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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 – May 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.

You will receive an 80% bonus when you buy IHG One Rewards points by 10th June 2022.

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.

  • Scott says:

    My card expired end Oct. Twice sent a secure message to be told replacement card had been ‘requested’ and then ‘sent’. Still waiting for the card to arrive, and my third message has gone unanswered.

  • RussellH says:

    How many years is it now since Creation’s Marriott M/C was closed to new applicants?
    I know that I am not the only one here who uses a Creation Marriott M/C on a regular basis still.
    And I have had an IHG white card since they were first launched – for a time I still had both the Priority Club Visa and the IHG M/C until the Visa card died.
    Still have my Hilton Visa too.
    The big question is whether BNP actually want to leave the UK market or not? They have always been one of the smaller players in the UK, surely, and it must be harder for them now with the UK outwith the EU…

  • Lady London says:

    Doesn’t Creation still run a number of store cards? Presumably they’re going to have to stay in the UK market until they can get rid of those too.

    This news is all the more reason to MCOL Creation now for the retail value of all benefits that have been earned but not paid out by Creation. It’s looking like if they can, Creation is intending to do a “dump and run” ie close their UK business without settling their outstanding debts. The French year end is normally calendar year. Is Creation planning to put their UK entity into insolvency this year or next year?

    In these situations speed is of the essence as “possession is 9/10th of the law”.

    I would go straight to MCOL immediately. You have to have raised the issue using Creation’s process first to show you’ve tried to resolve it with them. Remember 8 weeks unresolved or ignored, or 3 asks and refused, or refused anytime with a “that’s our final answer” or a refusal by them to deal with it any more : that’s a reasonable effort made by you to resolve before you MCOL.

    MCOL is submitted all online via moneyclsim dot gov dot uk. It may be judged online as well, or possibly “heard” by phone call. It’s unlikely a personal appearance in small claims court (which this is) will be required. Intelligent companies often settle before the court datw. Make sure you’ve requested anything you claim in mcol, directly with Creation, the relevant amount of time or requests above. Give them, say, 28 days to respond on a first request. Ideally use the words “formal complaint” as that removes wiggle room.

    FOS does have the subtle pleasure of Creation being charged £750 for each complaint. But in an effort to clean up their act FOS is grouping complaints so this may not end up as satisfying as it should. FOS amounts I’ve seen awarded for stress and trouble caused trying to get justice have also been pretty measly. Also can we afford the time when it looks like Creation’s plan is to do a dump and run of promises they made in the UK?

    Claim (1)pro rata card fees for any month in which card use was restricted or withdrawn (2) the value of any free night (3) IHG’s selling price retaik for any points not awarded. If you’re really adventurous claim pro rata value of any partially accrued nights as well – unless they’ve fairly accused you of misuse – as their closure is unilateral so if you’ve been a good boy and they still close you not for cause then IMV the contract is unfair.

    • JDB says:

      @Lady London – the idea that a bank of the stature and calibre of BNP Paribas might ‘cut and run’ is beyond absurd. There can be no question they will not honour their obligations, even if they may dispute claims at FOS/MCOL.

      Also, if you are going to advise people to rush off to MCOL, you should at least point them to the MCOL guidance and the link therein to the Civil Procedure Rules. You will see there that the Court expects you to use statutory recourses such as Ombudsmen before issuing proceedings (and follow other pre-action protocols). Failure to do so may result, inter alia, in a case being struck out and places one at risk of costs. Judges takes beaches of the CPR seriously and the other side will leap on it. Excuses such as likely delays at FOS or no reply from Creation simply won’t wash. Anyone who does want to go to MCOL before the FOS should at least do so with their eyes open.

      Whatever you think of the FOS, that is the statutory body with extensive powers set up to deal with consumer vs financial services company disputes in the first instance and quite different say to CEDR which is a voluntary arbitration scheme.

      • Lady London says:

        I knew you’d say that, JDB.

