Tales & Trails of a Traveling Wiseguy

Another one of my credit cards posted its annual fee following account anniversary recently. This is a card I happen to have owned a long time, 7 years. That's longer than any other hotel/airline affinity card I currently own, and longer than all but one hotel/airline card I've ever owned in the past. As I've kept this card so long you might think I use it constantly and travel with the hotel/airline frequently. You'd think that... and you'd be wrong. 😂 This is a oddball little card that delivers value even when I barely use it.

Okay, enough mystery. The card I'm talking about is the Chase IHG One Rewards Select Credit Card. (Yes, that's a mouthful. It always is with marketingspeak.) I've now had this card for just over 7 years now. The annual fee is $49. Let's review if and how that's worth paying for another year, year 8.

This card pays a not-generous 5x points/dollar on IHG hotel spend; 2x on restaurant, gas, and grocery spend; and 1x on everything else. At a value of 0.6 cents per point* that's only 3% value on hotels and less than 2% on everything else. I already own two credit cards that pay 2%, cash, on everything... plus my spouse has a card that pays 3% on all travel. So using this card for spending is generally a losing proposition. 😧

Most of the benefits I derive from this card are not from charging on it. One big one is that every year I get a free-night award. In the past I've made these worth an average of $200 each. Over the past year IHG had devalued its award points again* so I figure the value of these awards at $150 now. Still, that's nothing to sneeze at; it pays just over 2:1 on the annual fee.

Another nice benefit I get from this card is a 10% rebate on award points redeemed. Some years that's a lot. For example, I earned back 12,000 this way in 2022 and 16,000 in 2023. This year I earned just 4,300. Still, this rebate has value. At the rate of $0.006 it's $25.

There are other benefits, too. Chase and IHG offered a few merchant credits throughout the year. I nabbed $15 of cash-back credits through those. I also get the benefit of IHG Platinum status by owning this card. Platinum isn't worth a heck of a lot with IHG; just earning extra points each stay plus the occasional upgrade. We only got one upgrade this year: a suite at an airport hotel in New Zealand. It was hardly a stunning upgrade, but still we appreciated having the extra space to stretch out in since we were there for 2 days while rain spoiled our outdoors plans. I figure the fringe benefits were worth another $50 this.

Adding these all together, the card delivered $240 of value in exchange for its $49 annual fee. And that's all value I got for charging less than $1,000 on it over 12 months. For the next 12 months I anticipate getting similar value... and quite possible more if I redeem a greater quantity of points in 2025.

Now, in the past I've canceled some cards when I forecast "only" a $200 net win. I'm choosing to keep this one, though. The reason is that I can't churn this card. Most other cards, I'd cancel long before this point and reapply (churn) to earn another signup bonus. But I can't do that with this card. It's not available anymore. So I'm going to hold onto it for the annual free night award and the fringe benefits relative to the low, $49 annual fee.

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[*] I mentioned devaluation a few times. Compared to my analysis a year ago I've reduced my figure for what IHG points are worth. Previously I valued them at 0.7 cents per point. Now I'm using a value of 0.6. Possibly I should use an even lower value such as 0.5. These figures are based on observing what rooms sell for on points versus what they sell for at cash rates— a comparison I check virtually every time I book a stay.