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IHG has withdrawn the IHG Rewards Club Premium Mastercard, the UK’s best Mastercard credit card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

Comments (197)

  • EwanG says:

    I expect the attractiveness of the benefit and cost of providing the points and free night is also a large factor in Creation pulling the Premium card (possibly similar reasons for the others too) i.e. it is a bit more complicated than the reasons outlined above.

    Keeping the basic and Maximiles cards open for new applications still requires funding, back office processing, exposure via payment deferral so rather than shut up completely they are reducing business to a far lower level. I wonder if the credit limits on those two cards is also typically lower, again reducing exposure.

    • Genghis says:

      The limit I received on the IHG White card in Feb is much higher than they will give me on my existing IHG Black card. They’re a strange company.

      • The Urbanite says:

        I’m in the same boat with IHG White having a higher limit than IHG Black!

      • Bentoni says:

        The white card I have got has about 7x more limit the black card. They wouldn’t increase the limit on the black card, despite my numerous attempts to get them to approve it 🙁

        It’s currently my favourite card, since it’s much easier to get a hotel room than get a flight.

    • Rob says:

      I reckon it is contractual. Why not keep one of their own brand cards active?

      • Cal says:

        Hopefully that means that the Premium card can return. I was rejected early last year so I thought I would wait a while, hope I’ve not missed the boat entirely.

    • Lady London says:

      I’m also wondering if s.75 losses for claims are hitting them. This card would logically have more of those.

  • Sundar says:

    Shame, that card is very useful to get the annual free night.

  • Vit says:

    Rob et al, not an OT but more on a free (white) card questions:

    1. I have applied for the free card on the 28th March — a couple day before their cut off date to receive a total of 20k points once spending £500 within 3 months. Do you see Creation / IHG change this back to just a normal standard 10k?

    2. The approval letter sent to my address was dated 2nd April. Would that be counted against the 10k additional point (assuming I reached qualified spend)? even though I have applied for the card before the cut-off date?

    Appreciated any advices.

    Cheers,
    Vit

  • JAMES says:

    This can’t be their motivation or they’d have stopped them all, surely.

  • JAMES says:

    Is it still 20k points on the free one if someone applies now ?

    • Genghis says:

      No. Offer ended last month.

      • Rob says:

        Here’s what confuses me. Did IHG run the 20k offer knowing that the £99 card was ending, in an attempt to stop people applying for Premium? Was there a notice period being worked out? Did IHG want to stop Premium – not Creation – but Creation was insisting on the notice period and so IHG tried to use an increased bonus to reduce the flow of Premium applications?

        There is other stuff wrapped around this. Neither IHG or Creation told me that the bonus was changing (they don’t legally have to, since we are not paid on IHG card sales) but it was a bit odd nonetheless given my good relationship with both teams. They also turned down our offer to run some additional promotion on HFP.

        • Heathrow Flyer says:

          It would seem odd that IHG would want to stop the Prem card – giving how many points they must be selling every month Creation?

  • Dace says:

    I am glad I have this card. I honestly find it the best value card on the market now with what has happened with all the Amex cards and the taxes BA now apply.

  • 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?

  • Spk says:

    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.

    • Rhys says:

      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.

        • Sean says:

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