Maximise your Avios, air miles and hotel points

What is the best HOTEL credit card for long-term spending? (Part 1)

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Today and tomorrow, I am going to take a look at the four major hotel credit cards – Hilton, Starwood, Marriott and IHG Rewards Club – to see if any of them are worth keeping in your wallet for the long term.

This analysis ignores the value of any sign-up bonus as I am keen to look beyond that and see if any of these cards deserve a permanent place in your life.

This was a complex analysis because the cards offer a different mix of features:

Some offer bonus points when you spend abroad

Some offer bonus points when you spend with the hotel chain that issued the card

Some offer extra benefits for hitting a certain annual spend threshold – and often these benefits are intangible and tricky to value

Two of the card carry an annual fee

You also need to put a cash value on the points earned.  This is my valuation model:

Hilton HHonors – 0.3p per point

Marriott Rewards and IHG Rewards Club – 0.5p per point

Starwood Preferred Guest – 1.5p per point

Credit cards

With Hilton, Marriott and IHG these valuations are based roughly on the points required for a £250 per night five-star hotel.  With Starwood, who charge a disproportionate premium for their top hotels, I have based it on a high-end four star whilst also remembering that you can convert 1 SPG point into 1.25 airline miles.

Apart from Marriott, I have made multiple bookings for all of these chains in 2014 so I am happy with my numbers.  If you don’t agree, it is easy enough to slot in your own valuation.

Today I want to look at the return you get for spending £10,000 on each of these cards.  Tomorrow I will look at the impact of spending £25,000.  I have assumed that 25% of the spending takes place abroad and 5% is in hotels linked to the card issuer.

Full details of the benefits and earning rates for each card can be found in the reviews I link to below (click the blue link for the review).

Return for spending £10,000:

Hilton HHonors Platinum Visa:
Base spend: 20,000 points @ 0.3p = £60
Extra points on £500 of Hilton spend: 500 points @ 0.3p = £1.50
Fee: nil
Extra benefit:  Spending £10,000 triggers a free Hilton HHonors Gold card
Return to cardholder:  £61.50 plus a Hilton HHonors Gold card (0.61% of spend plus the value of HH Gold, this has value as you will receive free internet and free breakfast)

IHG Rewards Club Visa (free version):
Base spend: 10,000 points @ 0.5p = £50
Extra points on £500 of IHG spend: 500 points @ 0.5p = £2.50
Fee: nil, you also receive IHG Gold status – this has no real value however
Return to cardholder: £52.50 (0.52% of spend)

IHG Rewards Club Premium Visa (paid card):
Base spend: 20,000 points @ 0.5p = £100
Extra points on £500 of IHG spend: 1,000 points @ 0.5p = £5
Extra points on £2,500 of foreign spend: 5,000 points @ 0.5p = £25
Fee: £99, you also receive IHG Platinum status – this has only very modest benefits however
Extra benefit:  Spending £10,000 triggers a voucher for a free night at ANY IHG hotel.  I assume you use this at an InterContinental for a room worth £250
Return to cardholder: £130 of points + £250 of free night – £99 fee = £281 (2.8% of spend)

Marriott Rewards MasterCard:
Base spend: 10,000 points @ 0.5p = £50
Extra points on £500 Marriott spend: 500 points @ 0.5p = £2.50
Extra points on £2,500 of foreign spend: 2,500 points @ 0.5p = £12.50
Fee: nil, you also receive Marriott Silver status – this has only very modest benefits however
Return to cardholder: £65 (0.65% of spend)

Starwood Preferred Guest American Express:
Base spend: 10,000 points @ 1.5p = £150
No foreign or SPG spend bonus
Fee: £75, you also receive SPG Preferred Guest Plus status – the benefits of this are intangible (4pm check-out, ‘enhanced’ room)
Return to cardholder:  £150 – £75 = £75 (0.75% of card spend)

The results of this analysis are not great news, to be honest.   The stand-out winner is the IHG Rewards Club Premium card which, even adjusting for the £99 fee, would get you £281 of ‘value’ for spending £10,000.

The other cards do not perform incredibly well.  If you can find a Visa or MasterCard cashback card paying 0.5% or more then – as cash is more flexible than points – I would choose that over the Hilton, Marriott or free IHG cards.

The SPG Amex is especially poor at the level of £10,000 annual spend.  You can easily get 1.5%+ of value from other Amex-branded travel cards (BA Amex 1.5 Avios per £1 plus the value of the 241 voucher at £10000 – albeit with a £150 fee, American Airlines / Lufthansa / Etihad 1.5 miles per £1 on a free card etc) compared to 0.75% here.

Tomorrow, I look at whether a heavy spender of £25,000 per year gets a better return or not as various bonuses kick in …..

(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.)

Comments (31)

  • What's the Point says:

    I am always a bit surprised that IHG, Hilton and Marriott don’t offer AMEX cards in the UK.

    • Rob says:

      …. especially as Barclays has now started issuing Amex cards. I expected the relaunched Hilton and IHG cards to be a double pack, but no.

  • nerd. says:

    As per a previous commentor, I wouldn’t use any of these cards for overseas spending given the high fees (happy with my Halifax Clarity credit card for that!)

  • Andy says:

    The HHonors Gold card works for me as four x breakfasts per day is worth a fair bit (2 x adults and 2 x kids) – especially on our Florida trip. The points earned with the £10K spend also help here as a couple of Hilton resorts offer the Points + money option so we can get a room for $40+8000 points (for example). I don’t the card for overseas spend though due it’s 2.99% loading.

  • Lostantipod says:

    Your capital one analysis is not like for like – this thread is about long term spend and excludes first year benefits in arriving at its answers. I don’t recall what They were, but the IHG card came with first year benefits on top of the analysis used at the start of the thread.

    • SingingDwarf says:

      My comment does include detail of long term spend – it does not concentrate on first year benefits only.

      I did however forget to include the annual fee in my calculations. In my defence, it was late though!

      As they say, cash is king! Hotel chains devalue points frequently, usually by more than inflation devalues cash!