Best Hotel Credit Cards
Hotel credit cards let you rack up points to cover free stays at your favorite properties. But they come with a lot of fine print, so understanding how to make the most of your hotel credit card is important. With the right knowledge, you can get thousands of dollars in value from your card.
What Is a Co-Branded Credit Card?
Every credit card has a company sponsoring it. Usually, you know those sponsors by names like Visa, MasterCard, American Express, or Discover. They can also be banks, such as Chase.
But co-branded cards couple the finance industry sponsor with a company from another industry — typically travel or retail. Stores such as Macy’s or Walmart cosponsor credit cards, for example, and even Starbucks gets in on the co-branding action.
In the travel industry, airlines and hotels both work with banks and credit companies to co-brand cards. Hotel brands with credit cards include Starwood Preferred Guests, Marriot, Ritz-Carlton, Hyatt, Hilton, and IHG.
But, what’s the point of a credit card with some other company’s name on it?
For the consumer, it’s not just about the card carrying another business name. Most of these cards come with benefits from both the bank/credit card company and the co-branded business. Retail companies may offer credit card holders special deals or discounts, especially when they pay with the co-branded card. Hotels and airlines may do the same, and the cards also usually help holders earn points toward free travel.
Benefits of a Hotel Card Versus a Travel Rewards or Airline Card
If you’re looking for a credit card that helps you save on travel, you can usually choose between three major types of cards.
- Hotel co-branded cards. These are cards that are cosponsored by hotel brands. They come with rewards structures tied to the specific hotel’s rewards program.
- Airline co-branded cards. These are cards that are cosponsored by airline brands. They come with rewards structures tied to the specific airline’s frequent flyer program.
- Travel reward cards. These are cards offered by credit card companies or banks that let you earn points you can use toward general travel expenses.
So, why would you choose a hotel card over travel rewards or airline card?
Some hotel cards have some really nice extra perks (more on that later), but the biggest reason to choose a hotel brand card is that you’re a loyalist. That means that you stay a lot with that hotel chain, so you’re more likely to get good value from the rewards.
Here are a couple of specific scenarios that might make a hotel card the right choice.
- You travel for business often, but it’s exclusively to one or two locations, and the hotel brand in question is where you tend to stay out of preference or necessity.
- You travel widely, but prefer to stay in properties owned by the same brand because you like knowing you’ll receive consistent quality and service.
- You travel one or two times a year, such as for a family vacation, and you can choose to stay in properties owned by the hotel brand.
In all these cases, a hotel credit card can help you build rewards to get free nights.
Some benefits of a hotel credit card include:
- Immediate crediting of your points. Unlike with some travel rewards cards, where you have to wait through a statement cycle and ask for a points transfer, hotel card points may immediately credit to your hotel rewards program account.
- Stack card and hotel points. If you’re staying with a certain hotel chain often, you’re probably getting rewards for every night you stay at the hotel or every dollar you spend with them. When you pay for those expenses with a hotel-branded credit card, you get MORE points for every dollar you spend. The points can stack up fast.
Choosing the Right Hotel Card
With so many hotel cards on the market, choosing the right one might seem like a daunting prospect. Here are three steps to take to ensure you get the card that best fits your needs.
- Choose a card that matches your hotel preference. Since hotel cards are linked to hotel benefits, you don’t want a card aligned with a brand that you don’t stay with. If you already travel a lot and tend to stay with the same brand, look for cards cosponsored by that hotel chain. If you don’t travel frequently already but would like a hotel card to help cover the cost of annual vacations, look up hotels where you plan to vacation and see where you’d like to stay; if you can find a hotel brand that meets your vacationing needs, that might be the right card for you.
- Do some research before you apply for the card. It’s not always quite as easy as booking a free night in any location with your rewards points. Individual hotel management may decide how many rooms — and which type — are available to book with hotel rewards. Sign up for the hotel rewards program and check up on redemption capability. Just because a brand has properties in a certain city doesn’t mean you’ll be able to easily book with points there. Read the hotel rewards program fine print to learn about any blackout dates or limitations; that will help you know if it’s worth getting a credit card to build up points with that program.
- Weigh benefits against cost. Finally, consider the overall cost of the card. Is there an annual fee, and do you plan on spending enough (and redeeming enough points) to get more than that fee in value? What’s the APR on the card? Rewards cards sometimes have higher APRs because of the value associated with the rewards, so if you plan on carrying balances over multiple statements, you’ll want a hotel card with the lowest possible APR.
Understanding Elite Status
Elite status is a special status assigned to hotel loyalty or rewards program members who have accumulated a certain number of points or stays within each year. Most chains have tiered elite statuses, such as Silver, Gold and Platinum. Each bump in tier equates to more perks for the member.
