Hotel cobranded credit cards are not typically top of mind for most people when it comes to "best credit cards around." However, I'd argue that there's a lot of hidden value to be gained through hotel cards. Many of them are underrated, but should be put on your radar.
This article will outline what makes hotel cobranded credit cards differ from that of fixed value/cashback & transferable point cards, their pros/cons, and examples of some good ones.
What Exactly Are Hotel Cards?
Hotel credit cards are credit cards cobranded with a hotel chain & issued by a bank. For example, Chase and IHG "cobrand" the IHG One Rewards Premier Credit Card; AMEX and Hilton "cobrand" the Hilton Honors American Express Card.
Spending on hotel cards will earn that specific's brands points. So, unlike spending on a cashback card where you earn cold, hard cashback, you will earn hotel points you can use for future hotel stays. This can be both good & bad, depending on how many points you earn and how you value them—hotel points are typically worth less than transferable points, so there's a significant opportunity cost associated with them.
Hotel cards also typically have various perks like instant elite status, free hotel nights per year, or automatic elite qualifying nights. These differ from airline cards, which are focused on improving the flight experience via perks like free checked bags, early boarding, etc.
What Are The Major Hotel Chains & Their Cobranded US Cards?
There's about 4 major hotel chains with significant US credit card portfolios: Marriott, Hilton, Hyatt, and IHG. Each chain has its own ups and downs, which we will cover in separate articles.
Marriott International
Marriott is the biggest hotel chain in the world, boasting a portfolio of ~8,700 properties across 30 brands. Their footprint is incredibly large, which is why you'll almost always see a Marriott option, regardless of what city you're in.
Marriott partners with both American Express and Chase for its credit cards. There are many Marriott credit cards that provide perks & benefits like:
- Elite qualifying night boosters
- Free nights
- Instant low & mid tier elite status
- Extra earnings on Marriott purchases
- Property credits
- Dining credits
- Priority Pass
Hilton Worldwide
Hilton is the second largest hotel chain in the world, with 7,500+ properties worldwide and a portfolio of 22 brands. Similar to Marriott, there are so many Hilton properties out there that you'll likely just stumble upon one on your day to day.
Hilton only partners with American Express for its cobranded hotel cards, which offer benefits like:
- Free nights
- Instant low, mid, and high tier status
- Extra earnings on Hilton purchases
- Property credits
- Dining credits
- Priority Pass
Hyatt
Hyatt is not as well known as the other two programs, but I believe has the best loyalty program out of them all. As of September 30, 2023, Hyatt has 1,300+ hotels in 76 countries. While their footprint is smaller, their global recognition & benefits are generally stronger than most other hotel programs.
They partner solely with Chase to offer two cobranded credit cards:
- Free nights
- Instant low tier status
- Extra earnings on Hyatt purchases
- Property credits
- Elite qualifying nights
As you can probably tell, there's no easy way to just get mid/high tier status with Hyatt just by having their card. This prevents there from being an overwhelmingly high number of elite members—when everyone's special, no one's special.
Intercontinental Hotels Group (IHG)
While Holiday Inns are likely the first thing you think of when you think of IHG Properties, the brand actually has 6,000+ hotels across 100 countries worldwide. They have a mixed portfolio of budget brands like Holiday Inn and higher end brands like Intercontinental and Kimpton.
IHG partners exclusively with Chase to issue their cobranded cards that give benefits like:
- Free nights
- Instant low & mid tier status
- Extra earnings on IHG purchases
- United Airlines credit
- Redeem 3 nights, get 4th night free
Unfortunately, IHG's elite status is pretty weak, but they are making moves to improve it. Internationally outside of the US, those with max tier IHG status oftentimes get pretty good benefits/service.
Pros/Cons Of Hotel Cards
So hotel cards seem to offer a lot. What's their downside?
BRAND
Pros
Cons
- Reward Earning Potential For Loyalty: High earning rates at affiliated hotels mean you can rack up points quickly for future stays
- Hotel Benefits: Earn free hotel nights, automatic elite status, etc.
- Limited Flexibility: Rewards are usually tied to one hotel brand, limiting where you can stay to maximize benefits
- Potential for Devaluation: Hotel points can be devalued over time, meaning it could take more points for a free stay in the future
- Higher Opportunity Cost: While you might earn more hotel points per dollar, hotel points are generally worth less than transferable points, so it may actually be less rewarding to use your card for purchases vs a transferable point card
Wait, But I Earn So Much On Groceries With My Hotel Card! Why Is That Bad?
Let's analyze why hotel cards typically have a pretty high opportunity cost associated with them. Take the Hilton Honors American Express Surpass® Card for instance, which earns a "whopping" 6x at U.S. restaurants, gas stations, and supermarkets. While that may seem like a lot, it's important to realize that Hilton points are not worth that much.
Many sources dub Hilton points as worth just around 0.5 cents per point on average. Consequently, if I was comparing between earning on an American Express® Gold Card on groceries (which earns 4x AMEX points/$) vs using a Hilton Surpass, it makes very little sense to choose to earn on the latter given how weak Hilton points are.
Generally speaking, I actually never put any spend on my hotel cards except if its for a hotel-specific stay. When spending at a specific brand, hotel cards are typically unmatched. However, when it comes to spending elsewhere, I'm a little hesitant to encourage spend.
Examples Of Good Hotel Cobranded Cards
Like with all cards, there are good and bad ones. Hotel cobranded cards have some incredibly high value ones and ones that aren't worth looking much into.
This card is one of the strongest keeper cards around. With just a $99 annual fee, cardholders earn up to 25x points/$ at IHG hotels, a free reward night after each account anniversary year at eligible IHG hotels worldwide (up to 40k pts), TSA Pre/Global Entry credit, and Platinum Elite status.
This card offers a significant sign-up bonus of 5 Free Night Awards after $5,000 spend in the first 3 months. Cardholders benefit from a yearly Free Night Award, 15 Elite Night Credits each year, automatic Silver Elite status, and earn 6x points at Marriott hotels. Notably, after 12 months, there's an option to upgrade to the Ritz-Carlton Card, which includes additional premium benefits.
The Hyatt card is almost a necessity for anyone chasing Hyatt Globalist status or for those who plan on staying at Hyatts at least once a year. Not only do you earn 4x points on Hyatt stays, you also get a Free Night at any Category 1–4 Hyatt hotel. Furthermore, after spending $15,000 in a calendar year, you also get another Free Night alongside 6 EQN (2 EQN for every $5,000 spent on the card).
Conclusion
Hotel cards are generally underrated and can provide significant value to those who put some time and effort into understanding them. With benefits like free nights, elite status, and more, it can be hard to ignore hotel cards even if you aren't specifically loyal to any one chain. The free night benefit on a lot of these cards can easily offset itself each year, while providing significant ancillary value.
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