Thursday, March 13, 2008

Diners Club, American Express or Hotel Corporate Affinity Credit Card?

Frequent travelers know that staying with your preferred hotel loyalty program is difficult at times. Hotels may be sold out, some chains are not present in an area (the nearest Starwood hotel to Monterey is 75 miles away while two Hyatts are within a few miles of my home), or the price is just too high.

Over the past ten years I have earned somewhere around 4,000,000 airline frequent flier miles and 1,000,000 hotel points. I seldom write about credit cards as a means of earning hotel frequent guest points. I have never owned an airline frequent flier affinity card.
Less than 2% of those 5 million miles and points were earned from credit card activity. I do not have the kind of money passing through my hands to make the credit card option a major factor. Travel is the fastest way to earn miles and points, unless you are wealthy or have a way to funnel money through your credit card without going into debt.

I have used Diners Club as a credit card, however, for its versatility with points exchange from Diners Club Rewards points to another airline or hotel currency. I have moved hundreds of thousands of miles and points through Diners Club by moving one airline currency into the program and exchanging the Diners Club Rewards points to a different airline currency. It used to be possible until about 2004 to move American and United miles into Diners Club and back out for the same number of British Airways miles during the periodic promotions for double miles when exchanging Diners Club points. Diners Club still has high value for exchangeability options not provided by American Express or Starwood or any other card at a good exchange rate between loyalty programs.

Here is a brief Loyalty Traveler analysis of the value of credit card diversity for your hotel travel options.

Consider 3 credit card options for the Marriott Rewards member:

1. Marriott Rewards Visa offer on website gives 20,000 bonus points for initial purchase, 2 points/$1 on travel/dining purchases, and 5 points/$1 for Marriott-brand hotel purchases, 1 points on other purchases, and a free night certificate each year. Points are good for Marriott awards only.

2. American Express Membership Rewards offers exchange options for Membership Rewards points into Hilton HHonors, InterContinental Priority Club, or Starwood Preferred Guest. Members can also buy nearly unlimited amounts of Membership Rewards points. Not too useful for Marriott, but has options for three other hotel chains.

3. Diners Club/MasterCard Club Rewards points can be exchanged into the major loyalty programs of Hyatt, Hilton, Marriott, Priority Club, Starwood, and Choice or Best Western.


Marriott VISA card earns 20,000 point bonus, 5 points/$1 at Marriott and 2 points/$1 for travel/dining purchases, and 1 points/$1 on other purchases.
After the first year card-owner bonus, assume the second year spending is $18,000 on stuff (18,000 points), $5,000 on travel/dining (10,000 points), and assume $2,000 spent at Marriott (10,000 points) = 38,000 points.

38,000 Marriott Rewards points for $25,000 credit card spending with Marriott VISA..

Purchase value of 38,000 Marriott Rewards points at $12.50/1,000 points = $475.00 value

The question:

Can you recoup anywhere near the $475 value available from $25,000 spending on a Marriott Rewards card by earning points primarily with a Diners Club or American Express credit card and exchange these points into hotel program points?


Exchange options is the name of the game for the frequent guest.

American Express exchange rates
1, 000 Amex Membership Rewards points = 333 Starpoints
1,000 Amex Membership Rewards points = 1,000 Priority Club points
1, 000 Amex Membership Rewards points = 1,300 HHonors points

Diners Club exchange rates
1,250 Club Rewards points = 750 Hyatt Gold Passport
1,250 Club Rewards points = 1,500 Marriott Rewards points
1,250 Club Rewards points = 2,000 Hilton HHonors points
1,250 Club Rewards points = 1,500 Priority Club points
1,250 Club Rewards points = 750 Starwood points

A comparison of credit cards based on a simple analysis: $25,000 annual spending (calculation is based on spending after first year, so 20,000 Marriott Rewards points bonus does not come into play in head-to-head matchup.)

Diners Club Rewards $25,000 spending = 25,000 points

Exchange 25,000 Club Rewards points for:

30,000 Marriott Rewards or
17,500 Hyatt points or
30,000 Priority Club points or
17,500 Starwood points or
40,000 Hilton HHonors points or

AMEX $25,000 spending = 25,000 Membership Rewards points
Exchange 25,000 Membership Rewards points for

8,325 Starpoints or
25,000 Priority Club points or
32,500 Hilton HHonors

Here are some potential values for hotel points from an exchange of $25,000 in Diners Club Rewards points:

30,000 Priority Club points is sufficient for any Crowne Plaza in the world and most InterContinental Hotels. Typically a $300 value.

It may be possible to book 6 nights of PointBreaks awards through Priority Club that could have a $1,200+ value at certain locations.

17,500 Starpoints can be obtained with 25,000 Club Rewards points. This is good for a 4-night stay, midweek at a Category 2 hotel. This can easily be a $700 savings.

Also, Starpoints can be used for Cash and Points awards. 4,000 points and $60 for a Category 4 hotel or 4,800 points + $90 for a Category 5 hotel can mean a savings of $800 on the regular cash rate for hotel rooms. Category 4 hotels are often $250/night and a Cash&Points award can typically save over $200/night on room rate and tax savings when using Starpoints. A Category 5 hotel award can likely be a $300/night savings. 17,500 points may allow you to save $1,000 on hotel rooms at Starwood.

The purchase value for 1,000 Starpoints = $35.00, so 17,500 Starpoints = $612.50 and this is more than the value of the Marriott Rewards points using the Marriott card for $25,000 in spending ($475.00).

Another factor to keep in mind is when you have to stay in a hotel without elite status. The ability to transfer Diners Club points into hotel programs, along with the ability to buy points from the hotel programs, may make room upgrades using hotel points a high-value alternative to the cost of paying for a better room category at a hotel where you will not be upgraded on elite status.

Flexibility with hotel loyalty points is a high value opportunity and Diners Club provides many hotel brand options for your travels. AMEX is good for the option of purchasing points, but has fewer hotel loyalty partners than Diners Club. Marriott VISA is a good earnings card, but while VISA may be accepted everywhere you want to be, a good-value Marriott may not always be where you want to be.

2 comments:

Boggs said...

Rick, what about Starwood Amex - I see a lot of people liking the card - how does it stand up against the bunch?

Ric Garrido said...

I also have the SPG AMEX card and it stacks up well for Starwood Hotels or for airline miles.

I actually included discussion of Starwood AMEX in this post, but removed it primarily because Starpoints are only good for Starwood hotels or airlines.

My primary blog point was to show that Diners Club allows a member who prefers one hotel program to open the option for earning points in several other hotel programs.

I think the Starwood AMEX card is great, particularly if Starwood is not your primary program. The points are easy to redeem for hotel rooms.

Transferring Starpoints into airline miles is a poor use of miles, in my opinion, unless it is specifically for a First or Business Class ticket.

One of my favorite features of Starwood Preferred Guest is the no minimum transfer for Starpoints to airline miles for a Platinum elite member. I have used this privilege several times to transfer between 10 and 100 Starpoints to an airline account to extend my airline program mileage or qualify for a promotion, but that has nothing to do with credit card activity.