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Chase and IHG are making some major changes to their co-branded credit card this week. Unfortunately the IHG Rewards Club Select Credit Card is no longer available for new applicants, and in the process they’ve made a negative change to the anniversary free night certificate.
Today a new credit card is open to applicants — the IHG® Rewards Club Premier Credit Card. Here are the details of this new card:
IHG Rewards Club Premier Credit Card welcome bonus
The new IHG Rewards Club Premier Card has a welcome bonus of 80,000 IHG Rewards Club points after spending $2,000 within the first three months. On top of that, you can earn a further 5,000 bonus points when you add an authorized user and make your first purchase within the first three months from account opening.
Personally I value IHG Rewards Club points at ~0.5 cents each, so that’s like a reward of ~$400. That’s a solid sign-up bonus, though not amazing.
Regarding eligibility for this card, the terms state the following:
This product is not available to either (i) current cardmembers of this credit card, or (ii) previous cardmembers of this credit card who received a new cardmember bonus for this credit card within the last 24 months.
Based on this language, it looks like you should be eligible to apply for this card if you currently have another version of the IHG Card, which is good news.
IHG Rewards Club Premier Credit Card annual fee
The card has an annual fee of $89, which isn’t waived the first year. This is significantly higher than the $49 annual fee on the previous card, which was waived for the first year.
IHG Rewards Club Premier Credit Card spending bonuses
The IHG Rewards Club Premier Card offers the following return on spend:
- 10x points per dollar spent at IHG hotels
- 2x points per dollar spent on purchases at gas stations, grocery stores, and restaurants
- 1x point per dollar spent on everything else
Again, I value IHG Rewards Club points at ~0.5 cents each, so to me this isn’t a terribly compelling return on spend. By my valuation, the card earns the equivalent of 5% back at IHG hotels, 1% back at gas stations, grocery stores, and restaurants, and 0.5% back on everything else.
Personally I’d rather use the Chase Sapphire Reserve® Card for hotel spend and restaurants, and The Amex EveryDay® Preferred Credit Card from American Express more for everyday spend. Given that IHG points aren’t worth as much as airline miles, I think they need to up the game here if people are to put a significant amount of spend on the card.
IHG Rewards Club Premier Credit Card perks
The card does offer some perks that help offset the annual fee, including:
Anniversary free night certificate
The card offers a free night certificate on your account anniversary every cardmember year. The certificate is valid for 12 months from when it’s issued, and can be redeemed at any hotel that would cost 40,000 IHG Rewards Club points per night or less. This excludes about 330 of IHG’s 5,300 hotels around the world. While that’s only a small percentage of hotels, it does exclude many of IHG’s best properties.
A free reward night when you redeem points for any stay of four or more nights
This is a pretty cool new perk. When you make a reward booking at any IHG hotel for four or more consecutive nights, the fourth night is free. The fourth night will be free at the time of purchase, so you don’t even need the points in your account for the fourth night, as the price will just show as zero for that night. You can use this benefit for as many bookings as you’d like.
Buy IHG Rewards Club points for 20% off
Just for having the card you can save at least 20% on points purchases when you pay for them using your IHG Rewards Club Premier Card. There’s nothing in the terms stating that this discount doesn’t apply when IHG points are already on sale, so you should be able to save even more during an IHG sale.
IHG Rewards Club Platinum status
You can receive IHG Rewards Club Platinum status for as long as you have the card. This isn’t the world’s most useful hotel status, but it does get you bonus points, room upgrades subject to availability, and more.
A Global Entry or TSA Pre-Check credit
Every four years you get up to a $100 statement credit when you use your card for a Global Entry or TSA Pre-Check enrollment fee. This is a nice perk, though so many cards offer it nowadays (including The Platinum Card® from American Express, the Chase Sapphire Reserve® Card, and the Citi Prestige® Card), that it’s of limited value, in my opinion.
My thoughts on IHG’s new credit card
It goes without saying that the old card with a $49 annual fee and uncapped free night was more compelling. However, that card is no longer open to new applicants, and further, a cap has been added on the hotels you can redeem at, as you’re also limited to hotels that cost 40,000 points per night or less.
Let’s take that out of the equation and look at this card independently. What intrigues me the most about the new IHG Rewards Club Premier Card is the ability to buy points for 20% off and combine that with fourth night free award redemptions.
Let me give an example, based on my understanding of things. Recently IHG sold points for just 0.575 cents each. If you could get a further 20% off, that would mean you’d be paying just 0.46 cents per point. Then if you redeemed for a four night stay, you’d be getting a further 25% off in terms of redemption costs. For example, a four night stay at a top InterContinental costs 70,000 points per night, so a three night stay would cost 210,000 points, or 52,500 points per night. If you’re paying just 0.46 cents per point, that’s like paying $240 per night all-in for stays at IHG’s top properties.
That’s not even the best use of something like this, though. Take the Hotel Indigo Tel Aviv, which costs just 25,000 points per night. That means a four night stay would cost 75,000 points, or 18,750 points per night. If you acquired those points for 0.46 cents each, that’s like paying ~$86 per night, which is amazing.
I wish the $49 annual fee IHG Card still offered an uncapped free night every year. It won’t going forward. While I don’t find the IHG Rewards Club Premier Card as intriguing as the old one, I still see some potential value. I think the annual free night capped at 40,000 points is worth roughly the $89 annual fee, but the area where you can get real outsized value is by combining the ability to buy points for 20% off with the ability to book fourth night free awards. If this works the way I suspect it does, that could be a cool opportunity.