points.

A free night voucher for any IHG hotel for spending £10,000.  Use it at the InterContinental Paris, London, New York etc and you could be looking at £250 of value.

Representative APR is 41.5% variable including the £99 fee, based on a £1200 credit limit

With either card, there is a minimum income requirement of £10,000.

It is important to note that points from day-to-day spend count towards elite status.  The sign-up bonus does NOT count towards elite status.  A heavy spender could get Spire Elite status simply by putting £37,500 of spending through the Premium card.

According to the terms and conditions:  “If your IHG Rewards Club Credit Card account is closed within the first 6 months of opening, IHG reserves the right to deduct [sign-up] Rewards points from your IHG Rewards Club account.”  As you do NOT get a pro-rata fee refund for cancelling, this is unlikely to be an issue for anyone.

What do I think?

If you are ONLY looking to exploit the sign-up bonus then the £99 card is not the card for you.  You would be mad to pay £99 for a sign-up bonus worth £80 at best, especially as the points do not count towards status.  You should focus on the free card where the smaller 10,000 point sign-up bonus is worth £40.

For long term spending, however, the Premium card is very good.   I had the Barclaycard version of this card for a couple of years and I put a lot of money through it, including tax payments.

Imagine spending £10,000 on the card in a year.  You would get:

20,000 IHG Rewards Club points, worth £80 or so, assuming all spend is in the UK and not at IHG hotels

Those points count towards status, which could be important if you are pushing for Spire Elite

Your free night voucher, worth say £250 if used at an expensive InterContinental

You are getting £330 of benefits for an annual fee of £99.  That is a gain of £231 or 2.31% of a £10,000 spend, which is excellent.

You also need to add in whatever value you ascribe to Platinum status in IHG Rewards Club.

I have renewed my Spire Elite status for 2017 almost entirely down to credit card spending.  Reaching Spire Elite via 75,000 status points triggers a bonus of 25,000 IHG Rewards Club points.  You could argue that this is an additional bonus for anyone who spends £37,500 on the card.

If you are looking for a new Visa or MasterCard and you have the ability to put £10,000 of spending through the card to trigger the free night, I would recommend it.

I would NOT necessarily recommend it if you will not spend £10,000 to earn the free night.  For low spenders, the higher earnings rate does not justify the £99 fee compared to the free IHG Rewards Club MasterCard.  The only exception is if you stay enough at IHG hotels to benefit from Platinum status but you don’t stay enough to actually earn it from your stays.

My second article today looks at non-IHG alternative Visa and MasterCard products.

(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.)

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 histo

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Which Visa or MasterCard could replace your IHG Barclaycard credit card?
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Comments

  1. Craig Vassie says:

    I have held a Creation IHG card since they started issuing them. Hassle free when compared to Barclaycard. Have just applied for Hilton Visa and been knocked back by Barclaycard because I hold one of the old IHG Visa cards. I don’t want a Platinum Barclaycard so have asked them to cancel the IHG Visa card immediately. The support team are thinking about whether I can now have the Hilton card without a six month gap……. absolutely useless bunch!

    • I was allowed, indeed encouraged, to retain my IHG card (they even swapped it to a zero percent rate!) I was then allowed the Hilton card at the same time, so they are not consistent. I then closed the IHG card recently.

      I suspect they have reached a critical mass of churn away from the card so its no longer viable to keep it going.

  2. Christian says:

    I did run through with creation the “free night but only after anniversary” point after the last scare story about having to pay two years of card fees to get one year of benefit.
    Absolutely not true they say.
    You WILL NOT have to pay for a second year of the card in order to receive your first year benefit. You still won’t get the free night until the end of your first year, but receiving this is not conditional on paying for a second year.
    This line creeps in each time because of Raffles flapping about the small print. If he’d asked them to clarify it (as I did) then this falsehood wouldn’t keep getting repeated.

    • Customer service people aren’t the ones who program the backend systems.

      The only people who currently know whether you will get charged the fee again are the programmers, provided that they did proper testing.

      At this point in time, all you have is evidence that you can use to get the fee refunded should it turn out that you do get it charged again.

    • Ron has always been clear, there’s not an issue here. If they charge the fee it’ll be refunded, if not a swift FOS complaint would resolve. Given how few options are about I’ll be hanging onto it after the first year anyway!

    • Thing is … I’ve had lunch with the Creation team and I know what their intention is. I also wouldn’t trust their call centre an inch.

      If it isn’t in the contract then you can’t 100% rely on it.

