2018: A Credit Card Year in Review

Dec 22, 2018

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2018 has been a blockbuster year in the credit card world, with dozens of new cards being introduced and existing products getting major refreshes. With so many bright, shiny, valuable welcome offers constantly competing for our attention, it can be easy to forget just how busy of a year it’s been.

New years is just around the corner, and as we get ready to usher in 2019 let’s take a look back on the biggest credit card news of the last 12 months.

Capital One Takes an Early Lead

Capital One jumped out of the gate strong to start the year, with a high-powered bonus category that already feels like ancient news. Back in January, Capital One announced that holders of the Capital One Venture Rewards Credit Card would be able to earn 10x miles at hotels.com when booking at Hotels.com/venture and paying with their Venture cards through Jan. 31, 2020. This bonus category stacks with the Hotels.com Rewards program, which offers one free night after 10 paid nights, or effectively another 10% off.

This partnership felt very logical: The Venture card used to solely be a fixed-value/travel eraser card, best suited for travelers without loyalty to a single hotel chain. Hotels.com lets you jump from Marriotts to Hiltons to castles and igloos and back without sacrificing your rewards.

(Photo courtesy Lapland Hotel Snow Village)
Earn 10x miles when you book the Lapland Hotel Snow Village on Hotels.com with the Capital One Venture Card.

The Hilton Card That Pays for Itself

January also saw the launch of the midrange Hilton Honors American Express Ascend Card and the premium Hilton Honors American Express Aspire Card, as Amex assumed full ownership of the Hilton cobranded card portfolio from Citi. The Ascend was a slight update to the existing Amex Hilton Surpass card, but the Aspire has to be one of the most compelling premium credit cards on the market.

The trend with premium credit cards has become to balance staggeringly high annual fees with airline, travel and property credits. With most premium credit cards, after subtracting the annual credits from the annual fee, you’re still left with a bit of a deficit which comes out of your pocket. With the Hilton Aspire, it’s the opposite.

In exchange for your $450 annual fee (See Rates & Fees) you’ll get up to a $250 annual airline incidental credit, a $250 Hilton statement credit and a $100 statement credit on eligible stays of two nights or more at Conrad and Waldorf Astoria properties. That’s $600 in credits before you even begin to account for the current 150,000-point welcome offer (after spending $4,000 in the first three months), automatic top-tier Hilton Diamond status, weekend free night certificate (one when you open your card and another each year you renew) and a host of other perks. The Aspire card can more than pay for itself year after year, and if you’re loyal to Hilton it’s an easy pick over the Ascend.

Cobranded Airline Cards Get a Much-Needed Boost

The competition from transferable points cards and premium credit cards has really put a squeeze on what used to be card issuers’ bread and butter: middle-market airline and hotel cobranded cards. As snow melted and winter faded into spring, two of the most popular airline credit cards got benefits and bonus categories to make them more competitive.

First, it was the Citi / AAdvantage Platinum Select World Elite Mastercard adding 2x miles for purchases at restaurants and gas stations, and a $125 American Airlines flight discount after spending $20,000 in a card member year and renewing the card. The annual fee was raised from $95 to $99 (waived the first year) but the bonus categories easily make up for that. The information for the Citi AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.   

The changes to the (rebranded) United Explorer Card were a bit more mixed. While the card added 2x miles for purchases at dining and hotels, a Global Entry/TSA PreCheck application fee credit, and a 25% discount on inflight purchases, it reduced and discontinued trip cancellation coverage and price protection, respectively, and removed the ability to earn 10,000 bonus miles by spending $25,000 in a calendar year. That spending bonus was one of the best reasons to spend on a cobranded card, and it was disappointing to see it cut.

Meet The Newest Chase Ink Card

Since Chase launched the first Ink card back in 2009, its business card portfolio has undergone a decent amount of change. In May 2018, Chase launched the  Ink Business Unlimited Credit Card with a $500 sign-up bonus with a $3,000 spending requirement in the first 3 months.

This no-annual-fee product is an almost perfect copy of the wildly popular Chase Freedom Unlimited: it earns an unlimited 1.5% cashback on all purchases, but if you also hold a paid Chase card (like the Chase Sapphire Reserve, Chase Sapphire Preferred Card or the Ink Business Preferred Credit Card) you can convert those rewards into 1.5x Ultimate Rewards points per dollar spent. Based on TPG’s valuation of Ultimate Rewards at 2 cents each, this doubles your return from 1.5% to 3% and makes the $500 sign-up bonus worth $1,000 thanks to Chase’s great collection of airline and hotel transfer partners. It was interesting to see Chase bring its personal and business card offerings in line like this, and led us to speculate if the next addition to the Ink family might be a premium “Ink Reserve” type card.

