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How Do Hotel Credit Cards Work?

Hotel credit cards allow you to earn points when you spend money on eligible purchases. You can then redeem those points for free nights
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

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Table Of Content

What Is A Hotel Credit Card?

Hotel credit cards allow you to earn hotel extra points when you spend money on flights, car rentals, restaurants, hotels, and some other eligible purchases. Hotel cards are usually co-branded credit cards with banks and credit unions.

Once you accumulate enough points, you can then redeem them for a number of rewards at the hotel chain, represented by that co-branded credit card. In most cases, you can redeem those points for the following rewards:

  • Free hotel nights
  • Free hotel room upgrades
  • Free lunches at the hotel restaurant

Here it is also worth noting that some credit cards also allow you to redeem your points for airline and train tickets.

How Do You Earn Hotel Credit Card Points?

With hotel credit cards you earn several times more points when you spend money on travel-related categories, such as flight tickets, hotels, and restaurants. Some hotel credit cards also allow you to earn some points on other purchases as well.

Usually, hotel credit cards also come with the welcome bonus, which offers a specific amount of points as a bonus if you spend some pre-determined amount of money on purchases within a specific period.

So in order to maximize potential rewards, it might be a good idea to use your hotel credit card for all travel-related expenses, such as airline tickets, car rentals, and restaurants.

Hotel Credit Cards Pros & Cons

Whether or not hotel credit cards are worth it for you depends on your personal financial circumstances, but there are some upsides and disadvantages to consider.

Here are some of the benefits of using hotel credit cards:

Pros
Cons
Free Nights
Annual Fees
Rewards & Perks
Limited Redemption Option
Welcome Bonuses

Many hotel credit cards offer one or more free nights per year to customers. 

However, considering that some of those hotels can be quite expensive, this can help customers to save a significant amount of money.

Hotel credit cards is to allow clients to accumulate points that they can redeem for hotels and some other travel-related expenses.

This can also give an opportunity to customers to save some money.

Besides an opportunity to earn more points on travel-related spending, many hotel credit cards allow clients to take advantage of introductory bonuses, as explained above.

One of the major downsides of hotel credit cards is that many of them have annual fees, in some cases, those expenses can be equal to hundreds of dollars.

For most hotel credit cards you can redeem points for hotel nights, airline tickets, or car rentals.

So this might not be the best choice if you want to earn non-travel-related rewards.

How To Choose Hotel Credit Card?

If you think that a hotel credit card is something that can be useful for you, then there are several things to consider when deciding which particular card to choose:

  • Deciding on a hotel – Since you can redeem your accumulated points for hotel nights, it is important to decide at which hotel you will spend your points. Therefore, it is better to decide at which hotel you will be staying most of the time and then look for a co-branded credit card for that hotel. 
  • Bonuses and statement credits – Another major consideration when choosing hotel credit cards is the type of bonuses and statement credits they offer customers. Therefore, comparing bonuses and statement credits with different hotel credit cards is helpful and choosing the one that provides the most valuable benefits. For example, you can redeem Hilton points for Lyft credit or Ticketmaster purchases.
  • Redemption value –  With Hilton and Marriot, you can expect a value of 0.6-0.7 cents per point, while the average worth of a World of Hyatt point is about 1.8 cents. Depending on how you use them, your points will have different values. 
  • Annual fees – This is another important factor when choosing hotel credit cards. You have to decide whether to look for a card with the lowest fees or, instead, you are willing to invest in a card that will give you more rewards and perks in exchange for a higher annual fee. 
  • Redemption Options – It is helpful to check out the redemption options for each hotel credit card. For instance, you can redeem Marriot points to enjoy tours, sporting events, and even culinary experiences.
Card
Rewards
Bonus
Annual Fee

World of Hyatt

1X – 4X 4 bonus points per $1 spent for Hyatt stays and experiences including restaurants and spas, 2x for flights purchased directly from the airline, local transit, commuting, restaurants, fitness club, gym memberships and 1 bonus point per $1 spent on all other purchases
30,000 points 30,000 points after you spend $3,000 on purchases within the first 3 months of account opening
$95
IHG Rewards Club Premier

