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The free IHG Rewards credit card is closed to new applicants – what now?

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The UK rewards credit card market took another hit yesterday when applications were halted for the free IHG Rewards credit card.

If you look at its website, Creation – the issuer – has removed all of its remaining UK credit cards from the market. It also appears to have closed its personal loans business. The bottom line is that Creation is, apparently, no longer accepting new business for any directly sold product.

This is what is showing online:

Creation credit cards closed

We rated the IHG Rewards credit cards highly

The IHG Rewards Premium credit card – the version with the £99 annual fee – was closed in April 2020.

We liked the card so much that we gave it an ‘Editor’s Choice’ award in the Head for Points 2019 Travel & Loyalty Awards. The headline features of this card were:

  • £99 annual fee
  • 20,000 IHG Rewards 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 for as long as you held the card
  • 4 IHG Rewards points per £1 when you paid at IHG hotels.  This would be roughly a 1.6% return which is very good.
  • 4 IHG Rewards points per £1 when you used the card abroad
  • A free night voucher for any IHG hotel for spending £10,000.  Used at the InterContinental Paris, London, New York etc, 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 Rewards Club mastercard closed

The free IHG Rewards credit card wasn’t as good

Whilst the £99 card closed in April 2020, the free card continued to be offered.

We were less excited about the free IHG Rewards credit card, to be honest. That said, it was actually one of the most generous Visa or Mastercard credit cards on the market for travel rewards or any other reward.

It only earned 1 IHG Rewards point per £1 spent, half the rate of the paid card. However, as we value an IHG Rewards point at 0.4p, this meant a 0.4% return on your spending. It is very difficult to beat this with a free cashback or pseudo-cashback (ie store vouchers) Mastercard or Visa.

You didn’t get a free night voucher, unfortunately. You did get IHG Rewards Gold Elite status for as long as you held the card, which was a decent benefit for a free card.

The points you earned DID count towards IHG Rewards status. As hitting Spire Elite status at 75,000 base points (currently 55,000 base points) earns you a bonus of 25,000 IHG Rewards points, the card could be more lucrative than it looked.

Let’s imagine that you averaged 50,000 IHG Rewards base points per year from hotel stays. Spending £25,000 on the free IHG Rewards credit card would give you the extra 25,000 base points needed to trigger Spire Elite status at 75,000 points, and thus the bonus 25,000 IHG Rewards points.

Suddenly your average return on your card spend would double to an average of two points per £1. You’d also have a higher level of status next year than you would have otherwise achieved. It was an attractive package.

IHG Rewards credit card closed

What next?

Good question.

Hilton Honors hasn’t managed to launch a replacement credit card, almost four years after their Barclaycard-issued product was closed to new applicants. It doesn’t bode well for IHG in finding a new issuer.

That said, the market is changing. The environment is now better for small card issuers to enter the market with digital-only or digital-first products, and a low cost base would hopefully allow enough margin to fund rewards.

The hotel companies also have more flexibility than airlines in being able to offer status as a card benefit. The cost of giving out status is low, since it is down to the independently owned hotels to fund your benefits, but it is valued by cardholders.

IHG led the way in counting the points you earn from card spend towards status, which was smart.

The only notable Visa or Mastercard with travel rewards now available is the Virgin Atlantic Rewards Mastercard. This is a very generous card, made possible because Virgin Atlantic and Virgin Money have a genuine partnership. Virgin Money doesn’t buy Virgin Points at arms length – the two companies have set up a joint venture company to run the card, allowing the airline to share in card fees, interest payments, FX fees etc. This allows it to sell Virgin Points into the joint venture at a low cost, allowing a generous earning rate.

For clarity, IHG has confirmed to me that existing IHG Rewards credit cards will remain open. You don’t have to rush to find a replacement.

