IHG Rewards Card Earns its Keep
Oct. 24th, 2021 09:06 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
canyonwalkerRecently I completed another year of owning the Chase IHG Rewards Club card. I've had this particular account for 4 years now but it's actually my third such card. Altogether I've had some incarnation of this card in my wallet for most of the past 10+ years.
For me to own a credit card for 10 years, even if off-and-on, you'd expect it'd be a great bargain, something I'd make frequent use of. You'd be about half right. 😅 It is a bargain, even though I barely use it. Last year I charged nothing on it, and it still came out with a net value of $122. This year I charged a bit over $1,000 of purchases on it. Is it still worth it? Let's check the score.
I charged $1,150 to this card in the past 12 months and earned 5,730 points. That works out to almost 5 points per dollar charged. That's well higher than the card's ordinary rewards rate of 2 points per dollar spent on gas, grocery, and restaurant charges, and 1 per dollar on everything else. I got to 5x because Chase and IHG ran a promo for 3 months offering a total reward of 5x on all charges. I shifted my eligible spend to this card for those months to hit the bonus then shifted it back to cards that pay better.
In addition to this 10% rebate on points redeemed the card also pays a free night certificate each year at renewal time. I've been able to make these certs worth $150 each. That's the other reason I keep this card even though it charges an annual fee of $49. The cert alone is worth 3x the cost.
Okay, so let's net it out. The benefits are $137.76 + $150. The costs are $49 for the annual fee plus $23 opportunity cost— the value of cash back I could otherwise have earned charging the same purchases to a 2% cash back, no fee credit card. The benefits minus the cost yield a net value of $215.76. That's better than last year's net by almost $100. I'll keep this card at least another year.
In the past I turbocharged the number of points I earned from credit cards by churning them: opening new cards frequently to earn their big signup bonuses, then canceling them after a year or two to lather, rinse, repeat. A few things have changed since then. For one, the rules of the game have changed. The banks wised up to how churners play the game— BTW I was far from the big players at churning— and tightened restrictions on eligibility for signup bonuses. I do still churn, but much slower than before.
Two, this particular card isn't offered anymore! Chase and IHG now offer a different card. It's at bit more up-market, with slightly richer benefits and a higher annual fee. Those of us with the old card are able to keep it; they're not closing down accounts or converting them.
I signed up for the new card, too. That's totally allowed, and the benefits stack nicely with this old card. And since the new card is still open for new accounts and offers lucrative signup bonuses, I'm going to churn it when it comes up for renewal soon.
For me to own a credit card for 10 years, even if off-and-on, you'd expect it'd be a great bargain, something I'd make frequent use of. You'd be about half right. 😅 It is a bargain, even though I barely use it. Last year I charged nothing on it, and it still came out with a net value of $122. This year I charged a bit over $1,000 of purchases on it. Is it still worth it? Let's check the score.
I charged $1,150 to this card in the past 12 months and earned 5,730 points. That works out to almost 5 points per dollar charged. That's well higher than the card's ordinary rewards rate of 2 points per dollar spent on gas, grocery, and restaurant charges, and 1 per dollar on everything else. I got to 5x because Chase and IHG ran a promo for 3 months offering a total reward of 5x on all charges. I shifted my eligible spend to this card for those months to hit the bonus then shifted it back to cards that pay better. Points, More Points, and a Free Night
Those 5,730 points aren't all I earned, though. I piled on almost 14,000 more points in rebates for points I spend on award nights staying at IHG hotels. That's one big reason I've kept this card all these years— it pays a 10% rebate on points spent. As long as I have points to spend on award nights, this card stretched them further. I value IHG points at 0.7 cents apiece, so the 19,680 I earned in total are worth $137.76.In addition to this 10% rebate on points redeemed the card also pays a free night certificate each year at renewal time. I've been able to make these certs worth $150 each. That's the other reason I keep this card even though it charges an annual fee of $49. The cert alone is worth 3x the cost.
Okay, so let's net it out. The benefits are $137.76 + $150. The costs are $49 for the annual fee plus $23 opportunity cost— the value of cash back I could otherwise have earned charging the same purchases to a 2% cash back, no fee credit card. The benefits minus the cost yield a net value of $215.76. That's better than last year's net by almost $100. I'll keep this card at least another year.
Footnote: Churning, but not Here
"Wait a minute," you might think. "You're not churning?"In the past I turbocharged the number of points I earned from credit cards by churning them: opening new cards frequently to earn their big signup bonuses, then canceling them after a year or two to lather, rinse, repeat. A few things have changed since then. For one, the rules of the game have changed. The banks wised up to how churners play the game— BTW I was far from the big players at churning— and tightened restrictions on eligibility for signup bonuses. I do still churn, but much slower than before.
Two, this particular card isn't offered anymore! Chase and IHG now offer a different card. It's at bit more up-market, with slightly richer benefits and a higher annual fee. Those of us with the old card are able to keep it; they're not closing down accounts or converting them.
I signed up for the new card, too. That's totally allowed, and the benefits stack nicely with this old card. And since the new card is still open for new accounts and offers lucrative signup bonuses, I'm going to churn it when it comes up for renewal soon.