1X – 10X 10 IHG Rewards points per dollar spent on hotel stays with the IHG brand when you pay with your credit card, 2 points per $1 spent on purchases at gas stations, grocery stores, and restaurants and point per $1 spent on all other purchases
140,000 Points + Free Night 140,000 Bonus Points + one free night after making $3,000 in purchases with your card within the first 3 months of account opening
$99
Review

hilton card

3X – 7X 7X Hilton Honors Bonus Points for each dollar of eligible purchases charged directly with hotels and resorts within the Hilton portfolio, 5x points at U.S. restaurants (including takeout and delivery) U.S.supermarkets, U.S. gas stations and 3x points for each dollar on other eligible purchases
80,000 points 80,000 Hilton Honors Bonus Points after you spend $1,000 in purchases on the Card in the first 3 months of Card Membership
$0 (Marriott Bonvoy Boundless Card review 2019

1x – 17X up to 17X total Bonvoy points per $1 spent at over 7,000 hotels participating in Marriott Bonvoy® with the Marriott Bonvoy Boundless® Card, 3X on the first $6,000 spent in combined purchases each year on grocery stores, gas stations, and dining and 2X Bonvoy points for every $1 spent on all other purchases
5 Free Nights 5 Free Nights (each night valued up to 50,000 points) after qualifying purchases
$95
Review

amex brilliant

Marriott Bonvoy Brilliant™ American Express® Card
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
95,000 points 95,000 Marriott Bonvoy® bonus points after you use your new Card to make $5,000 in purchases on the Card within the first 3 months
$650
Review

What Should I Look For In A Hotel Credit Card?

Knowing what features are important to get a credit card for you isn’t necessarily the same thing as looking for a credit card that’s designed to earn hotel rewards.

Here are some features to consider when shopping for a hotel credit card:

Hotel credit cards offer a variety of rewards, benefits, and special perks such as free nights, upgrades, and the option to transfer your points to airline companies.

Check out what you can get and how this is relevant to your lifestyle. 

Some travel cards offer 0% intro APR, they are usually not a co-branded hotel cards, but you can use them to earn hotel rewards. A low APR introductory rate might not be a permanent advantage for your, but it can help save money in that first year. 

If you carry debt, Introductory offers may be great for your needs. Also, it can be used to help finance big purchases with lower interest and fees.

No annual fee is better than paying one for most consumers, but that isn’t always the case. If you’re considering a card with an annual fee make sure the fee is low enough that you’ll get similar or greater value from the card so you aren’t losing money on the fees.

How To Apply For A Hotel Credit Card?

Hotel credit cards are issued by several banks and credit cards companies, such as American Express, Chase bank, Wells Fargo, and other financial institutions. So to get a hotel credit card, there are the following steps to take:

  1. Choosing credit cards – the first obvious step is to narrow down 3-4 hotel credit cards that best suit your needs and offer the best value, as described above.
  2. Ask for pre-approvalApplying for several credit cards at once can have a negative effect on your credit score. However, what you can do here is to ask for pre-approval for those hotel credit cards which you have chosen. In this case, the bank will check whether or not you meet the minimum requirements to get a card. After that, you can apply for a pre-approved card. Of course, pre-approval does not guarantee a 100% approval rate, but in this way, you can improve your chances of getting a credit card.
  3. Gather documents – The next logical step is to gather all necessary documents to support your credit card application. This includes proof of income, your ID, proof of address, bank statement, and other required documents.
  4. Submit an application – After gathering documents, you can apply for a hotel credit card by visiting a bank branch or using the online or mobile application.
  5. Activate the credit card – If you get approved, the bank or credit card company will mail you a hotel credit card. Once you receive your card, you need to call the number attached to your credit card in the envelope and activate your credit card.

How To Maximize Hotel Credit Cards?

You can do several things to maximize the benefits of hotel credit cards. Here are some tips which can be helpful for that:

  • Do not let points expire – Like other types of rewards credit cards, hotel credit card points have an expiration date, ranging from 1 to 3 years, depending on the company in question. Therefore, it is important to keep track of your points and redeem all of them before they expire.
  • Using free nights – As discussed above, many hotel credit cards offer free nights. Therefore, planning your trips around those hotels is helpful, and taking advantage of that benefit.
  • Multiple points on spending categories – Most hotel credit cards allow you to earn multiple points when you spend money on travel-related categories. Therefore, choosing those cards will enable you to earn the most points on your purchases is helpful.
  • Leverage welcome bonus – As discussed above, many hotel credit cards offer bonuses to customers. But this does not mean you will get those bonuses immediately after signing up for a credit card. Instead, you usually have to meet certain requirements to qualify for one. This typically involves spending a certain amount of money during a specific period. Therefore, keeping those requirements in mind ensures you do not miss welcome bonuses.
get access to the best hotel with hotel credit card
(Photo by M101Studio/Shutterstock)

When May It Not Make Sense To Choose Hotel Credit Card?

