Hotel Credit Cards with No Annual Fee: Hilton, Choice & More
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A crucial step in maximizing your points and miles is figuring out how much value you’re getting out of any given transaction. Annual fees are a direct hit to the value you can get out of a credit card, making cards with no annual fees attractive even though they typically offer more modest benefits. Today, TPG Contributor Nick Ewen analyzes several no-fee hotel cards to help you figure out which ones are worth carrying.
I used to abhor credit cards with annual fees; I simply didn’t understand why anyone would pay to carry a credit card, since there were so many free ones on the market. While I have since recognized the value of cards with annual fees, I know plenty of award travelers share my old sentiments.
Fortunately, you can still get plenty of value without paying an annual fee. Today, I’ll go through some fee-free hotel credit cards on the market to help you decide which ones should have a place in your wallet.
Hilton Honors Card from American Express
This was one of the very first credit cards I ever had, and it remains in my wallet almost ten years later. I think it’s one of the best no annual fee credit cards out there.
The sign-up bonus by itself is respectable for a card with no annual fee, as 40,000 points are worth $200 based on TPG’s October valuations (which list Hilton HHonors points at 0.5 cents apiece). The sign-up bonus can get you a free night in a Category 8 property during low season, or if you’re strategic, you could squeeze even more value out of it. For example, the Hilton Boston Back Bay drops to 40,000 points per night from December through March, and many dates in March have reward availability when standard rates are well over $200/night. Based on the rates for January 28-29, you could get up to 0.77 cents per point in redemption value:
The card also offers you some nice category bonuses (though they used to be better). At TPG’s valuation or 0.5 cents per point, you’re looking at a solid return of 3.5% when you use the card at Hilton properties, and 2.5% when you use the card at gas stations, grocery stores, and restaurants. Even the 1.5% return on all other purchases beats many of the top cash-back cards out there.
Another nice benefit of the card is being able to book reduced-rate AXON awards. These specifically apply to four-night stays in Category 5-10 properties, and can save you up to 20,000 points per night. Be careful when booking these stays, though, since the seasonal point requirements sometimes make AXON awards a poor value proposition. Still, it’s a nice option if you have an upcoming stay that is exactly four nights.
Finally, the included status provides some significant benefits as well. Earning Silver status in the Hilton HHonors program normally requires 4 stays or 10 nights, but you can enjoy the same benefits just for holding this card, including a 15% points bonus and the ability to get a fifth night free on standard room rewards. This last benefit is why everyone should have some type of Hilton credit card, as it can save you anywhere from 5,000 points to 95,000 points on a reward stay of 5 nights or more.
Upgraded card (with annual fee): Hilton Honors Surpass Card from American Express
This card comes with better status (Gold instead of Silver), a higher sign-up bonus (100,000 points after spending $3,000 in the first 3 months), and better earning rates (12 points/$ at Hilton properties, and 6 points/$ at gas stations, grocery stores, and restaurants). However, it also comes with a $75 annual fee.
Citi Hilton HHonors Visa Signature Card
Hilton HHonors also offers a fee-free Visa card issued by Citibank. Here are the benefits you get as a cardholder:
- 40,000 points after spending $1,000 in the first four months of cardmembership
- You can earn 6 points per dollar spent at Hilton properties worldwide, 3 points per dollar spent at gas stations, supermarkets, and drugstores, 2 points per dollar everywhere else
This card clearly falls into second place behind the fee-free American Express. The sign-up bonus is the same, but the Citi card requires you to spend an additional $250 to earn it. However, since you have an extra month to do so, it’s basically a wash, since both cards require you to pend an average of at least $250 per month. The earning rates also fall below the American Express version (with the exception of drugstore purchases, which earn you 3 points per dollar on both cards).
The Citi Hilton HHonors card gives you the same Silver elite status, though it does give you a fast-track to Gold status without requiring significant yearly spending. Unfortunately, this benefit is offered only in year one; after that you would need to requalify for Gold status the “hard” way (with 20 stays, 40 nights, or 75,000 points).
The one perk on this card that beats the Amex version is access to Visa Signature benefits. TPG reviewed these benefits in detail back in 2012: they include things like rental car coverage, access to Visa Signature Hotels, and travel accident insurance, among many others. Many Visa Signature cards have an annual fee, but this card allows you to access those benefits without one.
The bottom line is that this card is worth opening for two (or maybe three) reasons: the sign-up bonus and Visa Signature benefits, and the fast track to Gold status if you have enough Hilton stays planned during the year to make it useful. Beyond that, it just doesn’t make sense to use this card for day-to-day spending, especially when the Amex version offers the same or enhanced benefits.
Upgraded card (with annual fee): Citi Hilton Reserve
This card is one of my favorites out there right now, with a terrific sign-up bonus of 2 free weekend night certificates, a $100 statement credit after you spend $100 or more within the HHonors portfolio within the first four months of account opening, enhanced bonus categories (10 points/$ at Hilton properties and 5 points/$ on airline and car rental purchases), a solid anniversary bonus (another free weekend night certificate after spending $10,000 in a cardmembership year), no foreign transaction fees, and automatic Gold status. Of course, all of this does require a $95 annual fee.
Best Western Rewards MasterCard
Best Western is actually one of the largest chains in the world, with over 4,000 properties in 100+ countries worldwide. Their co-branded MasterCard includes the following benefits:
- Sign-up bonus of 16,000 points after your first purchase
- 5 points per dollar spent at Best Western properties
- 1 point per dollar everywhere else
- Automatic Gold status in the Best Western Rewards program, and earn an upgrade to Diamond status after spending $10,000 in a calendar year
Let’s start with the sign-up bonus. The program gives you many redemption options, including free nights, gift cards, airline miles, and merchandise. Since $25 gift cards are available from a variety of dining, retail, and travel providers at 6,000 – 6,500 points, each point is worth at least 0.4 cents. If you redeem for gift cards, your 16,000 point sign-up bonus is only worth $64.
