|View at Lunch, Dubrovnik, Croatia|
We are bombarded daily with offers suggesting we apply for credit cards from different card issuers. The offers come in our mailboxes and email inboxes, unsolicited and without warning. It may seem flattering that somebody wants to grant you credit, but are these offered really right for you? And have you really been offered a credit card line of credit?
Credit card offers come from numerous sources. Some are generated from purchased email lists and some from past relationships you have had with banks, retail stores, or travel related companies. Some of them even suggest you have been pre-approved. That is not really the case.
As far as pre-approval, that is only half true. You may have seemed to be eligible to the offering firm at the time they generated the mailing list, but be assured they will check your credit again if you apply. Every time a credit card issues checks your credit, a hard inquiry is done and reported on your credit report. It can negatively affect your credit score 2-5 points and will remain on your credit report for two years. Don’t indiscriminately apply for offers you really don’t want.
I look for offers that provide:
- Clear and printed information on the terms and conditions of the offer. As a travel freak, I want to know up front how many miles or points I’m going to earn. If I can’t print the terms, I don’t believe the terms.
- I’m looking in particular for the size of the sign-up bonus and what I must do to earn it. If a card offers me 100,000 airline miles if I complete $10,000 of spending on the credit card in 30 days, I’m not going to take that offer. I’m not sure I can meet those terms and conditions in such a short time period. I am more apt to apply for cards that have bonuses awarded on “first purchase” or a more reasonable minimum spend with a reasonable time frame, say 90 or 120 days. Remember, you must be able to prove you met the sign-up bonus requirements if something goes wrong on the issuer’s end of the deal.
- I want to be absolutely sure the sign-up bonus is worth considerably more than the annual fee charged. A one-night free hotel stay doesn’t really excite me as a sign up-bonus, particularly if there is an annual fee for the card. That’s not much of an incentive in my mind. I typically look for a minimum value of $500 or more in sign-up bonus before I’ll apply for a credit card. I value airline miles at 1.5 to 2 cents each and hotel points at roughly 1 penny each, except Starwood Preferred Guest (SPG) credit card points, which I value at 2.5 cents each. It takes a sign-up offer of 25,000 airline miles or more before I consider the offer worthwhile.
When you consider applying for a credit card for travel points and miles, keep three priorities in mind:
- your credit is one of your most important assets
- each application negatively affects your credit score, and
- you want to get the biggest bang for your application.
If you are not paying off your card balances in full each and every month, applying for credit cards is not for you. The interest expense and possibility of late fees will eat up any potential gain in a hurry.
For the right individual, applying for credit cards for their sign-up bonuses can have its financial benefits, but you must be aware of the pitfalls as well. Discipline and a plan of attack are musts for success.
IHG® Rewards Club Select Credit Card
- Annual Fee: $49 fee waived for the first year
- Foreign Fees: No
- Card Type: Hotel
The IHG Rewards Club Visa is often cited as one of the most underrated hotel credit cards, with good reason. The official offer is for 70,000 points after $1,000 spent within three months, with the first year’s fee waived. The card comes with an annual free night certificate that can be used at any IHG property, including Intercontinental hotels - making this certificate worth upwards of 50,000 points. This is far more generous than some other hotel cards, which limit the categories in which free night certificates can be redeemed.
Cardholders earn 5 points per dollar at IHG hotels; 2 points per dollar at gas stations, grocery stores, and restaurants; 1 point per dollar everywhere else. Moreover, you’ll get a 10% rebate on award redemptions, up to 100,000 points per year. The card also comes with Platinum status, though that doesn’t get you much with IHG. Still, this is a fantastic card to have in your wallet, with benefits that far outweigh the already low $49 annual fee.
- Earn 70,000 bonus points after you spend $1,000 in the first 3 months of account opening
- Enjoy a free night of card membership at over 4,700 hotels worldwide
- Earn 5 points for each $1 spent at our hotels
- Earn 2 points per $1 spent on purchases at gas stations, grocery stores and restaurants
- Bonus points redeemable at hotels such as Intercontinental® Hotels & Resorts, Crowne Plaza® Hotels & Resorts and Holiday Inn®
- Automatic platinum elite status, as long as you remain a cardmember
- $0 introductory annual fee the first year, then $49