If you travel for business or can afford to holiday often, then getting a credit card with hotel rewards may be a good option for you to consider.
How hotel credit cards work
There are many credit cards available from Australian banks that are linked with one of the major frequent flyer or bank reward programs, such as Qantas Frequent Flyer, Velocity Frequent Flyer, and Membership Rewards. These rewards programs allow you to redeem your points as hotel vouchers or hotel gift cards. You can then use these vouchers to cut the cost of your hotel stay, along with a wide variety of other travel rewards, retail products and many other services.
How and where you can redeem points for hotels depends on the rewards program.
- Membership Rewards. Choose to transfer points to a hotel rewards program or use them to pay for a booking with American Express Travel.
- Qantas Frequent Flyer. Use your points to book stays at chain or independently-owned hotels and serviced accommodation in cities big and small worldwide. Booking hotel stays can provide excellent value for your Qantas Points.
- Velocity Frequent Flyer. Velocity Points can be used to stay at hotels around the world, with hundreds of thousands to choose from.
How to compare credit cards that earn hotel points
Study all the features of a hotel credit card before applying to make sure that the package offers real value for money.
- Earn rate. You can get an idea for how many points would be required for a stay to get an idea of how much spend you'd need to put through a card for a night. Don't forget to consider any conversion rate if transferring to the hotel's own program.
- Sign up bonus. Depending on where you want to stay, triggering a large sign up bonus can be enough to cover part or all of a stay.
- Additional benefits. Check for perks such as concierge services, room upgrades, free entry to spa and gym facilities, restaurant discounts, airport lounge passes, and travel insurance.
- Annual fees. Most hotel credit cards feature a high annual fee, with the most prestigious platinum cards attracting a significantly larger fee than other cards. Make sure the annual fee is affordable and comes with extra perks you can use.
- Purchase interest rate. You should always aim to clear the balance on your account every month, but if you have an ongoing debt, it will start attracting interest. The purchase rate should be low enough so that if you carry over a balance to the next month, the interest doesn’t nullify the scheme’s benefits. Sometimes you can apply for a card with a promotional offer, such as 0% interest on purchases for a few months. Just make sure you know what the promotional rate will revert to – the deal may not be as good as you initially thought if it reverts to 20% or more.
- Terms and conditions. Most hotel rewards programs have extensive rules and regulations regarding how points are earned, redeemed and capped. For example, points may expire and your membership be terminated if you do not earn or redeem points for a certain period of time.