Last updated on November 19th, 2020
Looking for a credit card to accompany you in your travels? It can be difficult to choose from the many available, especially if you’re not familiar with the types of travel cards out there. One of these types is the hotel credit card, and, depending on your lifestyle and preferences, it can become one of your closest friends when journeying away. Read on to learn more about hotel credit cards and how to get the most out of them.
Hotel Credit Cards at a Glance
A hotel card is a co-branded credit card between a card issuer and hotel brand. Hotel cards are like general travel cards in that they both offer rewards programs that earn customers points for purchases made. They both also attract consumers with signup bonuses and additional perks that are usually either not available to the general public or acquired at a cost. Unlike general travel cards, however, hotel cards will feature benefits that are unique to the partnered hotel brand, and rewards redemption is restricted to the hotel’s products or services. As such, these cards are mainly targeted at loyalists or individuals who wish to establish a preference towards a singular hotel chain.
Due to the number of included incentives and rewards possibilities, hotel cards typically have higher interest rates than other credit cards. It’s common to see APRs starting in the mid- to upper teens and capping at the mid- to upper twenties. These cards will also require you to have at least “good” credit in order to be approved.
Good to excellent credit score required
Also as a trade-off for the amount of bonuses offered, hotel credit cards will often charge annual fees. Depending on the card’s status, these fees can start at around $50 and shoot all the way up to $400+. In many cases, however, the annual fee is offset by the card’s perks. For example, a free stay for one night at most hotels can easily be worth the value of a $95 annual fee. In addition, some cards will waive the annual charge for the first year, giving you even more value during your initial 12 months as a cardholder. The general rule of thumb with these cards is to take advantage of every possible benefit included in order to erase the annual fee’s sting and raise the overall value.
One aspect in which you won’t have to worry about fees is when you make purchases abroad. Hotel cards are logically designed to be used around the world – since major hotel chains have locations worldwide their cards are accepted globally. Whether you’re booking a stay overseas or splurging on souvenirs, foreign transaction fees are generally not associated with hotel cards.
What to Look for in a Hotel Credit Card
As mentioned, hotel credit cards differ from general travel credit cards in that they offer more tailored benefits, with the card’s partnered hotel as the focal point. Learn more about the main features of these cards so you can make a more informed decision when browsing options.
Many hotel cards will gift you a free night award simply for being a cardholder – no spending required. This is one of the most best perks simply because you hardly have to do anything to take advantage of it..
In addition to free night stays, a hotel credit card gives you the power to enjoy a number of complimentary services, such as daily breakfast, Wi-Fi, and access to the property’s spa or lounge facilities.
Transfer to Other Programs
If your hotel is partnered with other loyalty programs, you may be able to transfer your earned rewards for flights, car rentals, or other options to consider around the world.
he main add-on you should consider when shopping around for a hotel card is the rewards program it includes, as well as its long-term value for you. Most hotel cards have an earning rate of at least 1 point per $1 spent on all purchases. This rate multiplies when shopping in specific categories like dining or booking travel, and the highest earning potential lies in making purchases with the card’s hotel brand. In some instances, you can earn as much as 12X the number of points per $1 when booking a stay directly with the hotel. If the card’s hotel brand operates a portfolio of chains, you’ll most likely be able to earn multiplied rewards when booking at those locations, too. Therefore, it’s in your best interest to book frequent stays – even if for a staycation within your hometown – so you can earn the most points possible.
Rewards Value & Redemption
The most popular option when redeeming earned rewards is free nightly stays. You can use your points to book an entire stay, or to pay for a partial number of nights. And in the same way that you can earn points at the hotel company’s family of brands, you can usually also redeem points for stays at those locations. One important thing to keep in mind regarding rewards is the potential for points to have different values depending on the location and hotel you’ll be redeeming them at. For instance, a room at a four-star hotel in Paris will most likely be worth more points than a more economical option in Denver. Keep these variables present before applying – and, more importantly, before redeeming your rewards – for a hotel credit card.
Most hotel cards hook customers with a big, juicy signup bonus. You’ll often see offers of 50,000, 70,000, or even 100,000 bonus points earned after meeting a spending threshold during the initial months from opening an account. While this enticement is huge and is equal to at least one or two free nights, it can be easy to forget about the goal that must be met to receive it. Typically, you’ll have to spend between $3,000 and $4,000 within the first three months as a cardholder to qualify for the signup bonus, so if you can’t realistically reach that number without digging yourself into a pit of debt, you’d be wise to consider other options. The best time to apply for a hotel card with a signup bonus is when you’re already preparing for a big purchase that will eat up most, if not all, of the required spending goal.
Loyalty Program Elite Tier Status Boosters
ost hotel brands will likely feature a loyalty program with several status tiers and accompanying features. While you don’t need a hotel card to become a member of a loyalty program, having one often grants you automatic enrollment and even enhances your member status. Among the amenities common to these memberships are special rates, early check-in/late check-out, room upgrades, and concierge services. You may even get bonus points in conjunction with what you would already earn with your card.
Choosing Between a Hotel Credit Card and a General Travel Credit Card
Hotel credit cards are the obvious choice if you have been or will be a particular brand’s loyal customer. Having the exclusive benefits of a hotel card plus the ability to earn rewards on just about any purchase paves the way for enjoying more inclusive and memorable experiences, regardless of whether you’re traveling for business or pleasure.
However, if you’re only a casual frequenter of hotels or prefer to look for the best deal irrespective of where you book, a general travel card will suit you better. Similarly, if you encounter a very attractive signup bonus for a hotel card but spend more time of the year booking with another resort, that card will essentially be handcuffing you to rewards that you won’t be looking forward to taking advantage of. And if you prefer more variety for redeeming your earned rewards, you’ll want to look somewhere other than a hotel card.
When considering a new credit card, the most important things to be mindful of are your lifestyle and spending preferences. Look for a card that will work for you, not the other way around. As an alternative, you can always have a hotel card for chain-specific rewards and a general travel card for more flexibility when it comes to booking travel or other travel-related expenses (Just remember not to apply for too many cards at once, as it will reflect negatively on your credit history).