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Update: Some offers mentioned below are no longer available. View the current offers here – Citi ThankYou Premier, Citi Hilton HHonors Visa Signature Card

Whether you’re just getting started as an award traveler yourself or trying to help a friend join the club, today TPG Senior Points & Miles Correspondent Nick Ewen explains which travel rewards credit cards are best for beginners interested primarily in redeeming points for free hotel stays.

One of the most common concerns I hear from new award travelers is that it’s a complicated hobby. To some degree, they have a point. The process of earning and redeeming rewards can be hard to navigate at times — deciding where to begin is often a challenge in and of itself (and sometimes calls for a Points Intervention!). However, there are many ways to ease yourself into the points and miles game. Last month, I looked at the overall best starter cards for new points and miles enthusiasts, and I followed that up with a post ranking the best starter cards for award flights. In this post, I’ll shift gears and rank what I think are the best starter credit cards when it comes to earning free nights in hotels.

Which credit card is the best for new award travelers looking to earn free hotel stays? Image courtesy of Shutterstock.

First, I want to share my overall methodology for developing these rankings. I started by searching through the multitude of credit card products out there to make a list of 10 cards that are ideally suited for earning free hotel stays (I personally have recommended several of these cards to friends or family members at some point). I then rated each card across five key categories on a scale from 1 to 3. These are the categories, along with the rating scale I used for each one:

1. Annual fee — When I first started earning points and miles, I stayed away from cards with annual fees like they carried the plague, and I’m sure many of you have felt the same way. However, I soon realized I was missing out on some valuable products with annual fees that were totally justified by the benefits that came with them. My list below includes a mixture of cards both with and without annual fees; I awarded more points for those with lower (or no) fees:

  • No annual fee = 3
  • Annual fee below $60 = 2
  • Annual fee above $60 = 1
  • Add 0.5 bonus points if the annual fee is waived for the first year

2. Value of points — You typically can’t compare points across programs using simple numerical analysis without considering their value. Two points in one currency might be worth five points in another. That’s one of the main reasons for TPG’s monthly valuations, which help illustrate the dollar value of each program’s currency. To rate point values, I used the following scale:

  • Points worth 2 cents or higher = 3
  • Points worth 1.5 – 2 cents = 2
  • Points worth less than 1.5 cents = 1

3. Sign-up bonus

Another key factor to consider is a card’s sign-up bonus. While these bonuses generally apply only in your first year as a cardholder, they still offer a compelling reason to choose one card over another, especially when you have a limited-time offer (like the current sign-up bonus on the Citi Hilton HHonors Visa Signature Card). I also used TPG’s most recent valuations to calculate the overall value of each card’s initial sign-up bonus, and to rate bonuses as follows:

  • Value of $750 or more = 3
  • Value of $500 – $750 = 2
  • Value of less than $500 = 1

4. Earning points

The sign-up bonus gives you an initial bounty of points or miles, but you’ll want a card that offers solid earning opportunities throughout the year. This may come in the form of a good earning rate on all purchases, or bonus points earned for purchases in certain categories. Here’s how I quantified earning potential:

  • Extensive bonus categories and/or high everyday earning = 3
  • Some bonus categories and/or decent everyday earning = 2
  • Few/no bonus categories and low everyday earning = 1

5. Other benefits

This final category is rather broad to include all manner of extra benefits that aren’t accounted for elsewhere. This includes items such as purchase protection, automatic elite status and annual free nights. I decided to include no foreign transaction fees within this group rather than as a separate item, since almost every card on my list waives those pesky fees. Here’s how I rated the extras on each card:

  • Many perks = 3
  • Some perks = 2
  • Limited perks = 1
Your Hilton HHonors Gold status includes free breakfast at luxurious properties (like the Hilton Bora Bora)
Many of these cards come with elite status that gives you benefits like bonus points and free upgrades.

In addition to including the popular hotel co-branded cards, I included some general cards that aren’t tied to a specific chain, but still offer a clear path to free stays. Since this analysis is geared mainly toward travelers who are new to the points and miles hobby, I also chose to leave off more premium cards with annual fees of over $100 (like the Citi Prestige Card and The Platinum Card from American Express). While these cards do carry a lot of benefits related to hotel stays (like the fourth night free benefit on the Prestige and the Fine Hotels & Resorts program from Amex), they generally don’t appeal to a neophyte just looking to get his or her feet wet!

The table below breaks down my ratings (with cards in alphabetical order):

Credit Card

Annual Fee

Value of Points

Sign-up Bonus

Earning Points

Other Benefits

TOTALS

BankAmericard Travel Rewards Credit Card

3

1

1

2

2

9

Chase Sapphire Preferred Card

1.5

3

3

3

3

13.5

Citi Hilton HHonors Reserve Card

1

1

2

2

3

9

Citi ThankYou Premier Card

1.5

2

3

3

2

11.5

Club Carlson Premier Rewards Visa Signature Card

1

1

1

2

2

7

Hyatt Credit Card

1.5

2

3

2

2

10.5

IHG Rewards Club Select Credit Card

2.5

1

1

2

3

9.5

Marriott Rewards Premier Credit Card

1

1

2

2

2

8

Starwood Preferred Guest Credit Card from American Express

1.5

3

2

2

2

10.5

Wyndham Rewards Visa Card

1

1

2

2

2

8

More importantly, here’s how the cards ranked according to my scoring system:

1. Chase Sapphire Preferred (13.5)
2. Citi ThankYou Premier (11.5)
3 (tie). Hyatt Visa and Starwood Preferred Guest Amex (10.5)
5. IHG Card (9.5)
6 (tie). BankAmericard and Citi Hilton Reserve (9)
8 (tie). Marriott Visa and Wydham Visa (8)
10. Club Carlson Visa (7)

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The Chase Sapphire Preferred is one of my favorite cards, so I wasn’t surprised to again see it at the top of the list.