However, the sign-up bonus can be worth considerably more when redeemed for free nights. Best Western Rewards has 8 hotel reward levels, with top tier properties going for 36,000 points/night. Those 16,000 points are good for two free nights at a Level 1 property (8,000 points per night) or a free night at a Level 2-3 property (12,000 – 16,000 points per night). Unfortunately, there isn’t a directory that identifies which hotels fall into which categories, so your best bet is to search for your desired location and dates and see what you can find.
For example, here’s a Level 2 property in Orlando with paid rates of $160.99/night:
This improves the redemption value to 1.3 cents/point. While paid rates may not be this high at all properties, using your points for hotel stays does offer a better return than the other options.
The other two benefits of the card are the 5 points/$ at Best Western properties and complimentary Gold status. Best Western Rewards has three tiers of status: Gold, Platinum, and Diamond. Unfortunately, none of them are very exciting, especially Gold, as the only benefit above regular members is “Exclusive elite only offers.” I do find it interesting that the card jumps you from Gold to top-tier Diamond after spending $10,000 in a calendar year; it’s the only card I know of to make such a jump.
Frankly, I would only recommend this card for travelers with at least a handful of Best Western stays per year, as the sign-up bonus and benefits aren’t good enough by themselves to earn a spot in your wallet.
Choice Privileges Visa
Another chain that doesn’t get much press is Choice Privileges, and their co-branded Visa card doesn’t come with an annual fee. Here are the key benefits on the card:
- Sign-up bonus of 8,000 points after your first purchase
- Earn 24,000 bonus points after your first paid stay with Choice Hotels in the U.S. (you must pay with the Choice Privileges Visa)
- 5 points per dollar spent at Choice Hotels
- 2 points per dollar everywhere else
- Automatic Elite Gold status
- Visa Signature benefits
Like Best Western Rewards, Choice Privileges offers a variety of redemption options. As a baseline, $50 gift cards are available at 16,000 points, meaning the sign-up bonus is worth at least $100 (0.3 cents per point). However, the points again go much further when redeemed for a free night. For example, a few summers ago I stayed at the GEM Hotel in SoHo for a friend’s wedding. This hotel costs 30,000 Choice Privileges points per night, while room rates can get over $300:
In this case, you would be getting 1.03 cents per point.
Another interesting redemption option is a Choice Privileges partner, the Preferred Hotels Group. This partnership allows you to book free nights at a variety of luxury hotels around the world, and 162 of the 527 properties only require 30,000 points per night. You’ll want to check availability with the specific property, but this could be a good way to redeem your sign-up bonus. Finally, Jason Steele wrote earlier this year about some great ways to redeem Choice Privileges points for rooms in Europe.
Unfortunately, the vast majority of the sign-up bonus is earned after a paid stay, and Elite Gold status doesn’t include many perks. As a result, this card is only a strong option for those with a planned Choice Hotels stay in the near future.
La Quinta Returns Visa
The final no annual fee card I’ll look at is offered by La Quinta Inns & Suites, with over 800 properties in the US, Mexico, and Canada. Here are the benefits it offers:
- Sign-up bonus of 20,000 points after your first purchase
- Earn an additional 20,000 bonus points after spending $10,000 in the first year of cardmembership
- 5 points per dollar spent at La Quinta properties
- 2 points per dollar spent on car rentals, gas, and dining
- 1 points per dollar everywhere else
- Automatic Gold Status in La Quinta Returns
For starters, La Quinta is not the hotel for you if you’re seeking luxurious properties and aspirational awards. Instead, they offer a consistent model with hotels across North and Central America, low rates, free breakfast, complimentary internet, and no pet fees (making them one of the few truly pet-friendly hotels). The 20,000 bonus points are good for three free nights in one of 29 Tier 1 properties (6,000 points per night) or two free nights in one of 201 Tier 2 properties (at 8,000 points per night). If you can spend $10,000 in the first year of cardmembership, you can double that bonus and open up even more redemption opportunities.
For example, let’s say you wanted to visit me and my wife in lovely Fort Pierce, FL. There’s a very solid La Quinta Inn & Suites right off the interstate, and paid rates can get up to $105 per night:
That’s a pretty solid redemption value of 1.31 cents per point, which makes the initial sign-up bonus worth $262.50, or $525 if you hit the $10,000 spending threshold in year one.
You also have other redemption options like gift cards ($25 for 7,500 points, or 0.33 cents/point), airline miles (best option is 2,000 US Airways miles for 10,000 points, or 0.38 cents/point), or various luxury resorts through their hotel partners. However, the best bang for your buck is through free hotel nights.
La Quinta Gold status is all right, with 20% bonus points on stays and two upgrade certificates per year, but it’s nothing to write home about. As a result, I would say that this card is a great option for you if you fit into one or both of these categories:
- You have at least one La Quinta stay per year
- You plan to spend $10,000 on the card in the first year
You can get a lot of value out of hotel credit cards with no annual fees, but it all depends on where you typically stay during a year and where you want to redeem your points. Hilton HHonors gives you access to a worldwide portfolio of both basic (Hampton) and luxurious (Conrad) properties, but if you typically travel domestically and just value a clean room at a good price, the offerings from La Quinta or Choice Hotels could be a better option.
Personally, I always recommend that travelers have at least one Hilton card (to access the 5th night free benefit), but at the end of the day, you have little to lose with any of these cards. You can always try them out, and if they’re not providing enough value, drop them for something better.
Any contenders I didn’t include? Please share your thoughts in the comments section below!
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