        JDB is the position of the CAA, so far as the aviation industry is concerned, any different from FOS in the finance industry?

        For example I know that theoretically in the case of an EU261 problem with British Airways, Europe views the national aviation regulator, in this case the CAA, as the entity the consumer should turn to for enforcement.

        But if a dispute under EU261 fails with British Airways I’d MCOL. And so have lots of people. They didn’t have to go via the CAA.

        • JDB says:

          Yes, the position of the FOS within the system is quite different. The FOS is a body created by statute as are, for instance, tax tribunals to resolve disputes between relevant parties and consumers. The FOS can do more than the tax tribunals, such as consider fairness principles (a hotly debated issue in tax circles) and its decisions are binding, if accepted by the consumer. The CAA’s remit vs consumers is quite vague and limited and to a certain extent conflicts with its general remit of acting in the best interest of aviation in general.

      • TGLoyalty says:

        12 money delay at FOS not enough to go straight to MCOL? It’s completely unreasonable.

        • JDB says:

          No, I do not believe delays be considered a reasonable excuse and the court system suffers significant delays as well; courts/judges are struggling. MCOL is expected to be a last resort so using it effectively to try to jump another queue doesn’t look too hot . The FOS is actually currently reporting delays of c. 4 months for credit card issues as they aren’t usually that complex. There are longer delays on complex/specialist matters as there are fewer staff who can handle them. Bear in mind the 4 months relates to the case being allocated to a handler who will then probably take up to 90 days to make a preliminary decision, and if either party objects to that decision, there will be a further delay while additional submissions are taken and a final ombudsman decision made.

          Make sure any submission is complete and all relevant documentation attached, ideally with a chronology and index. If you leave anything out they won’t tell you for a few weeks, then you will go to the back of the queue again once they get the missing stuff.

          • memesweeper says:

            I complained twice to Creation in writing and had no reply. I thus lack the material with which to ‘appeal’ to FOS. I’ll likely go direct to MCOL.

          • TGLoyalty says:

            I’m sure you’ll be absolutely fine.

          • Track says:

            @JDB you should have a better grip on FOS operation stats.

            I have cases where complaint raised March 2021, company response received by FOS April 2021 — and no allocation to a handler as of late Sep 2021.

          • Alan says:

            Agree and very helpful, JDB.

        • Lady London says:

          Agreed.

          1. Complain asap to Creation asap for all that you’ve not received if you haven’t already.
          2. Complain to FOS if you want to cover all the bases as JDB says.
          With a bit of luck FOS will give dates unreasonably far into the future as above. They’ve been saying recently they’ve virtually caught up on their backlog. So them keeping somebody waiting for 6 months then they get told it won’t get heard by FOS for a further 12 months smacks of Creation desperately trying to shore up their position for FOS and getting delays

          3. Go to MCOL as fast as you can

      • Track says:

        It is absolutely not an absurd to reason that if a large corporate parent can avoid liabilities of a subsidiary — they will do so. Including closure of business, cease to trade, bankruptcy (of a subsidiary) in different jurisdictions.

        BNP Paribas does not have to, and will not prop up an unprofitable business.

        If Creation makes steps that makes it likely that it will cease its operations — that can be a reason to seek damages (on non-performing contract / breach of contract) sooner and direct from courts, rather than arbitration or FOS.

    • Andrew. says:

      They used to run Store Cards, they exited Asda a few years back.

      It’s mostly SCS, DFS, Dreams & Curry’s buy now, pay later stuff these days.

  • JerrySignfield says:

    They are most definitely planning something and are likely to make it hard for anyone seeking anything back from the IHG card saga, I still haven’t had a replay after the 8 weeks waiting, rather pathetic all round.

    The credit card as a business product was not fit for purpose and completely unprofitable. If someone higher up found out these card were losing so much money, they would probably fire the person in charge and cancel all the card giving no reason and no refunds, oh wait…

  • Tony1 says:

    So extrapolating …. the Accor Card is now dead to the UK ?

