Is it foolish to use hotel cards for everyday spend?

Foolish hotel cards for everyday spend

Update: This post includes offers that were valid at the time of publication, but have since expired. Please click here to see the best offers currently available.

In response to my post yesterday about the 150K Marriott offer (see: The 150,000 point offer everyone should avoid) a reader commented “To be fair, people who use hotel cards for their everyday spend are usually fools anyway.”

I began composing a reply, but soon realized that my response might be interesting to others so I’m taking the unusual approach of replying via a new post…

First, let’s get the obvious out of the way: Using a particular credit card may indeed be foolish, but that does not make the person a fool.  I know brilliant people who use debit cards for all spend.  Yes it makes me cringe when I see it happen but it doesn’t lessen my respect for them.  I’ve chosen to care about rewards earned from spend, but many others do not.  That does not make them fools.

Second, the post in question was about a signup offer not about cards to use for everyday spend.  Many who know that the Marriott card is a poor choice for everyday spend may still have been tempted to get that 150K signup offer in order to earn 5X everywhere for a while.  Hopefully my post convinced them not to!

Third, and perhaps most importantly, there are sensible reasons to use hotel cards for everyday spend! To understand this, let’s first define “everyday spend”.  I usually use it to mean spend that does not get a category bonus.  Others, though, may use it to mean spend at “everyday” types of places: grocery stores, gas stations, restaurants, etc.  Whether or not it makes sense to use a hotel card for everyday spend in some cases depends upon how you define everyday spend.  For example, the Hilton Surpass card offers 6X points at U.S. restaurants, grocery, and gas stations; 12X at Hilton properties; and 3X everywhere else.  One could argue that it is sensible to use the Hilton card at “everyday” locations where it earns 6X, but not anywhere that it earns 3X. (this offer has expired)

Let’s use my definition of “everyday spend” for the rest of this post.  That is, is it sensible to use hotel cards for spend even when the card does not earn any category bonuses? Since no-fee 2% cash back cards are readily available (Citi Double Cash, for example), let’s define “sensible” as the possibility of getting 2% or more value from your spend.

Reasonable for everyday spend

Amex Starwood Preferred Guest (SPG): Definitely reasonable!

SPG cards earn 1 point per dollar for everyday spend.  My current Reasonable Redemption Value for SPG points is 2.08 cents per point.  That means that the SPG cards are reasonable to use for everyday spend.

Club Carlson Premier Rewards Visa Signature: Reasonable for some

The Club Carlson Premier Rewards card and its twin Business Rewards card earn 10X points at Club Carlson properties and 5X everywhere else.  With the current Reasonable Redemption Value for Club Carlson points at .36 cents per point, this card earns about 1.8 cents per point value towards hotel stays.  Since it is often possible to get much more value than the Reasonable Redemption Value, I think that everyday spend with this card makes sense for those who frequently stay in low-category Club Carlson hotels.

Additionally, this card offers a free night at any US property after $10K annual spend.  So, the first $10K per year makes sense for pretty much anyone who can put that free night to good use.

Reasonable, up to a point…

The two hotel cards listed above are the only hotel cards that I can think of that have strong enough point earnings for everyday spend to justify using instead of a 2% cash back card.  That said, a number of cards offer free nights or bonus points with a set amount of spend.  In each of these cases, it is reasonable to put everyday spend on these cards but only up to the amount needed for the spend bonus:

  • Chase Fairmont: Free night after $12K annual spend.  Card is no longer available to new applicants.
  • Citi Hilton Honors Reserve: Free weekend night after $10K annual spend.
  • First Bankcard Best Western: 20K bonus points when you spend $5K per year.
  • US Bank Club Carlson Premier Rewards Visa: Free night at any US property after $10K annual spend.
  • US Bank Club Carlson Business Rewards Visa: Free night at any US property after $10K annual spend.

