Should You Spend $15K On Hyatt’s Credit Card Every Year?

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In June The World of Hyatt Credit Card was introduced, which is in my opinion one of the most well thought out hotel credit cards we’ve seen in a long time. Not only does the card offer great perks just for having it, but it can actually make sense to put spend on the card.

I’ve had fun running the numbers on some different scenarios. For example, a few days ago I wrote about how it can make sense to put $15,000 of spend on the card the first year:

  • You unlock the card’s entire 60,000 point welcome bonus after spending $6,000 ($3,000 of that needs to be spent within the first three months, and the other $3,000 within the first six months)
  • Then you receive an additional Category 1-4 free night certificate when you spend $15,000 on the card in an anniversary year
  • In addition to the five elite nights you receive per year just for having the card, you get two additional elite nights for every $5,000 spent, meaning you’d have a total of 11 elite nights from the card per year if you spend $15,000 on it

Reader Boraxo asked the following:

How do you value the 15k points and the free Cat 1-4 night? Is it worth spending on this card vs Amex or Chase points which are worth more than Hyatt points?

This is another interesting scenario to run the numbers on. While I’ve presented the case for how I think it could be worth spending $15,000 on The World of Hyatt Credit Card the first year since you need to spend $6,000 anyway to earn the welcome bonus, how does the math work out in subsequent years?

The basic opportunity cost of credit card spend

The first step in deciding whether or not this is worth it is figuring out the opportunity cost of credit card spend. This will all be based on what your most rewarding cards otherwise are.

For many of us (including me), I think the best return you’ll get on non-bonused everyday spend is having the Chase Sapphire Reserve® Card and Chase Freedom Unlimited®, since the latter offers 1.5x Ultimate Rewards points per dollar spent on base spend (it’s my favorite credit card duo).

I value Ultimate Rewards points at 1.7 cents each, so to me that’s a return of 2.55 cents per dollar, based on my valuation. So the opportunity cost of $15,000 of spend per year is $382.50.

The value of spending $15,000 on Hyatt’s card every year

Personally I value World of Hyatt points at 1.5 cents each, so spending $15,000 on The World of Hyatt Credit Card in non-bonused categories would net you $225 in rewards based on the value of 15,000 points.

But if you spent that amount you’d also earn an incremental Category 1-4 free night certificate, and you’d earn an increment six elite nights towards status (this is in addition to the Category 1-4 free night certificate and five elite nights you get every year just for having the card).

So are the incremental Category 1-4 free night certificate and six elite nights worth $157.50?

Valuing Hyatt Category 1-4 free night certificates

Different people have different ways of going about valuing points and certificates.

Some say that a certificate like this would be worth the retail value of whatever you redeem it for. I redeemed one of these certificates for a stay later this year at a Hyatt property that would have cost $400 including taxes and fees.

But I won’t value the certificate that high, because:

  • I could have redeemed 15,000 points, and I value those at 1.5 cents each, so that means I could have gotten the stay for $225 worth of points
  • I would have never paid $400 to stay at this hotel

Some might value the certificate based on the equivalent number of points it can be redeemed for. In this case a Category 4 stay would cost 15,000 points, so you could say it’s worth $225.

Personally I’d want to assess some sort of a discount to the value of the certificate, in order to account for the fact that:

  • It’s only valid for a year from when it’s issued
  • In order to maximize value you need to redeem at exactly a Category 4 hotel

I’d apply a discount of about a third, and I’d say my valuation of a Category 1-4 free night certificate is about $150. There’s no science to that math, since this is so dependent on everyone’s specific scenario.

I think that’s a fair number, and hopefully it also shows why this card is worth having in general. You get a free night certificate every year on your account anniversary just for having the card, and the card’s annual fee is only $95.

Doing the math

With the Chase Sapphire Reserve® Card and Chase Freedom Unlimited®, the opportunity cost of the spend is $382.50, by my valuation.

Spending $15,000 on The World of Hyatt Credit Card would earn you $225 worth of points, by my valuation. Then you get a Category 1-4 free night certificate that I personally value at around $150, bringing the total to $375, which more or less makes it breakeven.

What this doesn’t factor in is the six incremental elite nights you’d earn. If you’d at all benefit from having those elite nights, then I’d say it’s a no brainer to put $15,000 of spend on the card every year.

