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Are Airline Credit Cards Worth It? What About Hotel-Branded Cards?



It seems so obvious. You fly a particular airline or stay with a particular hotel chain and you’re very loyal. The logical thing to do, then, is to put all your spending on a hotel- or airline-branded credit card, right?

If you love flying with Delta Air Lines, for instance, why not charge everything you can to that Delta SkyMiles® Gold American Express Card?

Not so fast. 

While you may want to have one or more of these co-branded cards, you don’t want to put all your eggs in these particular baskets. 

Airline and Hotel Cards vs. Cards with Transferable Points

The most important cards to have in your wallet (assuming you’ll pay your balance off in full every month) are cards that earn transferable points, such as American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou Points, and Capital One Miles

Each of these points can be transferred directly into airline and hotel programs, allowing you to find the redemption opportunity first and transfer the points next.

As any traveler knows, even if you are a Delta fan the flight route you want to book may only be available on United. If you only have Delta miles, you won’t be able to book that flight (unless of course you pay the old-fashioned way). 

But if you have transferable points, you don’t have to use them with just one airline. 

To put it simply, your rewards card journey should start with cards that earn transferable points

Something else to think about: Chase, which has some of the most popular transferable-points cards, won’t give you a new card if you have opened five or more personal credit cards among all issuers combined. So it may be appropriate to plan your strategy around first making sure you can get all the Chase cards you want over a reasonable period of time. Because if, say, you opened three cards in the last 2 years and then get an American Airlines and Delta card, you now can’t get any Chase cards for 2 years from when you opened the first of those five cards. (This rule only applies with Chase.)

On top of the miles you earn getting locked into just one program with an airline or hotel card, the earning rate on spending (unless you’re spending on that particular brand) is never as lucrative as cards that earn transferable bank points. 

The exception, mind you, is that if your spend is associated with a given hotel or airline brand, you’ll generally earn the most possible points when you use the brand’s card.

When you spend at Hilton hotels and resorts, for example, the premium Hilton Aspire card earns a whopping 14X Hilton points, and even the no-annual-fee Hilton Honors American Express Card earns 7X.

So there are definitely benefits to getting hotel and airline cards. Just know that they should be a lower priority for consumers than cards with transferable points. 

What are the benefits of hotel and airline credit cards? 

Airport Lounge Access

Let’s say you currently pay for a membership for an airline’s airport lounges, such as the United Club, Delta Sky Club, or American Airlines Admirals Club. 

It might surprise you to learn that there are credit cards for each of these airlines that will get you that same lounge access for less money than buying the lounge membership outright. 

Delta Sky Club: Save by getting a Delta SkyMiles® Reserve American Express Card.

United Club: Save by getting a United Club(SM) Infinite Card.

American Airlines Admirals Club: Save by getting a Citi® / AAdvantage® Executive World Elite MasterCard®.

Even though each of those cards has annual fees north of $500, they all come with lounge access to the respective airline-operated lounges for a lower cost than directly buying a membership.

What’s more, since these are the airlines’ most premium credit cards, you’ll get a lot of other benefits as well. 

The United Club(SM) Infinite Card has a laundry list of additional benefits, like Premier Access at the airport, two free checked bags for domestic flights, IHG One Rewards Platinum status, Avis’ top-tier President’s Club status, and 10% off on United Economy Saver Awards on United and United Express flights when traveling within the continental U.S. or between the continental U.S. and Canada. 

Those are just a few of over a dozen perks this card gives you on top of the United Club membership. 

Sure, the annual fee may give you sticker shock, but you can make that money back many times over by using the card’s benefits.

Free Checked Bags

All the airline credit cards with at least a $95 annual fee come with at least one free checked bag. Rules vary by card, determining whether you get one or two checked bags, whether you must pay for the flight with the card, and how many additional people on your itinerary can get the benefit. 

But in most cases, if you fly just a few times a year, these cards are worth it.

Examples are the United(SM) Explorer Card and the Delta SkyMiles® Gold American Express Card.

Free Hotel Nights

Each of the credit cards listed below comes with an annual free night just by paying an annual fee of $125 or less. In all cases, by being a bit strategic, you’ll easily get $200 in value out of these free night certificates—and sometimes much more. (Note that the certificates do have a cap on how many points the room can cost for the certificate to apply.)

