Credit cards affiliated with hotel loyalty programs will always come in second behind airline cards, and therefore, like a certain car rental company, they have to try harder to attract customers. But the benefits they offer can help you to supplement your mileage earnings, or earn free stays to complement your award ticket.
Just how hard do these credit cards try to lure you in? Consider the following hotel card features, which stand in marked contrast to those offered by airlines:
- The great majority of hotel cards are offered with no annual fee.
- Where there is an annual fee, it is waived for the first year.
- In several cases, cardholders receive automatic elite status in the hotel’s rewards program.
The following chart summarizes the credit card offerings from the largest U.S. hotel programs.
|Hilton HHonors 
|Hilton HHonors Platinum Credit Card
|Prime + 9.99%, currently 14.24%
|Hilton HHonors Visa Signature Card
|Prime + 9.99%, currently 14.24%
|Hilton HHonors Visa Gold Card
|Prime + 11.99%, currently 16.24%
|Marriott Rewards 
|Marriott Rewards Visa Signature
|Prime + 9.9%, currently 14.15%
|Priority Club Rewards 
|Priority Club Rewards Platinum Visa Card
|Prime + 6.99%, currently 11.24%
|Radisson Gold Points Rewards 
|Radisson Gold Points Rewards Visa
|Starwood Preferred Guest 
|Starwood Preferred Guest Credit Card
|Prime + 9.99%, currently 14.24%
* Adjustable rates based on Prime Rate as of May 2003
The credit cards listed above are associated with the following families of hotels:
 Hilton HHonors: Hilton, Conrad, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Homewood Suites, Scandic
 Marriott Rewards: Marriott, Renaissance, Courtyard by Marriott, Fairfield Inn, Marriott Conference Centers, Residence Inn, Marriott Vacation Club International, TownePlace Suites, SpringHill Suites
 Priority Club Rewards: Crowne Plaza, Holiday Inn, Holiday Inn Express, Express by Holiday Inn, Holiday Inn Select, Holiday Inn SunSpree Resorts, Holiday Inn Resort, Holiday Inn Family Suites, Holiday Inn Garden Court, InterContinental, Staybridge Suites
 Radisson Gold Points Rewards: Country Inns & Suites By Carlson, Park Inn, Park Plaza, Radisson
 Starwood Preferred Guest: Westin, Sheraton, Four Points by Sheraton, St. Regis, Luxury Collection, W Hotels
In addition, these hotel rewards programs do not currently offer an associated credit card:
- Best Western Gold Crown Club International: Best Western
- Choice Guest Privileges: Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn
- Hyatt Gold Passport: Hyatt, Hawthorn Suites
- Ramada Inn Club Ramada: Ramada Inn
As stated above, there are no annual fees for most hotel cards. In the case of both the Marriott and Starwood cards, the modest $30 fee is waived for the first year.
You might expect that the card issuers would offset the low up-front fees by charging higher annual percentage rates (APRs). In fact, the hotel-card APRs are comparable to those charged for airline cards.
So from a total cost-of-ownership standpoint, hotel credit cards enjoy a clear competitive advantage over their airline-affiliated counterparts.
While there are occasional promotions associated with the hotel cards, they are not nearly as frequent or as generous as those linked to the airline cards.
There is one special offer that deserves mention. When converting Starwood points into airline miles, members earn a 25-percent bonus for every 20,000 points exchanged. So 20,000 Starpoints net 25,000 miles in many participating airline programs. That gives the Starwood card double appeal: It is both a generator of points toward free hotel stays in the Starwood program; and, since it effectively awards 1.25 airline miles per $1 charged, it’s a worthy competitor to an airline card.
Note, however, that not all hotel points have equal value: 10,000 Hilton HHonors points is worth only 1,500 miles, and 70,000 Marriott Rewards points can be exchanged for a 25,000-mile award on most major airlines.
Debit cards and business cards
Unlike the airline cards, there are currently no debit cards issued in conjunction with the hotels’ programs. And only Priority Club Rewards offers its members an affiliated credit card specifically geared for small business owners.
A good deal doesn’t always mean good value
Savvy consumers know that excessive generosity is often symptomatic of an inferiority complex. Which begs the question: What’s wrong with hotel cards?
The answer has less to do with the cards themselves than with the promotional currency. There’s nothing wrong with hotel points. They simply don’t play a large role in the overall travel-rewards game, which is dominated by frequent-flyer miles. Because the vast majority of frequent-traveler program participants are chasing after the same goal—a free airline ticket in exchange for their travel and spending—hotel points can never be as valuable as miles.
You might think that hotel awards would be more widespread: Once you’ve earned an award ticket to your preferred destination, you usually need somewhere to stay. But for leisure trips, which comprise the bulk of award travel, a hotel stay is actually much less of a pressing issue, either because a low-priced motel is perfectly adequate, or because accommodations are being provided for free by friends or family who live in the area.
And for the subset of travelers who are interested in earning free nights, accumulating points for credit-card purchases plays a subsidiary role to earning points from stays.
So because consumers are less interested in both earning hotel points from credit cards and redeeming those points for free stays, hoteliers and the credit-card issuers that partner with them recognize that they have to work extra hard just to get their cards into consumers’ wallets. For most travelers, airline cards and cards that offer multi-program credit (such as American Express and Diners Club), are preferable.
Choosing a card means choosing a program
If you do want to use a hotel-affiliated card, either to supplement your mileage earnings or to earn free stays, you need to pick the card that’s right for you. As is the case with choosing an airline credit card, the best hotel card for you is the one affiliated with the program that best accommodates your travel needs. The choice of hotel program should be based on the fit between your travel patterns—principally where you go, which airlines you fly, and how much you spend on hotel accommodations—and the ability of a hotel chain to service those needs.
Here is some general advice on choosing and using a hotel program:
- If you consistently stay at a particular brand of hotel—because of price, location, service, etc.—join the program that encompasses that brand.
- Assuming the program meets your expectations, sign up for the co-branded credit card.
- Earn just enough hotel points to qualify for any free stays you anticipate needing for the next trip or two. Any other earnings, from either travel or credit-card use, should be diverted to your primary airline program.
- If it’s not immediately apparent which hotel network will best suit your needs, first try the larger chains, such as the ones that offer an associated credit card. Simply by virtue of the numbers of hotels in their families, they are more likely to offer suitable accommodations in most locations, for use both in revenue and award stays.
- If you’re currently spreading your hotel stays among multiple hotel programs, stop and take stock. At least one of the major chains should be able to handle 80 percent of your business. By consolidating your future business with one chain, you can focus your points earning in a single program, resulting in more awards over the long term.
Notice that credit-card fees and earning rates, elite status, bonus miles, and the like did not factor into this advice. In some instances, those considerations can be tie-breakers. But for the most part, in the case of hotel credit cards, they are distractions from the primary focus: choosing and using the right program.
In the next installment of this series, we’ll look at multi-program cards, such as the Diners Club and American Express cards, which reward cardholders with points that are convertible into a wide range of airline and hotel currency. That’s a lot of flexibility on the upside. Is there a downside?
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