Analysis

To be honest, this list wasn’t really shocking. For starters, I wasn’t surprised at all that Chase Sapphire Preferred came out on top (as it did in my two other starter card posts). This has been my go-to card for a number of years (and continues to be a TPG favorite, as well) for a variety of reasons, including the double points offered on travel and dining purchases and no foreign transaction fees. Opening the card and using it exclusively for just one year can open up some great redemption options.

Ultimate Rewards points are also among the most flexible and valuable loyalty currencies out there — TPG pegs them at 2.1 cents apiece for good reason. You can transfer them to a variety of loyalty programs (including Hyatt and Marriott) or redeem them directly for travel, earning points and/or miles plus elite status credit like you would on regular paid stays. You can even combine points from multiple household accounts to help you stockpile rewards more quickly.

Sapphire Preferred is usually near the top of my list of recommendations for friends and family (I actually just helped my sister apply for one earlier in the summer). It does come with a $95 annual fee, though it’s waived for the first year. While it takes a little time to learn the ins and outs of the program and redeem your Ultimate Rewards points for maximum value, once you’ve turned them into luxurious travel experiences like a free stay at the Park Hyatt New York, you’ll be hooked.

Ultimate Rewards points can be transferred to partners like Singapore Airlines to unlock valuable redemptions like the A380 First Class Suites.

The next three entries on the list also aren’t surprising to me, as each one of these cards offers some tremendous value. The Citi ThankYou Premier is currently offering a sign-up bonus of 50,000 ThankYou Points after making $3,000 in purchases within the first three months of account opening, and the program’s addition of transfer partners has given cardholders several new ways to redeem ThankYou points for maximum value (though sadly Hilton HHonors is still the only hotel option). As with the Sapphire Preferred, you can get a lot out of holding this card for just one year.

The SPG Amex is also a solid product, mainly because it earns such valuable points (TPG pegs Starpoints at 2.5 cents apiece — tops on his list). While these points can be transferred to 34 airlines (like the recently added Korean Air), they’re also incredibly valuable for hotel stays. I redeemed Starpoints at the St. Regis Bal Harbour last year and have an upcoming stay at the Equinox Resort in Southern Vermont over Columbus Day (review to come) when paid rates were $899 per night! This card also added some nice benefits last month, prompting TPG to finally use the card on an international hotel stay thanks to the new foreign transaction fee waiver. Finally, the card is also offering an increased sign-up bonus of 30,000 points after spending $3,000 in the first three months, so now is a particularly good time to apply. For more information, check out Richard Kerr’s post on redeeming Starpoints for maximum value.

I’m also a big fan of the Hyatt Credit Card, which tied the SPG Amex for third place. I love the card’s free night certificates that you can earn with the sign-up bonus, and the free night at a Category 1-4 property that comes each year just for holding the card. It also comes with automatic Hyatt Gold Passport Platinum status, and has some solid earning rates for Hyatt stays (3 points per dollar) and at restaurants, airlines and car rental agencies (2 points per dollar).

While several of the co-branded hotel cards come with annual free night certificates, some of them are limited to lower-tier properties. However, the IHG Rewards Card benefits in these rankings by offering an annual free night at any property, which is especially impressive since the card has a relatively low $49 annual fee.

Finally, I wasn’t surprised to see the Club Carlson Visa at the bottom of the list. This card took two big hits earlier in the year with the removal of the bonus award night benefit and then a huge devaluation due to category changes. It used to be a terrific candidate for keeping long-term, and even offered a compelling value proposition as a card for everyday spending. Now it’s just not that interesting.

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There are a variety of cards that can unlock free hotel stays at luxurious properties like the JW Marriott in Phuket, Thailand.

Final Thoughts

Diving headfirst into award travel can seem daunting, but if you’re reading this post, you’ve already taken the important first step of figuring out the best way to get started! This analysis is one way of identifying the best starter cards for free hotel stays, but it doesn’t paint the full picture:

  • You might be loyal to one hotel chain and prefer a co-branded card to take advantage of added benefits on both paid and award travel.
  • You might have a very specific redemption in mind, and would rather open a card to help achieve your goal.
  • You might get a targeted offer in the mail that gives you a better sign-up bonus than whatever is publicly available.
  • You might simply want cash back and prefer not to deal with the hassle of redeeming points (in which case you should check out Jason Steele’s post on the top cards for cash back and statement credits).

However, if you’re thinking about getting into the points and miles hobby and don’t know which card you should open first, then the analysis above will help you decide. You might value certain features more than others, so feel free to adjust the scoring system to suit your needs!

What card would you recommend to someone who is new to award travel and primarily interested in free hotel stays?

Chase Sapphire Preferred® Card

Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.

Apply Now
More Things to Know
  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR on Purchases
N/A
Regular APR
16.49% - 23.49% Variable
Annual Fee
Introductory Annual Fee of $0 the first year, then $95
Balance Transfer Fee
5.00%
Recommended Credit
Excellent Credit

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.