IHG One Rewards Premier Credit Card

Marriott Bonvoy Business® American Express® Card

• Marriott Bonvoy Boundless® Credit Card

• The World of Hyatt Credit Card

While the Marriott Bonvoy Boundless and Bonvoy Business cards have a certificate worth up to a maximum of 35,000 points, you can top off with up to 15,000 more points from your account, making it easier to use. And the IHG Premier certificate caps at 40,000 points, but you can top off that one as well. 

If you are willing to pay higher annual fees, you’ll get more valuable free nights.

What are the benefits of high-end hotel credit cards?

Just like the expensive airline cards with their lounge access, high-end hotel credit cards come not only with free nights that should cover their annual fees on their own, but they also come with valuable status levels.

The Marriott Bonvoy Brilliant® American Express® Card comes with an annual free night worth up to 85,000 Bonvoy points (and can be topped off with 15,000 more), while the Hilton Aspire card comes with a Free Night Reward good at almost any Hilton Honors property in the world, as long as a “Standard Reward” is available. 

While the annual fees on these cards are $650 and $450, respectively, the Brilliant comes with Marriott Bonvoy Platinum Status and the Aspire comes with Hilton’s top-tier Diamond status. Those elevated status levels come with perks such as lounge access at most brands (where available) and either breakfast or some kind of daily food-and-beverage credit. 

If you stay at Wyndham-branded hotels, you can get top-tier Diamond status with a credit card that has just a $95 annual fee: That would be the Wyndham Rewards Earner® Business Card. It even matches over to Caesars Rewards Diamond status if you visit Caesars casinos.

Should you ever put a significant spend on a co-branded credit card? 

Many of the co-branded airline and hotel cards do offer incentives for high spending that you may not be able to get anywhere else. 

Examples include:

Delta: Earn Medallion Qualification Dollars (MQD) waivers with $25,000 in spending on a Delta Platinum or Delta Reserve card and Medallion Qualification Miles (MQMs) when you meet defined spend thresholds as well. For info on what these elite status qualifiers mean, see this page at Delta.com.

(I personally put $30,000 in spending each year on a Delta SkyMiles® Reserve Business American Express Credit Card to get the MQD waiver and 15,000 MQMs). 

United: All United credit cards except the no-annual-fee United Gateway card allow you to earn Premier qualifying points (PQPs) from spending. Learn more about what PQPs are at United.com.

Hyatt: Earn elite night credits from spending to help you qualify for a higher elite tier. Each hotel loyalty program requires that you stay a certain number of nights for each status tier. In the case of Hyatt’s top status, Globalist, you need 60 nights, dubbed “elite nights” because they count toward that goal of achieving a higher status tier.

Hotel-branded credit cards, however, allow you to earn elite nights by spending as if you stayed at the hotel. For example, by spending $5,000 on a personal World of Hyatt card, you get 2 elite nights. Those count exactly the same as if you stayed at a Hyatt for 2 nights, putting you that much closer to top-tier status.

The World of Hyatt Business Credit Card is 25% better on this front, letting you earn 5 elite night credits for every $10,000 in spending.

Marriott Bonvoy: The Bonvoy Boundless lets you earn 1 elite night for $5,000 in spending. This is not nearly as generous as what the Hyatt cards offer, though the Bonvoy cards all automatically come with 15 elite nights each year—and the Marriott Bonvoy Brilliant® American Express® Card comes with 25 elite nights.

American Airlines: The most compelling reason for putting everyday spending on any AAdvantage credit card is that you’ll earn Loyalty Points. Loyalty Points are how you earn AAdvantage® status these days; you can even get top-tier Executive Platinum status with 200,000 Loyalty points. If you did this from card spending alone, you’d have to spend $200,000 on your AAdvantage branded credit cards!

Since American Airlines launched Loyalty Points and made every dollar spent on an AAdvantage credit card earn 1 Loyalty Point, I’m quite certain the amount of spending customers do with these cards has risen dramatically.

Tying It All Together

Now you have a better idea of when it’s worthwhile to carry airline- and hotel-branded credit cards, and when you might want to use them over another option that might earn more points per dollar.

The bottom line: While I recommend earning a diverse set of transferable bank points with your everyday spending, there is a place for a co-branded hotel or airline card or two. Just know what you’re getting—and when to use which card to maximize the benefits. 

Related

Deciding Whether to Get a Credit Card with an Annual Fee

Top Travel Rewards Credit Cards and Current Bonus Offers



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