Best Hotel Credit Cards

Whether you’re traveling for vacation or visiting family and friends, hotel accommodations can take a chunk of your budget. A moderately priced hotel can run $100 or more a night, and many hotels nickel and dime their customers by charging extra for Wi-Fi and breakfast.

A hotel credit card is your best bet if you’re looking to score free or discounted accommodations. These credit cards are similar to other credit cards. The main difference is that you earn reward points with each purchase, which are good for hotel stays. There’s the option of co-branded hotel credit cards that earn points when you book with an affiliated hotel brand or generic hotel credit cards which are essentially travel credit cards issued through banks like Chase or Discover.

Signing up for a hotel credit card can make future travel cheaper, but there are a few things to know about maximizing your reward and saving the most money.

Discover the Best Hotel Credit Card

How Do Hotel Credit Cards Work?

The purpose of a hotel credit card is to earn reward points redeemable for hotel stays and other travel. You earn points for every dollar spent on eligible purchases, and some hotel credit cards include sign-up bonuses where you can receive a large sum of points (or free nights) after spending a certain amount within the first three months of opening the account.

To qualify for this bonus, use the card every time you book at participating hotels and resorts. But don’t limit usage to only hotels. Some people think hotel credit cards are exclusively for booking accommodations, but this isn’t the case. You also earn a point when using the card for everyday purchases. Take the Hilton Honors card from American Express. You can earn 7x points at participating hotels or resorts; 5x points at U.S. restaurants, supermarkets and gas stations; and 3x points on other eligible purchases.

Many hotel credit cards feature a tiered system, so the more you use the card, the faster you can upgrade your status and qualify for more points per purchase. A status upgrade could result in 15% or 25% more points per dollar spent, plus you become eligible for extras at no additional charge. These include room upgrades, free in-room Internet, priority late checkout and gift shop discounts.

Hotel Credit Card vs. Reward Credit Card

You might question whether a hotel credit card is a right choice for you. You don’t “need” a hotel credit card to earn points on purchases, especially since many non-hotel rewards credit cards have a similar structure—earn points or miles redeemable for merchandise, gift card, travel, statement credit or cash back. But there are benefits to choosing a hotel rewards credit card over other options.

How do you choose between a hotel credit card and other reward credit cards? Consider your travel and spending habits and ask yourself these questions:

  1. How often do you stay in hotels?

Hotel credit cards reward loyalty, so you’ll earn more reward points on bookings with participating hotels and resorts. Evaluate how many times you’re likely to stay in a hotel over the next year, even if only for one night. Rather than book the hotel with any credit card, use your hotel credit card and walk away with significantly more points per dollar. This puts you closer to a status upgrade and free nights.

  1. Do you have experience using a reward credit card?

There’s no rule that says you should have a standard rewards credit card before getting a hotel credit card. But if you already have experience earning and redeeming reward points, transitioning to a hotel credit card eliminates the learning curve. Chances are, you’re already familiar with sign-up bonuses, blackout dates, and spending categories.

Not to say your first rewards credit card shouldn’t be a hotel credit card—just make sure you find a card that serves your travel needs and fits your spending style. Most importantly, make sure you understand which spending categories earn the most reward points, and then use the card when shopping with these retailers.

  1. Do you have a favorite hotel chain?

Some people don’t care about brands—they care about price. As long as a hotel is within or under their budget, and meets their personal standard, they’ll reserve a room regardless of the chain. These travelers might say they don’t need a co-branded hotel credit card. But just because you’ve never been loyal to a brand doesn’t mean a generic card is a right choice.

Before settling on a generic hotel credit card, see what co-branded hotel credit cards can offer with regard to fees, rates, and other perks. Exploring the possibility of brand loyalty could result in better rates and fewer fees, potentially saving hundreds or thousands in the long-run.

  1. How often do you use credit?

A rewards credit card is only rewarding when you use the card and accumulate points. If you prefer debit or cash and never pull out a credit card, you might never earn enough points for a free hotel stay.

Be realistic and think about how often you use credit. To help you decide whether you’ll benefit from a hotel credit card, come up with a list of places where you currently use credit, as well as places where you could begin using credit to earn points. Use the card at gas stations, grocery stores, or use the card to pay your cell phone bill or utilities. If you start using the card for everyday purchases and bills, use it responsibly and pay off the balance every month.

Choosing the Right Hotel Credit Card

If you believe a hotel credit card is a right choice for you, here’s what you should know before applying.

  1. Credit requirements

Applying for a hotel credit card doesn’t mean you’ll get approved. The issuing bank will review your application to determine eligibility, which is based on your credit score and your payment history.

