Hotel Cards

Just as hotel programs are often considered also-rans to the airline programs, so too do the hotel programs' cards get less respect than the airlines'.

As a result of their Rodney Dangerfield-like status, they have to try harder. Which can be good news for consumers.

First up in the "good news" category is annual fees. Hilton's card is fee-free. The annual fee for the Starwood card fee is $45, but it's waived for the first year, as is the $30 fee for Marriott's Rewards card and the $29 fee for the Priority Club card. And while annual percentage rates (APR's) for the Hilton and Starwood cards are high at 15%-plus, Priority Club and Marriott Rewards cards come in at 13.24% as of 5/22/2010. (See the Hotel Card Comparison for more.)

When it comes to the overall value proposition, however, hotel cards don't fare as well, especially if the goal is to earn airline miles.

Holders of the Hilton card, for example, earn 6 HHonors points for every dollar charged at Hilton hotels and at selected other retail categories, and 3 HHonors points per dollar for other charges. HHonors points can be converted into airline miles in many programs, usually at the rate of 10 HHonors points for 1.5 airline miles. So assuming you converted your Hilton credit card points into airline miles, you would be earning at only 45% - 90% of the mileage-earning rate for most charges made on the airline cards. Again, assuming the desired payout is in airline miles.

(An exception to that rule is the Starwood Preferred card, which awards points that can be exchanged 1:1 in most airline programs, and a bonus to boot -- 25,000 miles for 20,000 points.)

On the other hand, if your goal is to earn free hotel stays rather than free flights, the value picture improves.

Again using Hilton's program as an example, a free hotel night at a lower-priced Hilton (a Category 2 hotel, in the HHonors classification system) is offered for 12,500 HHonors points. Assuming you earn your points a the 1:6 ratio in effect for hotel charges, you would have to spend $2,083 to generate the required 12,500 points. If the value of a Category 2-class room is $100, the award would amount to a 4.8% rebate. And that's significantly better than the 1-2% rebate represented by the $1-earns-1-mile formula used by the airline cards.

Hotel Cards Compared