Reward card sign-up bonuses not all created equal

A hotel card's 100,000 points often worth less than other card bonuses

Tony Mecia
Personal Finance Writer
Rewards expert who writes the "Cashing In" reader Q&A column for CreditCards.com

Big hotel card sign-up bonuses turn heads, but do the math

The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of card offers.

If you’re a fan of receiving big bonuses of reward points, chances are you’ve noticed some of the generous offers lately on hotel credit cards. Before you race to sign up for a hotel credit card, though, make sure you understand how hotel points systems work: The offers might be less lucrative than they appear. 

Currently, hotel cards are offering some of the biggest caches of points out there:

Those are big hauls of points. Typically with reward cards, you’ll see sign-up bonuses of around 50,000 points. Occasionally, bonuses will hit 100,000. Seeing multiple offers of more than 100,000 points is unusual. 

However, keep in mind that all points are not created equal. Each rewards program – those run by banks, airlines, hotels and so on – essentially has its own currency. You earn points or miles for certain activities, including charging money on a credit card, and you redeem those miles or points for other activities, such as cash back, flights or hotel stays. 

Compare the value of hotel points at various properties

Getting excited about 100,000 points or more might not be justified if you’re not getting a great value for those points. Let’s look more closely at how you might use 125,000 Hilton points from that card offer. 

Hilton does not have a set award chart, but rather tells you on a case-by-case basis how many points are required based on room availability and other factors. 

Let’s say you’re going to New Orleans for a night in early December. Looking on Hilton’s website, you see 25 different options. The most expensive is The Roosevelt, a luxury hotel near the French Quarter, which goes for $212 a night or 56,000 points. The least expensive is the Hampton Inn in Covington, an hour north of New Orleans, which goes for $90 a night or 19,000 points. 

If you redeemed your 125,000 points at The Roosevelt, they would be worth $473. If you redeemed your 125,000 points at the Hampton Inn in Covington, they would be worth $592. 

That’s not bad: Either way, you’re receiving hundreds of dollars in value from the card in the form of a couple nights at a fancy hotel or six nights at a suburban Hampton Inn. 

Calculate points value for a big sign-up bonus

But don’t think that 125,000 points in the Hilton program are as valuable as 125,000 points in other programs. 

If you had 125,000 airline miles, that’s generally worth five domestic coach round-trips or two coach round-trips to Europe, which could be worth $2,000 or more. If you had 125,000 Chase points and a Chase Sapphire Reserve card, you could redeem those Chase points for travel worth $1,875. 

The bottom line: Don’t be wowed by large numbers of reward points. Before signing up for any reward card, check out the program and ensure you understand how points are earned and spent. In the case of hotel cards, reward currencies are often worth less than those of other programs. 

See related: Maximizing card rewards after you’ve earned the sign-up bonus, Hotel credit card reviewsHow to get free stays and perks faster with hotel rewards, 5 ways hotel cards add up to big savings


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Updated: 12-15-2017