All Good Things Must Come to an End

If something seems too good to be true… it usually is. Enjoy it while it lasts, but don’t expect it to stick around forever. One of the most overvalued perks was the unrestricted free night certificate that came with the old Chase IHG cards. In exchange for a surprisingly small annual fee of $49 a year, you could book a room at any hotel in the IHG portfolio, including top-tier properties like the InterContinental London and InterContinental Bora Bora, which can sell for $1,000 a night or more in peak season.

The new IHG Rewards Club Premier Credit Card free night certificate is capped at 40,000 points a night or less. There are plenty of high-end hotels you can still use it at, but with the annual fee nearly doubled to $89 and the free night capped, this card lost a lot of value for anyone who isn’t fiercely loyal to IHG. Chase initially planned to cap free night certificates from the old card issued after May 1, 2018 at 40,000 points as well, but after intense backlash from customers who had recently applied for the card or paid their annual fee, Chase backtracked. IHG Select card holders will enjoy one more uncapped free night certificate on their account anniversary, but after May 1, 2019, the free night will be capped at 40,000 points.

Chase’s Hyatt Card Gets Even Better

Hyatt’s loyalty program has always been one of the easiest for infrequent travelers to find value in. In June, Chase updated the World of Hyatt Credit Card with a better sign-up bonus, new bonus categories and more. New applicants can earn up to 60,000 Hyatt points (worth over $1,000). You’ll earn 40,000 points after spending $3,000 in the first 3 months, and another 20,000 points after spending $6,000 total in the first 6 months.

In addition to earning 4x points on Hyatt purchases, the card earns 2x on restaurants, airline tickets purchased directly from the airline, local transit and commuting and fitness clubs and gym memberships. For those chasing elite status, the card comes with complimentary Hyatt Discoverist status, 5 free elite-qualifying nights a year and the ability to earn two additional credits for every $5,000 spent on the card.

Cash Is King

Every time an airline devalues an award chart, restricts saver award availability or adds some kind of hurdle (such as fuel surcharges) to the redemption process, fixed-value cards look a little more attractive by comparison. Two new and improved options in this category hit the market over the summer:

  • The Capital One Savor Cash Rewards Credit Card offers an unlimited 4% back on dining and entertainment, 2% at grocery stores and 1% everywhere else. You can read our full review of the card here.
  • The no-annual-fee Wells Fargo Propel American Express® card earns 3x points on travel, dining, gas stations and popular streaming services, but there’s an exciting play on the redemption side. If you also have the Wells Fargo Visa Signature® Card, you can redeem your points for 1.5 cents each toward the cost of airfare, boosting your effective return on the 3x bonus categories to 4.5%.

The information for the Wells Fargo Visa Signature card and the Capital One Savor Cash Rewards Credit Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Summer Nights, Had Me a … Merger

After years of anticipation, the summer of 2018 was dominated by the Marriott/SPG merger. After we received ample reassurance that the award chart would be fair and our beloved airline transfer partners wouldn’t go away, all attention turned to the credit card offerings of the world’s largest hotel chain.

Let’s start with the bad: The Starwood Preferred Guest® Credit Card from American Express and the Starwood Preferred Guest® Business Credit Card from American Express, which had been one of the best options for non-bonus, everyday spending, saw their earning rate drop by a third. Instead of earning 3 Marriott points per dollar (1 SPG point), they now only earn two. Marriott is unique in that it’s one of the few hotels or airlines to have cards issued by more than one bank (Chase and Amex). The relaunch of these cards also saw a worrying development, as Chase and Amex worked together and shared data to restrict eligibility for the refreshed welcome offers on these cards.

On the flip side of the coin, Amex’s love of all things premium continued as it added another high-end card to its portfolio: the Starwood Preferred Guest® American Express Luxury Card. In addition to launching with a 125,000-point welcome bonus (the current welcome bonus is 75,000 bonus points), this card offers a very valuable annual free night certificate worth up to 50,000 points.

A Shade of Gold

The Amex Premier Rewards Gold Card had always felt a little out of place in the current credit card landscape, but a name change, upgraded bonus categories, a $120 a year dining credit and, of course, a limited-edition rose gold design, have helped it carve out a great niche for itself.

