Signs That A Hotel Credit Card May Be Too Good To Be True?

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You know the saying: “if it sounds too good to be true, it usually is.”

One card that I’ve felt that way about for a while is the IHG® Rewards Club Select Credit Card. The card has an annual fee of just $49, and that fee is waived the first year. That’s one of the lowest annual fees on any “premium” hotel credit card. While it’s not a card I put a lot of spend on, it’s one which I’ve found to be worth holding onto long term. I also think that for most people this is the best value hotel credit card, and that having this card is a no brainer.

What makes the IHG Card awesome?

There are three things that make this card especially compelling, in my opinion:

Get an annual free night at any IHG hotel

This perk is huge. Just for paying the $49 annual fee each year you get a free night certificate that you can use at any IHG property. This includes InterContinental hotels that ordinarily retail for over $500 per night. For example, earlier in the year I used this free night at the InterContinental London The O2, where the paid rate would have been almost $500 for the one night stay.

IHG-Free-Night

But even if you’re not going for an aspirational property, I think a vast majority of people can get more than $49 per year of value out of an annual free night.

Get a 10% refund on the points you redeem

You can receive a 10% refund when you redeem your points, for a total of up to 100,000 refunded points per year (that means it’s valid for up to a million redeemed points per year).

Keep in mind that IHG often also sells points at a very reasonable cost, which can be even more worthwhile if you’re getting a 10% refund when you redeem those points. That makes redemptions at some high end properties more worthwhile.

IHG-Points-Refund

IHG Platinum status for as long as you have the card

You receive IHG Rewards Club Platinum status for as long as you have the IHG® Rewards Club Select Credit Card. I’ll be the first to say that Platinum status isn’t that great, but it’ll often lead to a room upgrade, and you receive a 50% bonus on earned points.

For example, at the Crowne Plaza Doha I received an upgrade to a suite for being a Platinum member.

Crowne-Plaza-Doha-09

Signs that perks may be changing?

I have no inside knowledge here, though a friend just shared with me a survey he took regarding this card, which asked how he would feel if two benefits were changed:

  • Requiring an annual spend of $5,000 in order to earn the free night certificate
  • Requiring an annual spend of $20,000 to earn IHG Platinum status

Again, this was just a survey, so it’s clear they’re just testing things out at this point to see how people would respond. Personally I’d still consider it worthwhile to spend $5,000 per year on the card for a free night at any IHG property, while I wouldn’t spend $20,000 on the card per year for Platinum status, given the limited perks.

My point is that I think it’s inevitable that we’ll see the card stick around in its current form forever, as it really offers outsized value. It has a lower annual fee than most other premium hotel credit cards, while also offering an annual free night with no category or day-of-week restrictions.

Bottom line

The IHG® Rewards Club Select Credit Card really does offer outsized value. The annual free night alone more than justifies the card’s annual fee. It’s clear that they’re considering possibly tweaking the benefits of the card, which I can’t blame them for.

I absolutely think it’s worth signing up for this card under its current terms. If they do make any changes in the future, I imagine they’ll continue to honor the current perks for existing cardmembers for some amount of time, which is all the more reason to get the card sooner rather than later.

Also keep in mind that this card isn’t subjected to Chase’s “5/24 rule,” so you can generally get approved for it even if you’ve opened more than five new accounts in the past 24 months.

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Comments

  1. “My point is that I think it’s inevitable that we’ll see the card stick around in its current form forever” – surely should be inevitable that we won’t see it stick around forever?

  2. It’s inevitable that the card will stick around in its current form forever? May want to reread that sentence.

  3. I received the same survey. There were about 10 different card options presented, some with a free night only good at Holiday Inn Brands and fees ranged from $29 to $129, presenting a variety of options included Global Entry & 4 lounge passes for those with a higher annual fee.

  4. Yes Applying for this card is exempt from the 5/24 rule, but it doesn’t mean it won’t count against you when you apply for a different one that does. You May want to clarify. Or not.

  5. I think that survey was a clear sign something will change. They’re testing to see what they can get away with. A couple times they mentioned 1:1 airline transfers. Looks like they’re toying trying to be the next SPG card/program. That would require some sort of change in their points. As long as they don’t implement the “Free night at any Holiday Inn Worldwide” instead of the any IHG hotel worldwide I’ll be happy.