  • SammyJ says:

    I have Platinum rather than Gold with the free card, I thought that was standard, and something that changed a few years ago? Or have I got Platinum for some other reason? It’s certainly not from paid stays!

  • VJ says:

    I received a letter on Black Card closer complaint. Letter says they were right in closing my account no refund/free night will be granted. Advising me to contact Financial Ombudsman Service. I wonder we have a thread going on in forum somewhere suggesting next steps. Thanks

    • memesweeper says:

      See ‘creation bashing’ in the forum

    • Harrier25 says:

      What reason do they give for being right? Or is claiming to be right the extent of the letter received….which wouldn’t surprise me?

    • Mikeact says:

      VJ…naughty boy ? Always frustrating to not hear the full story, particularly when one off posts are dropped in.

    • Lady London says:

      Shocked that Creation think the law lets them just say anytime “You’re not getting any fee back and you’re not getting the free night we promised and you earned because we’ve made a ‘business decision’ to close your account.” So..anytime Creation doesn’t feel like honouring a contracted benefit they can just claim “Oh, we made a *business decision*.

      I want their face to be wiped in the mud on this and if the FOS doesn’t make Creation keep its promises then it’s time the FOS was removed.

      Always assuming your card was run in accordance with any t’s and c’s you signed up to on opening or were later advised of with the requisite 60 days notice before any implementation.

      • youneedtobeyourself says:

        Even if the card was not “run in accordance with any t’s and c’s you signed up to on opening or were later advised” I’m not sure they can just cancel a paid product with no fee refund or advertised benefits, it is at very least a grey area. Consumer law is very strong.

      • Harrier25 says:

        The FOS should have been reformed years ago. It’s not fit for purpose and Creation know that, as they pack up their berets and onions and head off back to France on their bicycles wearing a grin behind their little curly mustaches.

        • Lady London says:

          FOS has a new lady running it who has started quite a good clean-up if you believe the statements issued. But one of their strategies is to group complaints to try to expedite and make their throughput better. So I am very unsure whether they will stop Creation’s antics if it all falls into the hands of someone there who won’t tell Creation this is unfair. So although FOS is saying they’re massively improving I am not sure we can rely on them yet.

    • Richard says:

      They may be entitled (‘in law’ – under the T&Cs) to close the account part-way through the year, but that does not make it “fair” – which is what FOS will consider. It is unfair because: (1) you have paid an annual fee so you can make use of the benefits over the course of that year, but that period has been cut short without any pro-rata refund of that annual fee, and (2) you have earned a free night (or would have had the opportunity over a full year to earn a free night) but they aren’t going to credit it to you.
      On top of that, it is unfair – and in breach of the T&Cs – to deprive you of the benefits under the agreement during the notice period (particularly where they have not given notice of the deprivation of those benefits!). That is, any IHG Reward points earned during the notice period were not credited to your IHG account.

      • Lady London says:

        Richard be careful. I would suggesr you take the line that the annual fee is for card use only. Perfectly reasonable aa in many places cards are chargeable just to have including some in the UK.

        The reason is i would relate getting the benefits to the actions you muat take that earn those benefits regardless of time period in which they are earned. You could spend enough to earn your free night on the first day of a new card year. But operationally it gets received at the end of the year. Your claim is to still receive the night as you fulfilled your part of the contract ie you spent. Creation will say your receiving the free night does not survive their unilateral termination of the contract or the unilateral suspension by them of your card usage which for a consumer – perhaps not for a business – is unfair. So to avoid survival issues as much as possible iwoukd not say nights and pointa are earned in excgange for the card fee they are earned only by suffucient amounts being spent. The card fee is just to have it in your waller ready to use.

    • Lady London says:

      PS That bit about going to the FOS is only in the letter from Creation because they’re legally obliged to put it in. No other reason, it’s standard boilerplate for complaint response.

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