You can read our full review of the card here, but in addition to the up to $120 annual dining credit (which breaks down as $10 a month at the following merchants: Grubhub, Seamless, The Cheesecake Factory, Ruth’s Chris Steak House and participating Shake Shack locations) the biggest highlight is the 4x bonus categories at US restaurants and US supermarkets (up to $25,000 a year for the latter category; then 1x). This works out to an impressive 8% return based on TPG’s valuation of Membership Rewards points at 2 cents each.

The (gold) dust had barely settled before Amex announced a sweeping overhaul on the business side of things as well. The American Express® Business Gold Card offers a dynamic 4x opportunity. Each month, you’ll earn 4x points in the two categories from the following list where you spend the most:

  • Airfare purchased from airlines
  • US purchases for advertising in select media
  • US purchases for shipping
  • US purchases at gas stations
  • US purchases at restaurants
  • US purchases made from select technology providers

Businesses are sure to love that Amex is doing the work for them to maximize rewards, but many of us were disappointed that (in addition to hiking the annual fee to $295 a year; See Rates & Fees) Amex ditched the traditional points-based welcome bonus, opting instead to offer new applicants one free year of ZipRecruiter standard (for up to three users) and G Suite Basic.

Citi Loses Some of Its Prestige

Feeling the pressure from elevated bonus categories across the board, Citi announced some pretty major changes to the Citi Prestige Card that will take effect in 2019. First, the annual fee is increasing from $450 to $495 a year. The card will now earn 5x ThankYou points on dining and air travel and 3x on cruises, but the 4th Night Free benefit, perhaps the most valuable perk ever offered by a credit card, is being capped at two uses per year. The card will also lose its 25% bonus when booking air travel through the Citi travel portal. Clearly, Citi misunderstood exactly what was working about the Prestige before. 5x points is a phenomenal return, but Citi’s transfer options pale in comparison to Chase and Amex. While capping the 4th Night Free will save the issuer a boatload of money, I’d expect a lot of Prestige customers to ditch the card once these changes take effect.

 

The Year Of Capital One Continues

Capital One really put the bookends on this year, starting with a bang in January and somehow ending the year even stronger, announcing that beginning in December, miles earned on the Venture and Spark cards could be transferred to airline partners.

Here’s the full lineup of transfer partners as of publish time — they all have a 2:1.5 transfer ratio unless otherwise noted.

  • Aeromexico Club Premier
  • Air Canada Aeroplan
  • Air France-KLM Flying Blue
  • Alitalia MilleMiglia
  • Avianca LifeMiles
  • Cathay Pacific Asia Miles
  • Emirates Skywards (2:1)
  • Etihad Guest
  • EVA Infinity MileageLands
  • Finnair Plus
  • Hainan Fortune Wings Club
  • Qantas Frequent Flyer
  • Qatar Airways Privilege Club
  • Singapore KrisFlyer (2:1)

Since the Capital One Spark Miles for Business and Capital One Venture normally earn 2x miles per dollar (except for the 10x Hotels.com bonus category on the Venture when paying with your Venture card via Hotels.com Venture through Jan. 31, 2020), they essentially earn 1 to 1.5x partner airline miles per dollar now, which is a very compelling rate of return. The Venture Rewards Card is also retaining its fixed-value redemption option, giving you an added layer of flexibility when booking travel. The information for the Capital One Spark Miles for Business has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

The Most Expensive Platinum Card

Amex offers several versions of the popular Platinum Card® from American Express, and for a long time there wasn’t that much of a difference between them. The recently announced changes coming to the Business Platinum Card® from American Express in February 2019 are going to force you to think a little harder about which Platinum card is best for you and your business. In addition to a elevated $595 annual fee (See Rates & Fees), the Business Platinum is adding an up to $200 in annual statement credits for Dell technology purchases in the US.

Bottom Line

It’s crazy to think that all of these changes, both good and bad, happened in one year, and the action shows no sign of slowing down. As more and more people become interested in using points and miles to travel, credit card issuers will have to work even harder to compete for your business. And competition is always good for us as consumers, because it means bigger, more valuable offers to entice us. Here’s hoping 2019 is just as eventful and exciting!

For rates and fees of the Amex Business Platinum, please click here.
For rates and fees of the Hilton Aspire Card, please click here. 
For rates and fees of the Amex Business Gold Card, please click here.

Featured image via Shutterstock.

Editorial Disclaimer: Opinions expressed here are the 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.