That said, if Creation does intend to leave the UK entirely (it is a French business) it is likely that it will look to exit its existing loan book. This could mean:

  • your IHG Rewards credit card is closed down and you pay down your balance over time
  • your card account is sold to a new issuer, who may or may not continue to give you IHG Rewards points on your spending
  • your card account is transferred to someone else who has agreed to launch a new IHG Rewards credit card

Let’s see.

IHG One Rewards update – June 2022:

Get bonus points: IHG One Rewards is offering bonus base points on all cash stays between 18th May and 31st August.  You earn double points on your 2nd to 5th nights, triple points on your 6th to 14th nights and quadruple base points from your 15th night. Our full article is here. Click here to register.

New to IHG One Rewards?  Read our overview of IHG One Rewards here and our article on points expiry rules here. Our article on ‘What are IHG One Rewards points worth?’ is here.

Buy points: If you need additional IHG One Rewards points, you can buy them here.

Want to earn more hotel points?  Click here to see our complete list of promotions from IHG and the other major hotel chains or use the ‘Hotel Offers’ link in the menu bar at the top of the page.

Comments (169)

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

  • Entitled says:

    You say that Hilton have not managed to launch a new card but are they actually trying?

    • Rob says:

      Yes, they have been for 4 years.

      The job description for the new EMEA loyalty director maternity cover role published this Summer discussed the need for relevant cobrand experience.

      • Jonathan says:

        Do we have any idea if the credit card idea has been quietly retired ?

        Hopefully there isn’t going to be any significant changes or downgrades from the current rewards scheme they offer.

        The last time I asked (sometime last year), you said that there’s no updates but these things move slowly.
        If they do get one up and running, they’ll almost certainly get a lot interest, due to being a HfP favourite when booking hotels that don’t belong to big chains, and also from those who prefer to collect from credit card spending towards hotel stays over air line reward seats

  • Andrew says:

    When a financial services company isn’t open for new business, then all there is left is the attrition of the personal loan book over the next 3 years and the considerably cost of running a card servicing platform for what’s left of the Mastercard book.

    I’m guessing that the current “still open for business” stance is in place until the UNITE have been approached as part of the redundancy process and the rbook transferred to another bank.

    • Rob says:

      These are GREAT jobs to have, it is essentially what my wife is doing now. You get paid huge amounts because you know where the bodies are buried and no-one else would be able to come in and do the winddown. You are paid what you used to earn as a deal-doer for about 1/3rd of the work.

  • Matarredondaaa says:

    Having had both cards since inception U don’t recognise the comments made on here as have always had good service, no IT or customer service problems and earned a large number of points far more relevant than any other reward card so personally hope this is not the end of the road.

    • Irons80 says:

      I would agree with you – I have the £99 card. Only use it for hotel stays and meeting bookings at IHG and some other bits to get me to the £10k free night and I have had no problems at all with the card or the service and the app is very good. Most people who seem upset are those who are annoyed that the loophole of manufactured spend has been closed. Similarly, I actually earn my IHG status through stays and the extra points earned from paying with the card, so I am happy and I am fully aware that IHG and Creation make money from my custom…

      People who want / expect the world for free are delusional if they think brands won’t eventually figure it out and kick them out. Why would any brand want freeloaders on the books who actually cost them money? All the curve people who were gaming the system knew what they were doing – and they actually risk shafting the rest of us with their shenanigans but I don’t suspect their care…

      • Matarredondaaa says:

        Agree 100%

      • Craig V says:

        Completely agree. There’s quite a number of us who have had their card accounts closed even though there’s no ms. no Curve, etc.

        • Lady London says:

          Exactly Craig. I agree with Matarredonda and Irons80 that it’s completely unfair. But Creation not having dealt with this previously should not cost you the benefits you were promised in the card agreement, that you have earned.

          You are exactly the sort of cardholder that has a right to be aggrieved and should complain to FOS and MCOL as well. Your contract with Creation is individual and you are entitled to receive the benefits promised and earned.

