What Card Should I Pay With When Dining at a Hotel?

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"Reader Questions" are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.

One of the best problems to have in the points world is trying to figure out which credit card bonus category will give you the most bang for your buck on a certain purchase. TPG reader John wants to know what card is best to use for hotel dining purchases:

[pullquote source="TPG READER JOHN "]TPG often recommends charging hotel dining purchases to your room to reap the bonus multiplier. But given the valuation of transferable points vs. hotel points, wouldn't the new Amex Gold Card be more rewarding in most cases? [/pullquote]

While it doesn't always make sense to spend on co-branded credit cards, one of the best reasons to do so is to rack up large bonus multipliers on hotel stays. John caught on to a very important point here: In most cases, charges at a restaurant or bar attached to a hotel will code as hotel purchases. I got drinks with a friend at the Shanghai EDITION the other week. Even though I wasn't staying at the hotel, I paid with my Starwood Preferred Guest® Business Credit Card from American Express and earned 6x points on the bill because it was a Starwood/Marriott purchase.

All the various flavors of SPG and Marriott credit cards now earn the same 6x points on SPG/Marriott purchases, so let's take a look at how they stack up against some of the most rewarding cards for general dining purchases. Obviously the math will be slightly different if you're staying at a Hilton or Hyatt, but you can check TPG's monthly valuation guide and plug in those numbers yourself.

You come out ahead almost every time by using a transferable points card like the American Express® Gold Card or Chase Sapphire Reserve over the co-branded Marriott cards. So why did I use my SPG card even though it's not the highest earning rate? I find Marriott points are harder to earn than Chase Ultimate Rewards points after the Marriott/SPG merger, so I was willing to sacrifice 0.6% off my return to help pad my points balance.

If you're a hotel elite and staying at the property you're dining at (as opposed to just popping in for drinks) you'll earn elite bonus points on your entire folio in addition to the points from the credit card spending. For Marriott that breaks down as follows:

• General members: 10x points per dollar
• Silver elites: 11x points per dollar
• Gold elites: 12.5x points per dollar
• Platinum elites: 15x points per dollar
• Platinum premier elites: 17.5x points per dollar

You'll earn these points regardless of what credit card you use to pay your bill at the end of your stay, but this is a great incentive to charge things to the room and end up with a larger folio at the end.

The 4x bonus category on the Amex Gold card is worth 2.6% more than the 6x bonus on the SPG Amex. But, by charging dinner and drinks to your room and getting the bill included in your final folio, you'll earn at least 10 more Marriott points per dollar, or an extra 8% based on TPG's valuations. You come out behind in the short term but you'll rake in a ton of bonus points when you go to check out.

Bottom Line

At the end of the day, this question isn't just about which card to use for the immediate purchase; it's about whether you should pay right away or charge your meal to your room and pay at check out. While you might miss out on a dining bonus category, you'll end up earning more points by having a larger folio when you check out. If you're not actually staying at the hotel you don't have this option and you should pick the card with the best dining bonus category, such as the new Amex Gold or the Chase Sapphire Reserve.

Thanks for the question, John, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.