What’s the Best Hotel Rewards Credit Card in the UK?

Review of the Best Hotel Credit Cards

I’m embarrassed to say that I’ve recently redeemed Avios points for an upcoming hotel stay in Dubai at a dismal rate of 0.5p.  With this painful experience still hanging over me I thought it would be a good idea to look at some of the best hotel credit cards in the UK and see if any of them would have provided better value (hint:  The answer’s yes!).

One thing I’d highlight at this point is that not all hotel rewards credit cards are made equal with some providing significantly better value than others!  Within this review of the best hotel rewards credit cards we’ll cover the good, the bad and the ugly to find the most suitable for you…

Why Use A Hotel Rewards Credit Card?

Since the age of 18, when I was first able to sign up for a credit card, I’ve been benefitting from the wonders of the rewards and bonuses they offer.  With competition increasing from new ‘fin-tech’ entrants to the market, credit card providers are having to offer ever more generous bonuses to entice new customers and ongoing rewards to retain existing credit card users.

Whilst the various benefits vary (we’ll touch on this more later), a hotel credit card will generally provide a sign-up bonus in the form of membership points and a further reward for the ongoing spend on the card, again usually in the form of points.  Additional benefits can include reward programme elite status and free night stays.

How Can Credit Cards Offer Such Generous Rewards?

As you may know, credit card companies charge retailers a processing fee every time you make a purchase on a credit card.  These fees can vary between 0.3% and 3% on every transaction, so it can be in the credit card company’s interest to encourage customers to continue to spend money.

To do this they’re prepared to pay you a proportion of the fees they receive.  This payment can come in many forms such as cashback, air miles or in this instance free hotel stays and benefits!

The Do’s and the Don’ts

The world of credits cards can be wonderful if used correctly or alternatively can be a one-way ticket to destruction.  As such we’ve provided some do’s and don’ts when using a hotel rewards credit card:

• Pay these credit cards back each month: The interest rates for the best hotel credit cards can be notoriously high.  If there’s even the smallest risk you won’t pay the credit card off at the end of each month then these are unlikely to be for you.
• Set up a direct debit: To ensure you pay off the card each month we’d recommend setting up a direct debit.
• Make sure the rewards are right for you: There’s no point using a credit card to earn points for something you wouldn’t want to redeem.  There are 100s of ways you can redeem benefits from credit cards so ensuring you pick the right one for you is key.  For further inspiration take a look at my recent article on the best reward credit card.
• Don’t spend extra on the card just for the reward: Treating yourself to a nice lunch to hit that 3-month spend bonus and receive the sign-up bonus rarely (actually never) makes sense.  The rewards will also feel a whole lot sweeter when you know they’re completely free!
• Maximise points: As I alluded to at the start of this article, I recently used Avios through the British Airways Executive Club website to redeem a 2-night stay at the Hilton Dubai Creek.  This set me back 36,350 Avios points.  The cash equivalent would have set me back £193.67 which equates to a redemption rate of 0.5p.  Usually I’d hope to get somewhere in the region of 1p for every Avios!  The moral of this story is always try to maximise your points redemptions – I’m a hypocrite, I know!

Best Hotel Credit Card – What Are the Options?

Within the UK there are both branded hotel credit cards (think IHG, Starwood, etc.) as well as ‘unbranded’ credit cards which will allow you to convert points to a number of different hotel brands.  One key determining factor for some people will be whether there is an annual fee charged to hold the card.  As such we’ve broken the various cards down between free and premium options:

Free Best Hotel Reward Credit Cards

IHG Rewards Club MasterCard (reviewed here)

• Sign-up bonus: 10,000 IHG reward points
• Continued earning rate: 1 point for every £1 spent / 2 points on spend abroad and with IHG
• Other benefits: Gold elite status
• Thrifty Points Thoughts: Whilst the 10,000 IHG reward points would be enough to redeem an entry-level IHG-branded hotel, the free night’s stay when you spend £5,000 in a year on the Premium version of this card could be worth up to £500 if used at the correct hotel.  If you’re able to spend £5,000 on a credit card, in my eyes the £99 would be more than offset by the free night’s stay.

American Express Gold Card (reviewed here)

• Sign-up bonus: 10,000 reward points increased to 12,000 with this link (equivalent to 24k Hilton / 18k Marriott Bonvoy / 36k Radisson)
• Continued earning rate: 1 reward point for every £1 spent
• Other benefits: 2 free lounge passes
• Thrifty Points Thoughts: This card is the most generous rewards card currently in the UK market and as such gets our vote as best hotel credit card.  It also has the added benefit that points can be transferred to 3 hotel reward schemes providing increased redemption flexibility.  You can increase the sign-up bonus from 10,000 points to 12,000 points using this link.  I would however highlight that whilst the first year is free, a fee of £140 pa is payable from the end of the first year.  We’d strongly recommend cancelling before this free 12-month period is up!

Virgin Atlantic Credit Card (reviewed here)

• Sign-up bonus: 5,000 Virgin Flying Club points which can be transferred to 5,000 IHG points
• Continued earning rate: 75 points for every £1 spent
• Other benefits: None
• Thrifty Points Thoughts: With a relatively poor sign-up bonus and a lower continued earning rate than the other two cards, the free version of the Virgin credit card would finish in last place for us.

Premium Best Hotel Credit Cards

IHG Rewards Club Premium MasterCard (reviewed here)

• Sign-up bonus: 20,000 IHG reward points
• Continued earning rate: 1 point for every £1 spent / 2 points on spend abroad and with IHG
• Other benefits: Platinum elite status / Free night stay when you spend £5,000 in a year
• Annual Fee: £99 pa
• Thrifty Points Thoughts: If redeemed correctly the free night stay could be worth up to £500, offsetting the annual fee.  The sign-up bonus is however poorer than some of the competition.

American Express Platinum Card (reviewed here)

• Sign-up bonus: 30,000 reward points increased to 35,000 rewards point here.
• Continued earning rate: 1 point for every £1 spent
• Other benefits: hmmm, quite a few
  • Free membership to the following hotel reward programmes:
    • Hilton Honors Gold
    • Melia Rewards Gold
    • Shangri-La Golden Circle Jade
    • Starwood Preferred Guest Gold
    • Club Carlson Gold
  • Lounge access when flying with Delta
  • International travel insurance for the whole family (this could save at least £150 per year!)
  • A free priority pass providing unrestricted access to over 1,000 airport lounges. You’ll also be able to take one guest with you free of charge.
  • Free car-hire insurance
  • Complimentary Eurostar lounge access
• Annual Fee: A whopping £575 pa (read our review here to find out why we believe for some people this fee could actually provide good value!)
• Thrifty Points Thoughts: With the ability to gain elite status in a number of hotel rewards programmes this could be the ultimate credit card for hotel rewards.  However, unless you travel regularly and would benefit from the unlimited airport lounge access or free rental-car insurance the £575 annual fee is likely to be prohibitive.

Best Hotel Reward Credit Cards – Let’s Sum Up

As we’ve seen, there are currently a number of both branded and unbranded credit cards in the UK market which will allow you to earn and transfer points to hotel schemes.

The right one for you is likely to depend on your individual circumstances, however for most the American Express Gold card offers flexibility to redeem across a number of brands, a market-leading sign-up bonus and 2 lounge passes just to top things off.  Don’t forget to cancel the card just before the free 12-month period is up otherwise you’ll be charged the annual fee!  You can read how I combined this credit card with one other to earn enough points to fly First Class from London to Sao Paulo in my article found here!

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