Chase credit cards: IHG versus Hyatt (and current rebate offer)

I've recently mentioned that I've lost interest in chasing credit card signup bonuses. These days, when I periodically reevaluate my miles and points strategy, I decide which cards I want to apply for based on their usefulness for manufactured spend (Chase Ink Plus), their ongoing benefits (Barclaycard US Airways), or both (US Bank Club Carlson Business Rewards).

Once I make up my mind, I naturally prefer higher signup bonuses over lower ones, but I won't typically apply for a card just for its signup bonus. A good illustration of why is the Chase British Airways 100,000 Avios signup bonus from last January. That was a uniquely high signup bonus, but I still have almost 53,000 of those Avios lingering in my British Airways account!

The card doesn't have any ongoing benefits (besides an incredibly expensive companion ticket) and is useless for manufactured spend (which is why I canceled it last month). Even worse in my mind, however, is that by applying for the card without a specific plan for the miles, I've allowed a significant chunk of them to sit in my account unredeemed.

In other words, worthless.

Chase's IHG and Hyatt co-branded credit cards both seem to have decent recurring benefits

Now that I've pared my total number of Chase cards by one, I've been considering two of Chase's co-branded hotel credit cards: IHG Rewards Club and Hyatt Gold Passport. While both are useless for manufactured spend, they both have recurring benefits that might make them worth holding onto:

• The IHG Rewards card offers an annual free night at any IHG property in the world;
• The Hyatt Gold Passport card offers an annual free night at any Category 1-4 Hyatt property.

Taken at face value, the IHG Rewards free night seems immeasurably more valuable than the Hyatt free night certificate.

Not so fast

The problem with the IHG Rewards night is that it can only be redeemed at IHG properties, and this creates a curious dilemma: while IHG has a good range of properties, from Holiday Inns to InterContinentals, their rewards program is a disaster. You can easily see this illustrated with one of my imputed redemption value charts:

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In other words, IHG is not a program it makes any sense to manufacture spend with, and it only very occasionally makes sense to transfer Ultimate Rewards points to IHG Rewards Club.

That leads to the problem I have with the IHG credit card annual free night: you have one free night at any IHG Rewards Club property in the world, but in order to get the most value out of that free night, you need to redeem it at an expensive property.

But expensive properties are also the most expensive places to manufacture free nights at!

That leaves you with two bad options: move after one or two nights in your aspirational property, or stay and pay thousands of dollars out-of-pocket or in foregone cash back.

Unsurprisingly, affiliate bloggers tend to resolve that problem in the following way: not only should you apply for IHG's co-branded credit card, you should also convince your significant other to apply for the card, so you can take advantage of the cards' overlapping annual free night awards to book up to 4 consecutive free nights (Frequent Miler ably demonstrates this sleight of hand here).

When you see a scheme that complicated attached to a pitch to sign up for a credit card, you should go ahead and assume you're being sold a bill of goods.

Hyatt's annual free night certificate is worth up to $187.50

Hyatt Gold Passport, on the other hand, has an eminently reasonable award chart:

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While it theoretically goes up to 30,000 points, in my experience the vast bulk of properties I've looked at are at the 8,000 point level. The Chase credit card's annual free night certificate can be redeemed for a night at a property up to Category 4, worth up to 15,000 Gold Passport points. Assuming those points are transferred from a premium Chase Ultimate Rewards account (Sapphire Preferred, Ink Bold, or Ink Plus), they're worth up to $187.50 in paid, mile-earning airfare.

A more reasonable value based on my own experience with Hyatt is 8,000 Gold Passport points, worth $100 in premium Ultimate Rewards point redemptions. Since the annual fee is just $75, this is a card that is likely to be worth hanging onto year after year. If you save just $80 (the cash redemption value) in Ultimate Rewards points, you're making a free-and-clear profit of $5 each year.

Hyatt's current award rebate sweetens the pot

For both current and new Hyatt Gold Passport cardholders, Hyatt will rebate 20% of all Gold Passport points redeemed through July 31, 2015, as long as they register their card for the promotion by March 31, 2015 (Frequent Miler has the details here). I've already made 40,000 points in award reservations during the promotional period, which would add up to an additional 8,000-point signup bonus in my case.

I'll agree it doesn't sound like much, but it is certainly icing on the cake.

Conclusion

Over the very long term, Chase's IHG Rewards Club and Hyatt Gold Passport co-branded credit cards both can offer a good value for their $49 and $75 annual fees, respectively.

But if you're the sort of person who would let the "anywhere in the world" IHG free night certificate trick you into booking an expensive stay at one of their properties, instead of one that's far cheaper using Hyatt, Club Carlson, or Hilton points, you may well decide you'd be better off staying away.

Personally, I find the Hyatt Gold Passport card far more convincing, and will be applying for it early next month.