To understand how Elite Status works, consider the Starwood Preferred Guests program. If you complete nine paid nights with the hotel’s participating properties, you earn Gold status. Platinum status requires 18 paid nights, and your status is usually updated annually. That means you have to have those number of paid nights each year. You might also be able to gain status with various hotel programs by racking up a certain number of rewards points.
The perks of elite status are different for each program, but they include benefits such as:
- Complimentary room upgrades
- Access to special amenities or programs
- Free nights
- A higher value for points (meaning rewards points get you more when you redeem them)
- Priority booking
Some luxury hotel credit cards include automatic entry into the elite status of the rewards program, so that’s something to consider when you’re choosing between cards. An automatic bump to Gold or higher status can bring you a lot of extra value.
Maxing Out First-Year Values With the Sign-Up Bonus
One of the major benefits of a good hotel credit card is the sign-up bonus, which lets you really rack up rewards in your first year of holding the card.
Here’s how the sign-up bonus usually works.
- You have to spend a certain amount in the first few months that you have the card — typically between $500 and $5,000.
- Once you hit the spending requirement, you’re awarded a large lump sum of bonus points — often between 25,000 and 100,000.
- You can use those points to redeem free nights and other perks through the applicable hotel rewards points program.
Thousands of dollars in a few months? Sounds like a lot. But it isn’t.
Even if the sign-up bonus requires spending a total of $5,000 in three months, you can get there fairly easily because almost any purchase counts. You can’t count cash-like transactions like withdrawals or transfers most of the time, but you can count purchases you make at the grocery store, online or at the pump. Plus, with a lot of cards, you can also count bill payments you make with your credit card.
Spending $5,000 in three months is about $416.67 a week. Simply use your card to pay for the weekly grocery run, dining out and gas for the car, and you’re probably getting close. Pay your cell phone, electric and cable bill monthly with the card, and we bet you’re pretty much there.
What Are Sign-Up Bonuses Worth?
Every sign-up bonus is worth a different amount, but on average hotel rewards points are worth between 0.6 and 1.7 cents per point. Here’s a quick look at what some common sign-up bonuses might be worth:
- 25,000 points could be worth $150 to $425
- 50,000 points could be worth $300 to $850
- 75,000 points could be worth $450 to $1,275
- 100,000 points could be worth $600 to $1,700
Putting that into practical terms, you’re looking at about one to 11 free nights in standard rooms per year or a couple of free nights in upgraded rooms.
Keep Earning Rewards With Your Hotel Credit Card
Most hotel rewards cards let you earn points on every dollar you spend: usually a point for each dollar. However, some cards reward you, even more, when you spend directly with the hotel brand — in some cases as much as five points per dollar.
That means if you spend $3,000 with a hotel within the year, you could earn 15,000 points — potentially enough to cover a free night or more, depending on your program.
Put your hotel card to work regularly, and you could rack up enough points in the first year to cover a luxury vacation stay. Plus, you get to keep earning points in future years to cover nights in hotels.
While redeeming points for hotel stays is usually the best way to maximize your rewards value, some hotel rewards programs let you:
- Redeem points for gift cards or merchandise
- Transfer points to other programs, including airline miles programs
- Donate or gift your points for use by others
- Couple points and cash to reduce the overall cash cost of hotel bookings
Other Perks of Hotel Credit Cards
The exact benefits of each card are varied, but almost all hotel rewards cards come with some perks on top of the ability to earn rewards points. You’ll need to read the fine print of the offer to see what benefits your potential card comes with, but common offerings include:
- A free hotel night each year
- Access to special offers from the hotel, including the option to purchase tickets to special events
- Free or discounted upgrades
- Purchase protection, including extended warranties on purchases or purchase insurance
- Travel protection, including things such as baggage loss insurance or car rental insurance
- Concierge services
- Free access to your credit score
- Online or text management of your account
What the Banks Don’t Tell You About Hotel Credit Cards
When it comes to maximizing your value with any type of credit card, understanding the fine print is critical. Here are some things that banks don’t always make obvious about hotel credit cards.
- You can keep the sign-up bonus, even if you close the card. If you get the sign-up bonus to help cover the cost of a family vacation and then decide you’re not going to get enough value from the card to cover the annual fee in future years, you can cancel the card. With a hotel card, your points are linked to your hotel rewards program membership, not your card account.
- The best rewards cards typically require great credit scores. If you have a small blip on your credit history, it may be worth it to wait until you can get that fixed before you apply for a travel rewards card of any type.
- Paying off the balance every month is one of the best ways to protect your rewards value because you don’t end up paying a lot in interest. Use your card to pay for things you would already be buying and pay down the total every month.
- Your card may come with foreign transaction fees. That means you could pay between 3 and 5 percent extra anytime you swipe your card outside of the United States — including in Mexico or Canada.
Overall, hotel rewards cards can be a great tool for those looking to fund everyday purchases while saving up for a vacation. They’re also a great option if you travel regularly for business. Choose a card co-branded by a hotel brand that has properties you enjoy staying at for the best results.
