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.

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