Changes for Hotel Reward Cards
In 2007, credit card issuers are continuing the trend of scaling back reward offers. Hotel reward cards are the latest to make changes.
Their new strategy is promoting hotels into higher levels that require more points. Hilton started this in 2006, the Hyatt Gold Passport followed on December 29, 2006, and Starwood Preferred Guest changes go into effect on February 1.
"Hotels are inflating the points required for a free night stay. While they aren't raising the price for points, they are requiring more points for a free night stay with many hotels," says Bill Hardekopf, CEO of LowCards.com. "This translates into a 3,000-5,000 point increase for many hotels. Travelers are going to have to do a lot more charging to accumulate free nights for their summer vacation."
If you are planning to use your Starwood Preferred Guest points in the next 18 months, book the hotel now. Free Night Awards can be used 18 months prior to arrival, so use your points before February 1 to book the room at current point levels. Here is an example of the point difference: St. Regis in New York currently costs 25,000 points during high season. After February 1, it will cost 35,000 points.
The changes aren't limited to hotel rooms. As of January 1, 2007, HHonors stopped offering airline rewards. Members can redeem their HHonors points for airline miles with select airline partners as part of the HHonors Reward Exchange.
The reward card changes began in 2006 when American Express eliminated the double points for everyday purchases and Citibank reduced the cash back earned on purchases from 5% cash back to 2%.
"Rewards are a big expense for issuers and we expect them to continue to find ways to make changes and cut their costs. These changes show that consumers must stay informed about their reward cards. It is a good idea to know what you want to accomplish with your reward points and pay attention to notices from your credit card company," says Hardekopf. "Set goals for how you will use your points. Don't just let the points accumulate forever or reward changes may reduce what you have."
LowCards.com ( http://www.lowcards.com ) is a website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards/rebates, and lowest intro rates. It also gives and unbiased ranking and review for each card. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for over five years.
Their new strategy is promoting hotels into higher levels that require more points. Hilton started this in 2006, the Hyatt Gold Passport followed on December 29, 2006, and Starwood Preferred Guest changes go into effect on February 1.
"Hotels are inflating the points required for a free night stay. While they aren't raising the price for points, they are requiring more points for a free night stay with many hotels," says Bill Hardekopf, CEO of LowCards.com. "This translates into a 3,000-5,000 point increase for many hotels. Travelers are going to have to do a lot more charging to accumulate free nights for their summer vacation."
If you are planning to use your Starwood Preferred Guest points in the next 18 months, book the hotel now. Free Night Awards can be used 18 months prior to arrival, so use your points before February 1 to book the room at current point levels. Here is an example of the point difference: St. Regis in New York currently costs 25,000 points during high season. After February 1, it will cost 35,000 points.
The changes aren't limited to hotel rooms. As of January 1, 2007, HHonors stopped offering airline rewards. Members can redeem their HHonors points for airline miles with select airline partners as part of the HHonors Reward Exchange.
The reward card changes began in 2006 when American Express eliminated the double points for everyday purchases and Citibank reduced the cash back earned on purchases from 5% cash back to 2%.
"Rewards are a big expense for issuers and we expect them to continue to find ways to make changes and cut their costs. These changes show that consumers must stay informed about their reward cards. It is a good idea to know what you want to accomplish with your reward points and pay attention to notices from your credit card company," says Hardekopf. "Set goals for how you will use your points. Don't just let the points accumulate forever or reward changes may reduce what you have."
LowCards.com ( http://www.lowcards.com ) is a website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards/rebates, and lowest intro rates. It also gives and unbiased ranking and review for each card. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for over five years.
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