  6. I imagine they’ll lose quite a few accounts if they implement some of those changes featured in the survey!

  7. Well, that is interesting. Makes little sense since IHG limits these certificates to dates when award availability is available and often pays hotels approximately $20 for the stay at least that is what I have seen on receipts that I have viewed.

    With either of those changes I would consider dumping the card immediately. Spending $5000 to receive the free night certificate is not a good value in my opinion. Sure, you earn IHG points on those purchases which currently I value at approximately .60 cents per points which would be worth $30 to $60 depending on spend unless you are charging the $5000 at IHG properties which would then make it worth $150.00. However, when moving this spend to IHG you are giving up on the opportunity to earn a minimum of 2% cash back on other cards and their are options that are even higher than this. As such, if you were to put the $5,000 on a 2% card you would earn $100 cash back. Therefore, the total opportunity cost is $49 for the annual fee plus $100 cash back or $149 – the $30 to $60 in IHG points earned so about $89.00 to $119.00. While I can find properties where this would be an excellent value still, it truly isn’t worth the hassle considering that a good portion of my spend is for travel and airfares where I can earn greater than 2% back on these purchases through Citi Prestige, Chase Sapphire Reserve, American Express Platinum, British Airways etc..

    The biggest issue with IHG is that the earning rates on this card are less than 1% typically whereas when I signed up for the card they were much closer to one percent which used to be the gold standard for cash back. In fact, with the continual increase in points required for redemption and points and cash redemptions now being somewhat variable the points have significantly devalued from a low starting point which makes it unattractive to use for spending. If they decided to offer 2X IHG points on all purchases, I would actually consider using the card a little more frequently just to throw them a bone even though their are much better earning opportunities out there. But tell me that you want to collect an annual fee, provide me with platinum status which is pretty worthless compared to the competition and then force me to spend on the card at less than 1% earning rates just to obtain 1 free night and that is just too much to swallow. Heck, Marriott and Hyatt offer free annual night certificates with no spend requirements. Sure they have restrictions on which hotels it can be used at based on category but at least I know that I can typically obtain close to the annual fee back with the stay.

  8. I had a similar survey on Prestige about 3 months before changes were announced. Several were much worse options but it was clear that Admirals Club access was going away for good.

    Have designed several of these surveys for similar clients – there’s a way to read into them if you’re familiar with the construction, but average readers should be cautious of making assumptions.

  9. I predict that if they make too many changes they’ll see a stampede of cancellations (unless current cardholders are grandfathered).

  10. If they require $5K spend for free night I’ll drop it. Not so concerned about a Platinum spend requirement.

    Would anybody doing the survey actually say the changes were fine with them? It seems silly to ask, unless the people taking the survey are pretty dumb.

  11. I will drop it if it is 5k spending requirement for free night. I am also not concern with 20k for platinum status as I dont really reap any benefits from the status. I will simply choose not to spend the 20k on the card.

  12. They would see an absolute onslaught of cancellations if they require a spending requirement to get the free night. In theory, I don’t even understand the problem as it’s already been mentioned they limit the availability of the awards. So rather than lose the night for free they’re giving it away to a client who spends $50 on the plastic card, that’s better than zero.

    In my belief raising the annual fee to something close to Marriot is the only thing that would prevent a wave of cancellations.

  13. The two most interesting proposed changes were the 1:1 airline transfer and 4th night free on redemptions.

    While I’m no expert, my guess is they really want to see if they can get away with a higher annual fee and the spend threshold for something (status or free night or both), and maybe restricting the free night to Holiday Inns.

    I would consider keeping it for 1:1 airline transfer, especially if SPG is going away.

  14. I know I might sound like a broken record here on this, but why is hotels.com never discussed here. right now they are offering me double free nights, which means that just five nights gets me a free extra night, at ANY property and on ANY night.

    That’s a 20% return and way better than any of these cars, points, schemes and plans, and without being tied to a brand.

  15. Spending requirement for the free night would get me to cancel the card. Spending limit to get Platinum is a joke considering Platinum with IHG is virtually worthless.

  16. @Martin: Bloggers don’t get paid referral fees for hotels.com so there’s no money to be made in mentioning it. I agree that it is a good offer and the beauty is the simplicity.

  17. @Martin @two scoops,

    Agreed that part of the lack in love for hotels.com is no referral fees, but it’s also in part because you don’t get elite perks or earn towards status most of the time on those bookings. Some obviously value status more than others, but there is value there for certain.

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