Reasonable for chasing elite status (for some)

If you highly value hotel elite status, each of these cards can help you get status through spend:

  • Amex Hilton Honors: Gold status with $20K calendar year spend. (This offer has expired)
  • Amex Hilton Honors Surpass: Diamond elite status with $40K calendar year spend. (This offer has expired)
  • Amex SPG: Gold status with $30K annual spend.
  • Chase Hyatt: Mid-tier Explorist status with $50K calendar year spend.
  • Chase IHG: Points earned from credit card spend count towards status. IHG requires 75,000 points per year to get and keep top tier Spire status.
  • Chase Marriott Rewards Premier: 1 night credit towards elite status for every $3K in purchases.
  • Chase Marriott Rewards Premier Business: 1 night credit towards elite status for every $3K in purchases.
  • Chase Ritz Carlton Rewards Visa: $10K spend per account year to keep Gold elite status; $75K spend per account year for Platinum elite status.
  • Citi Hilton Honors Reserve: Diamond elite status with $40K calendar year spend.

Unfortunately, with the exception of the SPG card, the value of the points earned on the other cards for everyday spend do not add up to 2%.  This means that there’s a definite opportunity cost to putting spend on these cards vs. other more rewarding cards.  I’d argue that hotel elite status is rarely worth the trade-off.

Wrap Up

This has to be my longest reply to a comment ever!  In summary, there are hotel cards that make sense to use for everyday spend.  But, with the exception of those who highly value Marriott elite status, the Marriott credit card is not one of them.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

More articles by Greg The Frequent Miler »

Pingbacks

  1. […] What card do you use for everyday spend?:  Is there a right or wrong card to use for everyday spend?  The answer is that it depends on your goals.  Is your goal to rack up a bunch of cash back?  If so, a co-branded airline card will not help you reach your goals.  Right and wrong cards to use will vary from people to people and their own goals.  You can learn other people’s strategies, but at the end of the day, the strategy YOU choose should help YOU reach YOUR goals. […]

Comments

  1. I agree with you on this but….Even with cards like the Club Carlson the points earned still aren’t as valuable as most airline and flexible point cards. For example say I put $10k on that card and earn the free night. It’s still a stretch to find the right USA property to get the full value over say $125 for $10k I spend. Unless I’m flush with airline miles I’d rather have UR points.

    • I totally agree. I wouldn’t personally use the Club Carlson card for everyday spend (at least not past the first $10K) but as I said in the post it may make sense for those who “frequently stay in low-category Club Carlson hotels.”

    • However, you would also receive 50,000 points, worth $180 pretty much anywhere, so your total value from your $10,000 spend, even with conservative assumptions, is $305. Using equally conservative assumptions, that easily exceeds the value of 10,000 UR points.

    • Scratch my prior comment. I misread yours. As Farnorthtrader said, the $10K spend would generate nearly enough points for a second night. However, if you think you wouldn’t actually use the free anywhere in the US night, then of course it wouldn’t make sense for you. That’s why I haven’t done the $10K spend myself (but I may consider it in the future).

  2. Given the ubiquity of 2% cash back cards, when you use any other card for spend, you are buying a point or a mile for 2 cents.

    The amex platinum with 50% refund is probably the only card that passes that high bar.

      • Why? Because Freedom Unlimited to Reserve UR is worth more than SPG? What about standard Freedom (rotating cats)? I have the Reserve and so does my spouse. We are planning to downgrade one of us, and I’m trying to decide whether to downgrade to the Unlimited or to standard Freedom (for rotating cats). We both also have SPG. For everyday spend, I’m thinking Discover It or Discover It Miles might be a better option than any of the Chase options above (love the cash!). Lots to think about. Head feels like its gonna explode!!

        • The Freedom Unlimited earns 1.5% back, versus the standard Freedom’s 1% (of course, using the standard Freedom is a must on the 5% bonus categories until maxxed out). Moving those UR points to a Reserve cards nets you, at worst, 1.5 cents per point value when booking travel. That brings you to, on everyday non-bonused spend, 2.25% “cash” back.

          Now, people can find SPG redemptions way above 2.25%, of course. It’s more a question of how you prefer to redeem the points and for what. Generally speaking, using average values, 2.25% back is better than 1 SPG point. But again, depends on the usage of said points.

      • In regards to my prior post of: Chase Reserve vs. Starwood Preferred, which is better for everyday spend if I’ve already obtain the bonuses (Chase Reserve 100k & Starwood 25k).

        I’m trying build up more points for airline flight for two, to Asia(Chicago > Taiwan/HongKong/Tokyo), hopefully in business class. Not sure if it’s best to get more UR points transfer > UAL, or Starwood points > Marriott > UAL.