      • Peter K says:

        I also don’t trust the call centre. They didn’t even know about the free night when I called and claimed it did not exist as a benefit of the card. They said they had the details of it in front of them but from everything else they said it sounded like they were making things up as they went along!

        • Peter K says:

          Details of the benefits of the premium card that it, which apparently did not include a free night.

      • Mr Dee says:

        Would be interested to know more on their intentions?

  3. To break even on the £99 card you’ll need to spend at £2475 by which time you’d have acquired as a minimum 24950 points (provided you’ve not spent at any IHG properties. Meanwhile on the free card following a £2475 spent you’d have acquired 12475 points worth £50. So for anyone wanting to get Platinum vs Gold then the cost would effectively be £50. I don’t know how people much people value the different status levels at IHG but it could be worth it for some, Rob could you shed some light on this?

    • That’s only a first year calc though. If you can’t hit £10k I think the free card is better.

      • Simmo says:

        Any risk in me being downgraded from Spire by mistake if I take out one of the IHG cards?

        • no because the Terms say so 😉

          “2. Platinum Elite Status: As soon as you are accepted for the IHG Rewards Premium Credit Card, you will receive automatic Platinum Elite status, and all the benefits that come with it, unless you are already a Spire Elite member.”

          • Indeed – similarly the white card if you have the black. My IHG a/c now shows ‘Gold upgrade’ from my successful white card app, but my status is still Plat.

  4. If you are a keen uber user you might want to keep a barclaycard:

    “Make your rides go further until the end of 2017

    When you pay with your Barclaycard, that’s exactly what will happen.

    Every 11th ride using Barclaycard as your payment option is free up to £15 until the end of 2017*. Just think of it as a loyalty reward you’ll never forget to use. “

  5. I have an old IHG visa in a drawer after triggering the sign on bonus just to keep the Gold status (which is matched from time to time by Hilton and others). Does the status remain for the duration of the year or is it cancelled as soon as the card is withdrawn?

  6. xcalx says:

    Will I now lose the Plat status that I have somehow managed to keep since I cancelled the paid card 4 years ago.

    • Guess so!

      • xcalx says:

        Oh well, not much of a loss. I am gutted at not having OW Sapphire as my status match to AB ended on 28th of Feb. They did however give a soft landing to OW Ruby so at least 1 free bag when flying AA.

  7. lostantipod says:

    I’ve just been on the phone to the Barclays call centre, asking to cancel the card and get a pro-rata refund of the £99 fee. My anniversary date is in early July. Their first reaction was to only offer me a refund for May and June ! Cheeky buggers. I pointed out that I expect a refund starting today since they gave little notice of cancellation of the card, or a FOS complaint would follow. After a short period on hold for a supervisor conversation, I was promised a pro-rata refund from today.

  8. Christopher Kaye says:

    Just rang Barclaycard up saying I wanted to close my account. Played the ‘if I don’t get £99 back I’ll take you to the Ombudsman’ card and eventually got transferred to Bombay. Eventually said they’d give me £30 (the pro rata difference) but didn’t mention the remaining £69. After a lot of to-ing and fro-ing eventually they explained, eventually, in clear English that I’ll get the pro rata amount in May, and £30 now.

    Not a happy bunny as you can probably tell given how long I spent on the phone. Also I said I had no interest at all in their platinum card, could I maybe have the Hilton card instead?

    “We don’t offer the Hilton card”

    But it’s on your website? I can hit apply now right now!

    “Let me put you on hold”

    And then they come back and say that yes, it turns out they do offer the Hilton card, but they can’t transfer me to it, I have to apply for it and I may not get it! But not to worry as I will get transferred to a wonderful platinum card. Ahh!

    All in all a complete embarrassment to the Barclays brand. I’ll be taking my business elsewhere come April.

  9. Apologies for OT. I want to transfer MR points to a hotel program for a 4-night stay in New York. Do you have any suggestions for a value for money hotel in NY using points?

    Thanks

  10. With the two Barclaycards if you apply you get either 12 months or 25 months interest free on purchases. Will I get the interest free period when Barclaycard swap my IHG card to a Barclaycard?

  11. Chris says:

    So, Platinum or Freedom depending on whether barclaycard want to hold onto you – but which is which?

    After being offered a distinctly “don’t let the door hit you on the way out” card when MBNA Diamond CLub card was kill last year I’d be disappointed to have been insulted twice!

