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IHG has withdrawn the IHG Rewards Club Premium credit card, the UK’s best Mastercard

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On Monday, IHG and Creation Financial Services withdrew the IHG Rewards Club Premium Mastercard from the market.

You would imagine that the credit card industry would be in a better place than most at the moment.  Compared to owning an airline, hotel, restaurant or retail chain, the credit card space seems very attractive.

Consumer spending may be reduced due to lockdown, but most people are still getting paid.  Those on 80% salary via furlough are probably no worse off after saving on commuting, will be spending far less on discretionary items and may even be able to pay down some existing debt.  People are at home and actually have time on their hands to deal with projects they normally put off, like tweaking their card portfolio.

It doesn’t seem to be the case, however.

IHG withdraws the IHG Rewards Club Premium Mastercard credit card

The IHG Rewards Club Premium credit card still shows on the main landing page here but if you click through you get a message saying:

Unfortunately, we are no longer accepting applications for this card and we apologise for any inconvenience that this may cause.

Is this a one-off?

No.  This isn’t the only card that Creation has pulled.  If you visit their home page you will see that they are only currently taking applications for two credit cards.

One of these is the free IHG Reward Club credit card which remains open to new applicants.

All of their other cards have disappeared.

I also know of some other cards – not ones we feature – which are about to be pulled by another issuer.

Why are credit cards being removed from the market now?

It is an old cliche that banks are happy to lend you money when you don’t need it, but won’t lend you any when you do.  The fact that it’s a cliche doesn’t stop it being true, however …..

The reality is more complicated.

As you may have read, the Government, via the Financial Conduct Authority, has instructed credit card companies to allow cardholders to miss up to three monthly payments without it impacting their credit report.  The same applies to personal loans.  This rule kicks in from tomorrow – note that you need to ask permission from your lender before you stop paying.

This is a problem for card companies because it means defaults will not be reported.  No card company would give a new credit card to someone who was three months in arrears on their existing cards, but it is now impossible to know if a new applicant is already in arrears or not.  Taking on new customers has become very risky.

Another issue is that customer acquisition is labour intensive.  As well as all the background checks – parts of which often need to be done manually – you will have customers who may need to call up to activate cards or set up direct debits.  Much of this cannot be done by home-based workers due to the necessary IT security required.

New lending also needs to be funded.  Card companies which are growing need to continually raise new money, from their shareholders or the debt markets, to fund purchases being made by their new cardholders.  There will also be a squeeze on funding as existing cardholders take advantage of the three month payment holiday.  Raising extra money is difficult at the moment.

IHG withdraws the IHG Rewards Club Premium Mastercard credit card

We loved the IHG Rewards Club Premium Mastercard ….

It is very sad to see this card go, if only because I now have to rewrite huge numbers of HfP evergreen articles which discuss our favourite credit cards ….

We liked the card so much that we gave it an ‘Editor’s Choice’ award in the Head for Points 2019 Travel & Loyalty Awards.  Above is a photo of the IHG and Creation team collecting it at our winner’s dinner.

The headline features of this card were:

£99 annual fee

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

Platinum Elite status in IHG Rewards Club for as long as you hold the card

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

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.

It is important to note that points from day-to-day spend counted towards elite status.  A heavy spender could get Spire Elite status – requiring 75,000 points – simply by putting £37,500 of spending through this card.

IHG withdraws the IHG Rewards Club Premium Mastercard credit card

This is what the IHG Rewards Club Premium Mastercard could get you

For long term spending IHG Rewards Club Premium was a very good card.  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 were getting £330 of benefits for an annual fee of £99.  That was a gain of £231 or 2.31% of a £10,000 spend, which was excellent.

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

To my mind, there was no better Visa or Mastercard available in the travel rewards sector.  I will do a piece over the next week or so on what I now recommend.

For clarity, if you currently have the IHG Rewards Club Premium Mastercard then I wouldn’t worry.  Creation has confirmed to me that nothing will change for existing cardholders and that the free version of the card will continue to be available.


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American Express Preferred Rewards Gold

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Comments (197)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • guesswho2000 says:

    Shame, glad to hear no change in the short term at least for existing holders.

    That and the Hilton card are my two most useful UK cards.

    • Lynn says:

      I have been looking out for a UK Hilton card but couldn’t find one, please can you give me further details?

    • Boi says:

      I love my Hilton more- easy to accumulate points with it!

      • Crafty says:

        The combination of the two is by far my most effective set of tools.

  • jil says:

    Does it mean the premium card will come back once the covid situation is over?

    • Micky says:

      Obviously not

      • Genghis says:

        Why?

