The relaunch of IHG Rewards Club – which I discussed here – is meant to take place on July 1st. Things seems to have been delayed and, whilst it is likely that the new and still unnamed top tier will launch on that date, there will be no major changes to the benefits package until 2016.
IHG has been making a few other tweaks in advance of the relaunch. One which has been kept very low key is this:
Sign-up bonus points on the IHG Rewards Club credit cards are no longer counting towards status.
This change has already taken effect and I have heard the first reports of bonus points posting and not being shown as counting towards status progression or renewal.
For clarity, point earned from spending on the credit card WILL continue to count towards status.
Ironically, whilst the sign-up bonus used to count towards status, it didn’t really make any difference. Holders of the IHG Reward Club Premium Visa receive Platinum status for as long as they hold the card. As Platinum is currently the top tier, you didn’t need to bother about status points as you were already as high as you could go.
That is about to change. From July 1st, there will be a new tier – Diamond is the rumoured name. Diamond will require 75,000 status points per year.
Suddenly, the status points from the sign-up bonus on the credit card became useful. The Premium Visa comes with a 20,000 points bonus and it can be as high as 60,000 points during promotional periods. That would have put you 80% of the way towards Diamond status – and if Diamond turns out to have some good benefits, it would have been worth doing.
That is no longer an option. With the sign-up bonus on the credit card no longer counting towards status, anyone wanting to earn Diamond status will have to do it the hard way – by spending a lot of money in Holiday Inn, Crowne Plaza, InterContinental etc hotels.
Very few people will have the capacity to earn it via the alternative route – by putting £37,500 a year through the IHG Rewards Club Premium Visa at 2 points per £1.
If you are self employed, it may be worth thinking about it. Paying £37,500 of income tax, PAYE, NIC or VAT via your IHG Rewards Club Premium Visa card would incur a fee of 1.4% (£525). You would get 75,000 IHG Rewards Club points for the spending which would be worth around £375 if used sensibly.
That leaves a gap of £150. However, one benefit of the new top tier will be a 25,000 point annual bonus which you could value at £125. This means that £525 of credit card fees to the Inland Revenue would earn you 100,000 IHG Rewards Club points and Diamond (or whatever it will be called) status.
If you are paying VAT or PAYE for your business, you may also be able to deduct the credit card fee as a business expense. This is not possible if you are self-employed and paying your income tax bill, however.
We should learn on July 1st whether Diamond status is worth that much trouble or not ….
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