        With three recent Chase Reserve cards we’ve accumulated over 330k UR points, 130k AA miles & 40k Starwood points. We’re seeking to travel to Asia 6/23 – 7/7 and it appears Reward Points to fly with United or other airlines cost tons of points, especially in business class.

        Thanks for any tips.

        • Ooh, that’s a great question!

          Freedom Unlimited essentially earns 1.5 United miles per dollar.

          SPG earns 1.47 United miles per dollar IF (and only if) you trade exactly 90K SPG for a Marriott travel package to get 132K United miles.

          So, if you plan to do that AND if you even modestly value the Marriott 7 night certificate, then SPG comes out ahead. Or, if you plan to return the 7 night cert for 45K Marriott points (15K SPG), then SPG comes out decidedly ahead at 1.76 miles per dollar.

        • I should have added: You can use a tool like http://www.flyermiler.com to find out how many miles your trip would cost with different programs if you can find saver award availability. flyermiler shows one-way award costs.

          To Tokyo it shows that Alaska miles are cheapest (as low as 50K one-way depending on which partner you fly), AA is next (60K one way), then Korean Air (62.5K one way biz or 80K first), etc.

          As far as award availability goes, my bet is you’ll have the best luck with Korean Air. They’re a transfer partner with Chase and SPG. You already have enough Chase points for 2 to fly First class (let alone business).

          I’d recommend: try to find Korean awards, call to put the award on hold, then transfer your points in so that the booking can be completed.

  3. I use the Hilton card at supermarkets to buy home depot gift cards 6x. Then get on an airline portal, American or Southwest to buy what I need with the gift cards. 2000 purchase nets me 12,000 hilton points and at least 4k airline miles, seems like a good use to me.

    • And what is your value of 12,000 Hilton points compared to 3,000 UR points (i.e., if you were making purchases with Freedom Unlimited)? For example, most value Hilton points at about $0.004 per point meaning 12k points would equal $48 at a Hilton property whereas UR points (if you have a premium UR card as well) are worth closer to $.02 per point so your 3k in UR points would be closer to $60 in travel and have a wider variety of redemption options. Just something to consider.

      • Steve, you forgot to add in my 4K points on American or southwest. Plus we always get nice upgrades at Hiltons, besides I have or 2 million miles not leaving anytime soon.

        Thanks for the info.

        • you could still receive those AA/SW points if using the Freedom Unlimited, though. But sounds like you value 12,000 Hilton pts above 3,000 UR, so totally makes sense using the Hilton card.

      • I am currently looking for the best way to accumulate Choice and Hilton points. UR points I love, but they don’t transfer to Hilton or Choice. My plans for summer travel include these hotels. Short of actually having applying for these credit cards, I am putting spend on my Amex Gold that luckily transfers to both. Sometimes you do what you must to get the points you need.

        • UR can transfer to virgin Atlantic and then to Hilton. You would get 1.5 Hilton for every UR. Pretty bad use of UR points, but you can get Hilton points for UR points.

  4. As with everything, it depends on what you do with the points. I have need to stay at a Four Points property on 33 Fridays over the next 20 months…at 2,000 points a night I am getting between 7-10c value per point. Makes SPG Amex the best for a lot my everyday spend.

  5. I use Ritz and Starwood for everyday spend although I also have Hyatt and Marriott but we get the free room but don’t put much on it. My husband has 1 cc Southwest because his spending would get crazy and easier to keep track of!

  6. @SteveH @Robert

    I have long found using a “fixed value” to value the points from different programs is a Fool’s game. Sure, it give an easy to use “reference” to those who without such, would have no clue on how to use their points smartly, but it also overly generalized of what the points are best used for. I believe this concept of attributing a fixed value started with Lucky and then every blogger worth his salt started to follow.

    The real value of point and mile strictly tie to HOW you use it. How you use it strictly tie to your own travel needs.

    We have found the Hilton point extremely valuable booking hotels in the Central and Eastern Europe.
    A Hampton Inn at the Gdansk airport in Poland, within 200 meters walking from the arrival hall, goes for $100 or more flexible rate in the shoulder season – yet it is a 10K property. In this case, the Hilton point is at 0.10 per point, more than twice than what one normally “values” it.