          Note the valuation of free night should be ‘your’ valuation. Reader Anna has an excellent case for the value of hers being about £750 as she was planning to add the free night to an existing planned stay of that kind of value, in a place she regularly visits, and she has associated air fares booked. Most claims would be more modest but IIRC the 40 000 point value ceiling that applied to US cards was not applied to others. If you had nothing specific in mind for your free night then the retail value of 40,000 IHG points might be a start.

          But I agree with you, Craig, only those who were not mis-users should pursue this.

          • Irons80 says:

            I still have my card – it’s working fine.
            I am struggling to sympathise with those who manufactured spend and lost out as a consequence – they knew what they were doing.

          • Alan says:

            Yep I put 100k value on mine as that’s what I’ve used them for before as I always try to maximise the value!

      • Damien says:

        Don’t have a curve card, yet got removed unannounced. Only found out as I was heading away to IHG property. All they would say on the phone was “Business Reasons” and they would not elaborate at all. I suspect it’s because I’ve managed to use my vouchers in IC Maldives and Bora Bora. But I never broke any of their rules.

        • Lady London says:

          Claim, Damien.

          You are the sort of user who should not lose their contracted benefits due to Creation’s negligence, poor business strategy, or change of policy (I’m not sure which).

          Your contract with Creation is individual, and you are not responsible for their lacks nor for the misdeeds of others.

      • Genghis says:

        The offering from Creation was great but they were a shoddy operation:
        – points / night vouchers not transferring over when they should
        – payments to the account not actually posting and you had to chase them sending evidence that you’d made the payment – and then for some they charged interest even though payments made on time
        – customer service not really having a clue when you called
        I actually thought that there’s an army of workers in Solihull each doing manual processing.

      • JerrySignfield says:

        The IHG premium card was not profitable, how could it be when their income was wiped out by allowing their system to pay the card off with another credit card as Rob has mentioned before, let alone any rewards.

        • Alan says:

          Just to highlight this wasn’t some quirk, they actively mentioned it themselves on their phone line, so they can’t really complain about people doing it, they should just have stopped accepting CCs if they didn’t want to take them.

    • Damian Hill says:

      I agree, I just had a credit limit increase without asking.

    • Steve S says:

      Mines still working fine.

  • patrick says:

    I shall be toasting the golden goose in the I/C Maldives, Mauritius and Paris hotels over the course of the next few months all being well. It couldn`t last forever.

    • babyg says:

      maybe not forever, but it could have lasted a lot longer… except there were too many patricks flexing daily on how to rinse curve/creative….

    • pbcold says:

      I think you will find there is a significant difference between “flexing” before an opportunity is closed down and after it has disappeared. I realise some people enjoy attacking others for no reason though.

  • sayling says:

    Biggest benefit of the free card for me is the no-expiry date on points

  • BA-Flyer says:

    The Financial Ombudsman has told me that a complaint I submitted in July (not related to Creation), will take 12 months to review. (They told me this in December). With such a backlog in place, what hope is there that all the Creation complaints are processed before they exit the UK?

  • Comrade Chag says:

    Went to Pret this morning and the coffee was warm but not hot. I have now lodged a complaint with Creation.

    • Sandgrounder says:

      Are you on the subscription deal? Do you have problems accessing smoothes in your area?

    • Lady London says:

      Good one, Comrade Chag 🙂 Did you mean s.75? 🙂

      • Comrade Chag says:

        Rest assured, my Lady! I told the Pret manager that duty of care and EU/UK261 applies in this instance.

        I will follow with s.75! Also, MCOL them.

  • BillySillyWilly says:

    Hmmmm… So their refusal to activate my new card is likely to not get overturned then!

    • Andrew. says:

      They’ll probably issue a replacement card (if) when it’s migrated to a new platform or operator.

    • Lady London says:

      Did they give you 60 days notice?
      I believe a credit card is a revolving (ie rolling) credit. So the facilities in the agreement and card use need to keep being provided during a minimum 60 day notice period

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