On Monday, Citi rolled out an elite version of its co-branded hotel rewards credit card called the Citi Hilton HHonors Reserve Visa Signature Card. The card offers stepped-up rewards earning power and an attractive sign-on bonus for heavy travelers.
Cardholders receive 10 rewards points for every $1 spent on stays at Hilton brands; five points for every $1 spent on airlines and car rental purchases; and three points spent on all other purchases.
New cardholders also receive two weekend nights at a Hilton hotel after spending $2,500 in the first four months. Cardholders get an annual one-weekend-night voucher if they spend $10,000 during the year.
Additional perks include gold status in Hilton's rewards program, making cardholders eligible for free wireless access, room upgrades, complimentary food and drinks along with bonus points opportunities. Cards also include EMV chip technology and no foreign transaction fees for easier overseas travel.
Of course, these extras come at a price: a $95 annual fee.
"This is not a card for the casual traveler," says Bill McCracken, CEO of Atlanta-based marketing research firm Synergistics Research.
Instead, it's meant for affluent and heavy travelers, often business travelers, who will earn enough in rewards every year to more than offset the annual fee. Citi, he said, is staying competitive with other issuers by offering this more upscale version of its co-branded card.
The issuer also amped up its select co-branded card with American Airlines in April, while Bank of America introduced a regular and elite generic travel rewards card in May. And in January, Chase rolled out a premier version of its Disney rewards card. However, these cards, which offer sexy sign-on bonuses, require high usage and big fees, which can be too much for regular traveling consumers, says McCracken.
He recommends everyday consumers to check out the less souped-up travel rewards cards, if that's what they need.
For example, Citi's regular version of the HHonors credit card offers six rewards points for every $1 spent at Hilton; three points on every $1 spent at supermarkets, drug stores and gas stations; and two points on every $1 spent elsewhere. There's even a 40,000-point bonus after spending $1,000 in the first four months -- all without an annual fee.
"For a consumer who is not an active traveler, it makes sense to earn points or miles on a card that doesn't have an annual fee," McCracken says.
Do you pay an annual fee for your rewards card? Why or why not?
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