Despite all of the benefits of hotel credit cards, there are some cases when they might not be that useful. Here are some of the scenarios:

  • You do not often travel – If you do not travel that often, then getting a hotel credit card might not make sense. This is because, in this case, you can not make use of the rewards, such as free hotel nights. Therefore, you will just be letting your points expire unredeemed and wasting money on annual fees. Consequently, it might be better to choose a different type of credit card that offers rewards that you can use.
  • You prefer non-travel-related rewards – You might choose rewards in non-travel-related categories, such as at supermarkets and gas stations, since you spend most of your money there. Consequently, in this case, hotel credit cards are not very useful. Instead, choosing a credit card that offers rewards in those categories might be a better idea.
  • You can’t find a hotel to redeem points – It might happen that the hotel you visit most often does not have a co-branded credit card and offers no rewards. Consequently, in this case, it might be better to consider travel credit cards instead of hotel credit cards.

Which Hotel Credit Card Is Best?

There are several credit cards, which have a number of rewards and perks worth considering, here are some of those:

  • Marriott Bonvoy Boundless Credit CardThis card is issued by Chase bank. One of the perks of this card is that at every anniversary you get a free night at the Marriot hotel. However, one thing to keep in mind here is that those free night awards start at 7,500 points. So this means that you should have at least 7,500 points to get a free night.
  • Hilton Honors American Express Surpass Card – Besides all of the benefits described above, this card also offers a priority pass membership, which gives you access to 1,200 airport lounges, making your journey more comfortable.
  • World of Hyatt Credit Card – This is another credit card issued by Chase bank. Just like with many other hotel cards you get an anniversary-free night here. However, with this card you can get a second free night as well if you spend $15,000 or more, using this credit card for purchases.

Hotel Credit Cards Alternatives

If you think that hotel credit cards might not be the best choice for you, there are some alternatives that you might consider:

  • Travel credit cards – Travel cards are similar to hotel credit cards. The difference is that travel credit cards are typically not co-branded cards with a hotel. Instead, with travel credit cards, you can earn rewards that you can redeem for travel-related rewards, such as airline tickets, car rentals, restaurants, and hotels. So if you do not have a particular hotel in mind where you will spend most of your trips, then travel credit cards might be a better alternative.
  • Cash back cards – Those types of credit cards offer a certain percentage of cash back on your purchases. Here you usually get different rates of cash back with each spending category. You can redeem the cashback for statement credits or direct deposits to your checking or savings account. Cash-back cards might also offer introductory bonuses if you spend a certain amount of money using that credit card.
  • Airline cards – With those cards, you usually get rewards from a particular airline. Here you are accumulating air miles, which you can redeem for trips with that airline. Because travel tickets are one of the most significant expenses when traveling, this can help customers to save a considerable amount of money.

FAQs

Hotel credit cards are quite similar to travel rewards cards. However, the main difference here is that the rewards you can earn with hotel credit cards are more focused on free nights and other bonuses at one hotel brand.

On the other hand, the potential rewards with travel credit cards are more broad, covering not only hotels but car rentals, airline tickets, and other travel-related things.

In most cases, you can use your hotel credit cards abroad, just like other types of credit cards. However, it is worth noting that there are still some places in the world, where credit cards might not be very widely accepted.

Usually, yes. There is no guarantee that you can avoid foreign transaction fees with all hotel credit cards.

It is always helpful to check fees and terms with your issuer to make sure that you avoid foreign transaction fees.

Many hotel cards do come with an annual fee, however, there are some that you can get for free. One example of this is the Marriott Bonvoy Bold credit card, issued by Chase bank.

Many hotel credit cards offer one free night for every anniversary since the opening of the credit card account. So you can take advantage of that offer.

In addition to that, you can redeem your hotel credit card points for free nights

Usually, you can earn points on hotel credit cards not only when you spend money on hotels, but also on other travel-related expenses, such as airline tickets, car rentals, and restaurants. In addition to that, some hotel credit cards allow you to earn points on all of your purchases

Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann's areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.