    Then at the Krakow airport where we would arrive at 10:30pm, there is a 10K Hilton Garden Inn within 5 min walk and again the cash rate is over $100.

    I am very pleasantly surprised by such easy and cheap solution for our very late arrival to a Polish airport. 😉

    In ordinary cases the redemption value is usually around 0.005 per Hilton point but one can often get it to 0.007 depending on how one’s travel.

    Same scenario can be said for SPG, Marriott, and even IHG points. It all depends on where you use them and if you travel all over the world, it is always better to have good balances in all of them – because of the local presences outside the usual big cities, can be very skewed.,

  7. I can see the point of not using hotel cards….I only use them for signup bonuses and to keep the account from expiring…also the free night annually from Marriott, ihg, and Hilton and elite status from cards make them worthwhile. Not so much for “everyday spend” which I would consider anything that is not a major purchase or in a category such as grocery (that earns 6x points with Hilton surpass) with a high multiplier. It is a pain to carry 15 cards and figure which is best for gas, lunch, a movie, ect, ect.
    After ignoring the sensible thing for so long, I agree that it is foolish and would be much easier to use ink to buy debit cards at staples or office depot (they often have rebates that make them fee free) and then use those cards for everyday spending….instead of cashing them out with a MO.

  8. You are correct in stating that it depends on what your end game is. Many people don’t really understand the true value of the UR points. I know I didn’t until I started really studying what you can do with them. An example would be transferring to Marriott or booking through the Chase portal. I am going to Costa Rica next January and I am staying 3 nights at the El Mangroove Autograph hotel as part of the trip. To get a Marriott redemption for this category 7 property would cost me 105,000 points for the cheapest room with no balcony. However, instead of transferring my UR points to Marriott, I booked a much larger suite with a balcony for 62,000 UR points and hope to also get MR points back for the stay.
    I wiped out my MR points getting a 5 night package in order to stay at the San Jose Marriott and have 120,000 points transferred to SW to get the companion pass. I booked airfare to Cancun for June for 2 people for 24,000 SW points total and put the tax on the Reserve card, which promptly refunded the tax as part of my $300 annual travel credit. I’ll be booking my Costa Rica trip with some of the SW points and will still have points to burn. The flexibility of these points is amazing. I had to transfer 21,000 UR points into Marriott in order to have enough points for the 5 night travel package. (I’m a Vacation Club owner).
    I also love the SPG card for every day spend because of the flexibility. I can transfer to airlines to help get an award or transfer to Marriott to get 3 X points where I would only get 1 point with that card.
    I also transferred UR points into United last year, enabling me to book the first class suites on Asiana returning from Sydney to Atlanta through Seoul, which was a really sweet ride ride on an A380-800.

    In other words, if travel is your end game and you are tied to Marriott, these 2 cards are the best thing for me. I’m Lifetime Gold with Marriott and will most likely be Lifetime Platinum in about 5 years, so I’m chasing the travel dream while I can.

    • I also depleted my MR account and I’m doing the same thing with a Costa Rica trip to the San Jose Marriott and SW points. I also was able to book so far 2 other fights on points. This is going to be a big money saver and opportunity to travel for us!

  9. Last year I put $10K on my Club Carlson personal and biz cards to earn the US free night. This year I decided not to put any spend on the cards, because I’m not sure how much longer the Club Carlson program will be around in its current form, and because I’m seeing some of the best properties (Philadelphia) leave the Club Carlson program.

    I still value Starpoints highly, but I’m finding it increasingly difficult to get out-sized value from point redemptions, because Starwood has moved so many hotels to higher categories over the last few years. (Guess I don’t travel to the same city as Robert. 🙂 Also, in some cases, I get better value from Citi Prestige “4th night free” than I do from SPG point redemptions.

  10. Would I use any other hotel card than my SPG card after obtaining my bonus? No. But I do use my SPG card. The value I have obtained from using SPG points is consistently greater than two cents per dollar. Therefore, I am not losing two cents when I use my SPG card. Given that I prefer to stay at SPG properties, I am gaining greater than the benefit I could obtain from a 2% cashback card.

Leave a Reply

Your email address will not be published. Required fields are marked *