Before applying for new credit, check your credit report to ensure your credit is in good shape. Order your free credit report from AnnualCreditReport.com and purchase your credit score from MyFico.com. Take steps to boost your score and improve the likelihood of getting approved, which includes paying bills on time. Getting a rewards credit card typically requires good or excellent credit. Aim for a credit score of 680+ before applying.

Keep in mind, you can still get denied with a high credit score. This might happen if you have too much existing debt. So, make sure you pay down credit cards before applying for a new card. Errors on your credit report can also result in a denial. Dispute any erroneous information on your credit report and contact creditors to get these negative items off your file.

Credit card companies rarely issue hotel credit cards to applicants with bad credit. You may, however, qualify for other credit cards featuring a rewards program. One option is the Discover It secured card. You’re required to pay a security deposit, but you’ll also earn cash back on every purchase. Use this card to establish or rebuild your credit, and then apply for a hotel credit card once your score improves.

  1. Annual fees

Annual fees are one drawback to rewards credit cards, but many hotel credit cards don’t charge this fee. This is true with the Hilton Honors card from American Express. As you shop around, tailor your search and look specifically for cards without an annual fee, or at the very least cards that waive the annual fee the first year. If you’re thinking about getting a card with an annual fee, first determine what you’re getting in return for this fee. These cards may offer additional cardholder benefits, but the fee only makes sense if you utilize these benefits.

  1. Foreign transaction fee

If you only travel within the United States, you might care less about foreign transaction fees. If your travel plans include booking hotels overseas, look for cards that don’t charge this fee. Foreign transaction fees are extra costs attached to overseas purchases and can be as high as 3% per purchase.

  1. Interest rates

When shopping for a hotel credit card, don’t only focus on brands connected with the credit card. You should also focus on the interest rate. If you don’t pay off balances in full every month, avoid cards with higher rates. These cards increase the overall cost of purchases.

Read the credit card application carefully and look for information about rates. If the application says the card charges between 16% and 24%, the lowest rate you can expect with perfect credit is 16%.

  1. Compare sign-up bonuses

A sign-up bonus is one of the fastest ways to earn points and a free night. One credit card might give 50,000 bonus points if you spend $3,000 within the first three months of opening the account, and another card might give 30,000 bonus points if you spend $1,000 in the first three months. This is an attractive promotion, but don’t automatically select the card offering the most bonus points. Select a card based on how much you can afford to spend over the next few months.

Pros of a Hotel Credit Card

  • Earn more points per dollar with a co-branded card. Generic hotel or travel credit cards may only earn two points or one point for travel-related purchases and everyday purchases. With a hotel credit card, there’s an opportunity to earn more than double or triple the points, plus you get bonus points for spending a certain amount within the first three months.
  • Stop getting nicked and dimed by hotels. It’s not unusual for hotels to charge guests for every single service. A co-branded or generic hotel credit card can result in significant savings. In addition to free nights, you’ll also qualify for freebies as your tier or status improves. These include free breakfast, free Internet, spa discounts and free room upgrades. Before getting a hotel credit card, read the terms of an agreement to understand the benefits that come with each tier, and learn how much you need to spend to qualify for the next tier. Also, see if the card includes other cardholder benefits, such as rental car coverage and traveler’s insurance which covers the cost of lost or damaged luggage and trip cancellation.
  • Earn points in different spending categories. To maximize reward earnings, don’t get a credit card that only earns points on hotel purchases. Get a credit card that earns points on all purchases.

Cons of Hotel Credit Card

    • High spending requirement. Points are worth about $0.01, so you would need to accumulate about 10,000 points before you’re eligible for a $100 reward—the equivalent of one free night in a hotel. Even if you receive 7 points per dollar with a co-branded hotel card, you would have to spend roughly $1,428 on hotel stays before you’re eligible for one free night
    • Expensive (add in the costs of annual fees, foreign transaction fees, and a higher interest rate). Compare costs to understand exactly what you’re responsible for paying, and look for cards that don’t charge annual fees and foreign transaction fees.
    • Complicated reward structure. Reward structures vary from credit card to credit card. Some cards reward points on all purchases, whereas others only reward points on certain purchases. Read up on the reward structure and make sure you understand the rules for earning points, or else you could end up spending a lot of money on purchases that don’t qualify for points.
    • Some hotel credit cards allow cardholders to redeem free nights at any time, whereas others have blackout dates and don’t allow redemptions or other discounts on certain days of the year.
    • Points may expire. Keep in mind that credit card points may expire after a certain time period or if your credit card account becomes inactive. Use the card regularly to prevent losing your points.

Learn More about Travel & Airline Credit Cards


Conclusion

If you travel often and frequently stay in hotels, a hotel credit card is worth adding to your mix. These cards can make vacations and getaways a little cheaper, plus you can enjoy additional freebies and perks such as room upgrades. Just make sure you choose the right card, which is preferably a card with the lowest rate and fewer fees.

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