Let me of course acknowledge that:

  • Not everyone will value Ultimate Rewards and World of Hyatt points the way I do
  • Not everyone will value a Category 1-4 free night certificate the way I do
  • Not everyone spends $15,000 per year in non-bonused categories, in which case the math works out differently
  • The math could work out more favorably towards the Hyatt Card if you can put spend from Hyatt Hotels on the card (where you’re earning 4x points), or spend from gym memberships (where you’re earning 2x points, and that’s a bonus category you don’t see much on other cards)

My intent with these posts is to create a framework for thinking about valuing credit card spend, rather than suggesting that my math is the only right way to think about it.

I’m curious what you guys think — is it worth spending $15,000 per year on The World of Hyatt Credit Card for an incremental Category 1-4 free night certificate and six elite nights?

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Comments

  1. Lucky,

    All of the major hotel credit cards are now offering free night certificates, so they are becoming more important to the value of these cards. I think you are generally discounting these certificates by too much. If you redeem at a category 4 that is high priced, you come out way ahead. If you do a few leieure stays at Hyatt a year, it seems likely you will be able to redeem. Also, most customers will probably use some of the bonus categories. Someone who is spending $15,000 on a Hyatt card seems likely to maximize both the spend and the redeeming, so I think you should be valuing these a bit higher.

    We’ve spoken about this before, but I think the certificate currently out here is the Hilton weekend nights you get with the Ascend and Aspire as they are not limited by points categories. You can get $700+ value if you truly maximize it.

    I’d be interested to see how you view the 35K/50K certs on the SPG/Marriott cards, especially given they don’t require any spend.

  2. The problem for me all lies with the calendar vs cardmember year. I have the card now and spent about $8k so far. So got the bonus points, and will almost certainly get the free night certificate.

    But having the earned nights reset in January makes them worth exactly 0 to me.

    If I could do it again, i would have waited and signed up so my cardmember year and calendar year matched up. Then it would be a no-brainer to spend like crazy in the first part of 2019 and would reap maximum benefit.

  3. I think that the math here underestimated the real ‘opportunity cost’. The true value of the CSR for most is that it awards 3x on everyday activities (dining and ‘transiting’ [travel brings the wrong picture to mind since the category is much more broadly defined for this card)]). That means that the CSR’s $15K would probably come mostly from earning 3x rather than 1x. On the other hand, unless one travels extensively, the $15K on the WoH card would come primarily from unbonused spend rather than from 4x that would be earned from revenue stays at Hyatt properties. Having to go out of one’s way to find a Hyatt hotel and earn 4x is the WoH card’s shortcoming relative to the CSR, which would 3x at your neighborhood Wendy’s.

    That’s how to estimate the ‘opportunity cost’ and why it would be prohibitively high to put a lot of spend on the WoH card instead of on the CSR or another card with a similar earning structure.

  4. Lucky great article. I love this new credit card, it really is such a positive improvement for Hyatt.

  5. All three of these Hyatt credit card posts over the last few days have been so informative and well-written. Thanks Ben 🙂

  6. Meanwhile, an author on The Points Guy talks about how he prefers carpeted hotel rooms so he can sweat all over them, as going to the gym works against his “minimalist” lifestyle.

    OMAAT +1, TPG 0

  7. I would rather spend $15K on the Hilton Ascend at grocery stores (6x), which would earn me 90,000 points and one free unrestricted weekend night. That’s basically two free nights anywhere in the Hilton world, with free breakfast included for getting gold with the Ascend

  8. I agree with uk, and based on comments, more people are catching on. The Ascend is one of the better cards out here for spend. If you can spend $15,000 in dining and grocery, the card is worth it year after year. I plan on keeping it and spending on it even after I get the Aspire.

  9. @It would make more sense to put the 15K on a co-branded AMEX Hilton card only if that is one’s only way to earn HH points. Spending $15K for hotel stays on the Aspire will earn 54x (to end of the current Q2 promo) or 44x (for Q3 promo that’s about to start). Which is it: 44x or 54x vs 6x? No comparison. Instead of 60K, one would earn 660K.