        • Anna says:

          +1 – the reasons given by Rob will hopefully not be necessary in a few months so no need for them to discontinue the card permanently.

          • Paul Pogba says:

            It makes perfect sense to suspend applications if you don’t know someones credit history or aren’t allowed to make decisions based on it if you do, but if that’s the reason for pulling the premium card why is the free one still available?

    • jc says:

      Every reason listed is a temporary one. It’s likely to return.

      • Rob says:

        The general view in the industry – which may not be true, but everyone in the card world believes it to be true – is that these cards are massively loss-making for Creation. No-one else even bothered to tender for the original contract – New Day, Barclaycard, MBNA/Lloyds etc did not submit an offer.

      • Lady London says:

        I can’t think of a single loyalty card that’s come back once cancelled.

        I did wonder if Creation being owned by BNP whether Accor was finally launching a card as their newish CEO seems quite commercial. (Both being French.) This might conflict with IHG but perhaps they have a 5 year branding agreement with IHG so have had to keep the lowest level card going for awhile.

  • Henry says:

    If only Hilton opened a new Uk mastercard.
    Diamond for 20k spend
    Gold for 10k spend
    And 2 points per £
    Come on Hilton lol.

    • mark2 says:

      and 10% statement credit on all purchases?

    • Mr(s) Entitled says:

      I would take a Hilton card pretty much regardless. My only criteria would be for it not to cost me money.

      • guesswho2000 says:

        I’d happily pay an annual fee akin to the US Aspire card for inclusive Diamond. Oh well, one can dream!

    • N says:

      And you get a free hotel for £30k spend?

  • Luckyjim says:

    Creations Marriott card was still in use for a long time after it was closed to new applicants. Hopefully this will be the same.

    • The Original David says:

      “was”? Mine still is!

    • TGLoyalty says:

      That’s still in use but what only stopped because no one at Marriott had/has the correct accreditation to offer credit product.

    • luckyjim says:

      Did they allow you to renew after the expiry date? Or have you just not reached the expiry date yet ?

  • BJ says:

    What does this mean for new credit card applications in general? Best to get them in today/soon before this new three month issue adds umcertainty for lenders? Any evidence from our older readers that card companies are declining applications from people over 70? My dad wants a new card but is reluctant to apply as he thinks amex will be less likely to approve cards for at risk 70+ applicants.

    • John says:

      Just apply, what is he scared of? Not like he is trying to have no recent searches on his credit report in preparation for an upcoming mortgage application….

    • xcalx says:

      89 yrs old nana xcalx has had Plat, Gold x2 , SPGx3 and the BA card over the last 6 years, the last was Gold 4 months ago. Strangely she was declined for the Nectar a few years ago.

    • Andrew (@andrewseftel) says:

      It’s a real pain putting age in a scorecard ever since Equality Act. I doubt any risk team would want the compliance hassle (at least at an issuer with a well-run compliance function).

    • Lady London says:

      I would not cancel any card right now as harder to get one from now or quite soon

      But I might roll the dice and apply for another one quick if I wanted one as all the shutters are rolling down for awhile. If it becomes clear that any card provider would approve but unhappy with the overall credit I have at my disposal I might give some thought to cancelling that card that is owned by Clydesdale if I had it. But as it’s a credit line I would only do so if it made sense to enable me to open something else.

  • Benilyn says:

    How long does the free night voucher last again?

    • Phil says:

      A year. You get it on the anniversary and have around a further year to book your free night. There is a slight overlap of a few weeks so you can end up holding 2 vouchers at the same time which is handy

    • Alan says:

      A year although apparently 18 months for ones issued during the crisis?

      • Liz says:

        I earned my new one last month and it was only issued for a year. Keep checking it but it’s still showing 1 year.

        • Roy says:

          Don’t hold your breath. It took them a few weeks to update the IT to show the reduced points required for elite levels, so I would expect this change to similarly take a while for the IT to catch up.

  • Douglas Soper says:

    Does the large number of S75 claims on credit card companies for airline refunds etc present a real threat to the financial viability of credit cards generally? Is this a factor in these decisions to pull cards?

    • Rob says:

      Don’t think so. These costs are all recharged as long as company is still alive.

      • memesweeper says:

        The claim cost is usually recovered. However the admin costs, which are in normal times a tiny cost and just one of those ‘costs of doing business’, are no doubt spiralling right now. Non-borrowing customers must surely be a large liability for card companies at the moment. This year already I’ve done more s.75/chargeback than in my previous life to date.

  • Neil says:

    Damn, I was going to be applying for one in the next couple of months as I needed to make a large payment.

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