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
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).
Your 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
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.
How to earn Avios from UK credit cards (June 2023)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous sign-up bonuses!
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
Barclaycard Avios Plus Mastercard
Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review
Barclaycard Avios Mastercard
5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review
There are two official British Airways American Express cards with attractive sign-up bonuses:
British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review
British Airways American Express
5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £12,000 Read our full review
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.
SPECIAL OFFER: Until 13th June, the sign-up bonus on The Platinum Card is doubled to 60,000 Membership Rewards points – and you get £200 to spend at Amex Travel too! Apply here.
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express
60,000 points AND a £200 Amex Travel voucher until 13th June! Read our full review
Run your own business?
We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.
Capital On Tap Business Rewards Visa
Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.
EDIT: Applications for this card are temporarily suspended due to IT issues with the British Airways On Business SME loyalty scheme.
British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.
American Express Business Platinum
40,000 points bonus and a £200 Amex Travel credit every year Read our full review
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.