  12. For those considering their next steps a good report from a Flyertalk member here – http://www.flyertalk.com/forum/28004795-post1420.html

    Basically they filed a complaint, asked for a % of a top-end IHG property based on how much they’d already achieved towards the target and were given it. I suspect Barclaycard know they’re in the wrong here and would not be keen on a slew of Ombudsman complaints so are likely to accept similarly reasonable approaches :)

    • Alan, I am going to lose my hard earned Spire status at the end of 2017. As I am not earning Creation won’t accept me so will have to cancel my card at renewal next week – thankfully got my free night certificate and using it next month for our one night in Chicago. My 20k qualifying pts earned so far this year towards Spire for next year are all wasted. Hubby has been accepted for the Creation card so he will be promoted from Club member to Platinum but we won’t be able to earn Spire for him this year. I do a combination of cc spend and erewards but now they are no longer qualifying pts – don’t want to waste my Virgin miles for hotel pts but never say never.

      • It annoying about those qualifying points, Liz. Have you found much benefit though with Spire vs Plat apart from the bonus points that come when you acquire/retain it?

        I think you could have an interesting case to put to Barclaycard on that point actually – why not ask for them to either issue you with 25k points (as per Spire bonus) or cash equivalent to buy them – they may well go for it, nothing to lose!

        • I might try that – we’ve had several upgraded rooms so far and several have upgraded us this year so far for our first trip as I have written to the hotels individually. I know not much benefits from Spire but it was the one thing I could do in my name! It got you 100% bonus points and we’ve had some free parking which saved a bit plus the 25k bonus. We will enjoy it till the end of the year!

          • Glad you’ve had such good use of it so far, definitely worth a punt!

            Full LCC experience with BA from EDI this morning – bus from gate 23 to the furthest reaches of the airfield, long wait before boarding started, then BoB!

  13. I got the free IHG Visa card. I assume I won’t lose the 50,000 points i’ve got if I cancel the card?

    • They’re safe as long as they are already across in your IHG account – don’t cancel until they show up there (good general principle!)

  14. PantsFlyer says:

    I complained via the Barclaycards website secure message service, based on Raffles advice above.
    I had several missed calls on my mobile today, and they finally replied via the secure message.
    In summary I was offered £125 as compensation in addition to the pro-rota refund of my annual fee. So overall I’m content just a hassle I would have preferred to avoid.

  15. RussellH says:

    Rob,

    One difference I did not see mentioned in your comparison of the BC and Creation IHG cards is that Creation give points only on the number of whole GBP in each transaction, while BC tot up the entire months spend and then award points on the number of GBP in that figure.

    If you make a lot of small transactions in order to maximise points, it can make a noticeable difference over a few months.

  16. RussellH says:

    My partner and I both feel that Gold is worth having – usually for the free drink. A free beer or glass of wine can make a big difference at the end of a long drive down the M6.At IHG bar prices it will be worth nearly £5, which is worth having.

    Quite often you can get two free drink vouchers if you ask – I always “check” which it is and it often pays off.

    As it happens we are just back home from a one night 5000 IHG points break. The duty manager checked us in and happily gave us two vouchers, plus a welcome letter, signed by himself, reminding me that I was entitled to ONE drink.
    :-)

    The best deal so far has been 4 drinks vouchers and 300 points at an HI last Sept.

  17. blueskies says:

    Sorry if this is a bit dozy, but how do I calculate the amount I have already spent on the card? From the month my first voucher was triggered?

    • I assumed it was from the day the fee was charged to your statement, but I could be wrong.

  18. Mark E says:

    I have an IHG Barclaycard. When I heard the news the other day, along with a rumour that the Hilton Barclaycard was being withdrawn, I applied online for the Hilton Card.

    Today I was rejected for the Hilton card as I was already holding a Barclaycard. I rang Barclaycard and asked to switch onto the Hilton card and I was told that I was only able to switch onto the Platinum card. I asked if there was another card available to me that offered loyalty or cash back and I was told that once I was in the Platinum card I could switch onto their Freedom card.

    I asked if after going onto the Platinum card I could switch onto the Hilton card, I was told that I wouldn’t be able to as they have withdrawn that card.

    I have however successfully applied for my creation IHG card so it’s not all bad, I will just have to wait six months longer for my free night.

  19. Johnny_c-l says:

    Had a letter through the post yesterday offering me the Creation cards for 40,000 (black card) or 20,000 (white) bonus points. Easy application and approved right away.

  20. Charlie Thompson says:

    Brilliant article Rob – I don’t have the energy or focus to cross-check and you have covered it all. Very many thanks – I am Spire Elite based on just piling household expenses through husband / wife spending inc business expenses. Love the free nights – the £99 fee is a no-brainer given the way the points add up