  10. DCS – Obviously that’s the case, but for me, I pay out of pocket for four or five hotel stays a year, and not all of those can be Hilton stays. In 2018, I think I will put two Hilton stays on my Amex. In contrast, I will probably have another 15Hilton nights paid for on a corporate card this year. So if I want to book long weekends or entire weeks at Hilton properties with points annually, I am going to need to augment points earned traveling with non-Hilton spend on a card. If you hold an Aspire and Ascend and spend $15,000 on dining/grocery on the Ascend (and put actual Hilton spend on the Aspire), you end up with enough points and certainly for a long weekend at the Condrad Tokyo, Waldorf Beverly Hills, Hilton Paris Opera, etc every year, before you take into account any earnings you get from staying at Hilton properties.

  11. Perfect timing–I was struggling with this issue literally this afternoon, since I just finished my Starwood Luxury card spending to get 100,000 points and will be done soon with my Citi Thank You Premier card spending to get 60,000 points.

    Had been Hyatt Diamond for two years and WOH Explorist for two years, and am coming to the conclusion that if you can’t make Globalist, it’s not worth it. I get free breakfast and lounge access at Marriott/Starwood (Platinum Premier) and at Hilton (thank you Aspire card), but in order to get breakfast at a full service Hyatt, I need to find a Hyatt with a lounge and use one of my four lounge benefits per year. That in and of itself rules out a lot of Hyatts. I find myself trying to plan trips around Hyatt locations with lounges, which is crazy. especially when it is so easy to find a Marriott/Starwood or a Hilton at a convenient location.

    I know you guys love your Hyatts, but if you can’t make Globalist, does it really pay to play the Hyatt loyalty game? I can make Explorist for another year but wondering why. And if you are not going for Globalist, does it makes sense to put $15K on this card in non-bonus categories instead of CSR/CFU? I like Hyatts and will make almost certainly make use of the free certificate, but as you note, I am effectively giving up 7500 UR points for that free certificate (22,500 UR points vs. 15,000 Hyatt points for the same $15K of spend), which makes it look someone less than free.

    It’s a close call. Not sure what I will or should do. Enjoying the comments (as well as the articles).

  12. Ever since I got the new Hyatt card, i put most of my everyday spending on it. Here are my reasons:
    – I do not spend enough to generate enough points for both airfare and hotel stays, so I chose free hotel stays at nice places that I would not be able to afford otherwise, and pay for my flights. Given how cheap flights to Europe (my main holiday destination) are these days, it works for me.
    – I expect to get about 8 elite nights from my personal spending in 2019 and 6 nights from work related reimbursable expenses. Add the 5 nights that one gets from simply having the card and I will only need 36 nights at Hyatt to requify as a Globalist
    The only spending I put on my CSR is to get my $300 back for travel expenses, car rentals and purchases that could benefit from extended warranty

  13. I have already spent the $15k and collected the free night. Coupled with the 6 nights credit to Globalist, definitely worth it. A key change is the free night will count towards next year’s night count, a big improvement in the Workd if Hyatt program.

  14. @Anthony

    I tend to value all these free night certs a lot less than typical rate. This is how I think @Lucky views it. If you are rich spoiled person who normally stays at cat 7 hotels, to have to downgrade to lowly cat 4 is unacceptable. This is not for everyone.
    Imagine giving a free Spirit ticket to Bill Gates, do you think he will use it over his private jet??? How much would you value that ticket, $30-200?? Billy probably values it at -$4000 since his Bombardier has wifi for his XBox and Spirit doesn’t.

  15. A free night at a category 1-4 is stingy IMO. At least give a free night at a category 1-6 would make the card more worthwhile to keep and spend on.

  16. I value the free night at more than $150, discounting it by a third is steep. Therefore, if you’re a Hyatt loyalist it makes great sense to put 15k every year. On some level, you can look at the whole transaction as three free nights at a category 1-4 for 15k unbonused purchase and a $95 annual fee.

    You start the year off with zero. You put 15k on the card and by the end of the year you have 15,000 Hyatt points (enough for one category 4 night), a free night at the anniversary of your card ($95 annual fee) and the bonus of hitting the 15k threshold is another Category 4. Obviously the last two have expiring dates and you don’t need to use the 15,000 points with them but you could.

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