Nooooo …. IHG has withdrawn the IHG Rewards Club Premium Mastercard, the UK’s best Visa / Mastercard credit card

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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.

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.

IHG withdraws the IHG Rewards Club Premium Mastercard credit card

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.

IHG withdraws the IHG Rewards Club Premium Mastercard credit card

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.

(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.)

No Virgin Atlantic passenger flights - zilch - for at least a week in late April
Are you listening British Airways? Air Canada shows how elite status extensions should be done

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Comments

  1. Aston100 says:

    I was hoping for an incentive to refer my other half for another BAPP (well within the 2 year period, so most likely no sign up bonus).
    I guess I better get that done ASAP in case Amex decide to withdraw or suspend cards soon?

  2. Its the curse of HfP. What do you expect after giving them a prize for being the most generous card? Wont be surprised if they felt embarrassed by how generous their card’s benefits were and how little money they make.

    • Given that Creation have withdrawn many other cards we don’t write about this ain’t it chief 😉

      • Sandgrounder says:

        It’s one of a long list. All sign-up bonuses for new bank accounts have gone, NatWest Premier is not available to new applicants, First Direct have stopped opening accounts (and blocked upgrades to First Directory), tons of mortgage products have been pulled. I have a secondary bank account with Starling, and I notice the overdraft that is always available to me cannot now be offered. As Rob said, pricing risk has become very difficult.

        • Some of these product pulls are as a result of not having the staff in situ to process paperwork.

  3. Gary_Dexter says:

    Creation said a while back that they are starting to reduce their exposure to the Credit Card market, even before this COVID-19 pandemic.

    I think they are slowly moving out from the Credit Card market and focussing on other areas.

  4. Harry T says:

    I failed their eligibility checker for the Premium card the night before this happened. Wish I understood their weird algorithms! At least they approved me for the free one, even though I’ll have to chase the enhanced bonus.

    Anyone reckon the Virgin Atlantic cards will get pulled soon? They are very generous with sign up bonuses and earning rates, and VS look in trouble…

    • Louise K says:

      My husband was rejected for the premium card too, albeit some time ago.

      We have a significant joint income so I couldn’t understand it.

  5. So without giving too much personal info away , has anyone else had their Amex card limits reduced? My BAPP and SPG cards have had savage reductions, I’m going to see if anything untoward has happened on my credit file but no payments missed on any cards for years…

    Is there a wave or risk reduction of have I just stood out somehow?

    • Just checked OH’s BAPP which has the biggest credit limit and no change as of now. He is public sector though so maybe they are applying changes based on the safety of your income?

      • I.e public sector and key worker so less likely to suffer reduced income.

      • No change on mine as far as I can tell.

      • Perhaps so.

        So, theres nothing in my credit file. Sl whatever the trigger is here it isnt a change in credit history. Job is secure (as secure as anyones) as the role is certainly not going anywhere..

        I’ll sent them a message and see what is said..

        • RedEyeDonkey says:

          Let me know what happened/if it’s worth bothering to contact them – mine were hit across the board – also for no reason that I can determine.

    • Just checked and my credit limit is still the same i.e. no reduction (yet).

    • Crafty says:

      None on any of ours.

    • Harry T says:

      No change for me. In fact, BA keeps helping increase my credit on my BAPP with refunds…

    • Lady London says:

      @Chrisasaurus I think you’re a “canary” and they may be processing customer accounts for this in waves. I suggest everyone keep an eye on the limits on their acvounts.

    • Spursdebs says:

      I’ve had one card limit reduced. There was an email review of account etc etc etc

    • I cancelled my gold credit card yesterday. (A few months after getting the gold, I changed my mind and decided I wanted a Plat, so it was always the plan to cancel the gold after the 10,000 anniversary points hit).

      Today I applied for the free Rewards Card, mainly just to get a second card with offers. Was unsure what would happen in the current climate, but got approved immediately with the same (high) limit that I previously had on the gold….

  6. Jumble Tales says:

    Ironically I’m due to pay the £99 annual fee renewal for the IHG Premium next week…

    • mvcvz says:

      More ironically, I paid mine last week 🙂 Hope it’s good for at least another 12 months as its been hugely advantageous for me.

    • Peter K says:

      Why’s that ironic? They aren’t closing the card to existing customers, just new ones.

  7. Cormac says:

    I have already closed a couple of cards recently to reduce the numbers I have, probably will not be any new cards signing up for in the future. When the Virgin Atlantic Rewards+ reaches the end of its first year I will be cancelling that as I would be paying the £160 fee without any bonuses for the second year. It will be interesting to see what Virgin Money end up doing with that.

    It looks like the days of surfing sign-up and switching bonuses will be over, as I do not think any credit card company or bank can afford to give much away at the moment! Looks like I will be using Amex MR and Aqua (had non-existent credit history when I got it and the flashback rate is decent) for the foreseeable future. Might be a good thing as I do not think chopping and changing frequently is good for the credit rating (though do not quote me on that as I am not a financial advisor!).

    • I’m not so sure, one might expect them to start wooing folk with money left to spend in the medium term?

    • Makes no difference EXCEPT that you should keep one card long term. Someone who has no cards older than 6 months obviously looks like more of a risk than someone who has a card dating back 10 years on their file.

      • Oh well my 23 years with my Narwest credit card will look good although rarely now use it as put everything on my IHG Black card.

    • Genghis says:

      I’ve had scores of credit cards over the years, used to do perhaps say 8 or 9 a year, and have never been rejected for any credit. Like with anything, I tried to be sensible to maximise the benefit and minimise the risk. Remember there is no such thing as a universal credit score, just the data that different credit institutions receive and each processes differently. Missed a few payments? To some you’re a risk, to others you’re an opportunity.

      • Cormac Murray says:

        Not sure if surfing for switch incentives with current accounts had anything to do with it. There won’t be any more of that for now. However I have never missed any payments, though that may mean no provider can make any money out of me.

  8. I luckily got my premium card last week. However first transaction was blocked for council tax. annoying but safety first … be aware of this as their system is a little overzealous and it could catch you out.

    Security unblocked, and 20k points have hit my online page.

    • the_real_a says:

      First transaction also needs to be chip and pin 🙂

    • Yeah, had pretty much the same experience shortly after I got mine last year. Their system is certainly more twitchy than most. I’m always nervous of using it for things like hotel reservations where you could get your stay cancelled if they fail to authorise your card. Ironic, given the the nature of the card….

  9. I’m using a free version and pretty happy with that (apart from the interest rate which is close to Wongas of this world)

  10. Crumbs says:

    My procrastination sometimes comes in handy. My card anniversary was last month and was planning to cancel and apply again in a few years. As usual didn’t get round to cancel it.

    Same with MBNA Horizon. Considered quite useless at the time, forgot it in the drawer and now it’s one of my favourite cards.

    • It’s not procrastination, it’s careful consideration 🙂

      Seriously, though, doing nothing in haste has stood me in good stead over the years.

  11. Doogie says:

    I applied on the evening of the 2nd and received the card in the post today, glad I didn’t hang around any longer!

    Surprisingly, compared to others, I got a higher limit on my black one than I have on my white one which I’ve held for a few years – got the same original limit as I previously had on the white before the summer 2019 limit reductions they seemed to impose to a lot of people.

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