American Express to become exclusive issuer of Hilton branded cards
Hilton is one one of a few hotel and airline companies that have agreements with multiple banks for affinity credit cards. Currently, both American Express and Citibank issue Hilton-branded cards, but that will soon change. Hilton announced this week that it would enter into an exclusive agreement Amex.
“American Express Co. has struck back against Citigroup Inc., winning exclusive rights to issue credit cards for Hilton Worldwide Holdings Inc. and ending an agreement in which the two banks shared the business.
The arrangement takes effect Jan. 1, Hilton said Thursday in a statement that didn’t disclose terms.”
This is a big win for Amex which, in recent years, has lost agreements with Costco and JetBlue. While Citibank lamented the loss of its long partnership with Hilton, the hit is relatively minor given its other relationships:
““For over 15 years, Citi and Hilton enjoyed a terrific co-brand credit card partnership, however during negotiations it became clear that terms of exclusivity, given the relatively small size of the portfolio, were not economically viable,” Jud Linville, CEO of Citigroup’s global cards business, said in a phone interview.
Citigroup intends to focus on “core” co-brand partners including Costco, American Airlines Group Inc. and AT&T Inc., he said.”
Going forward, it appears that Citi will shrink its co-branded travel card offerings to just those with American Airlines, a relationship which it shares with Barclays. Citi remains competitive with its suite of ThankYou® Points card including the Citi Prestige® Card and the Citi ThankYou® Premier Card.
I have Hilton cards from both Citi and Amex
I currently have both an American Express and Citibank Hilton card, and, while I rarely use either, I get more value from the Citi® Hilton Honors™ Reserve Card. Though the card offers 10x Hilton Honors points for purchases at Hilton portfolio properties, 5x points on airline and car rental spend, and 3x points on other transactions, I get more value using my Citi ThankYou® Premier Card and its 3x ThankYou points for hotel purchases. I could also earn a free weekend night certificate each year if I spent $10,000 annually on the card, but I feel that spend of that level is better rewarded by other cards. What I really do value in this card is the included Hilton Honors Gold status. Because I typically stay at Hilton portfolio properties more often than other chains, I use the elite status and benefits throughout the year.
I also have the Hilton Honors™ Card from American Express. I signed up for this card due to its attractive signup bonus for a card that has no annual fee. Its spend bonus at Hilton properties is not as generous as the Citi card - only 7x - nor does it provide Gold status. I keep this card because it lacks an annual fee and its unused credit line bolsters my credit score. Given that my primary reason for holding the Citi Reserve card is Gold status, the American Express offering is not a suitable replacement.
How will this impact my credit card portfolio?
Because I would like to keep Hilton Honors Gold status, I will have to evaluate what credit cards I hold in 2018. In addition to the Citi® Hilton Honors™ Reserve Card, I currently have Gold status via my Business Platinum Card® from American Express OPEN. However, due to that card's $450 annual fee and the otherwise limited value I get from it having earned the signup bonus, I may not renew in December. That leaves me with nothing better than Hilton Honors Silver based on my stay activity.
Amex does offer a card similar to the Citi® Hilton Honors™ Reserve Card - the Hilton Honors™ Surpass® Card from American Express which offers Gold. I could simply upgrade my standard Amex Hilton card to the Surpass version in order to retain status. Unfortunately, an upgrade would prevent me from earning the current signup bonus of 75,000 Hilton Honors points after spending $3,000 in the first three months of card membership. The card recently even offered 100,000 points as a signup bonus. However, this may not be the best time to signup for a new Amex Hilton product if the new exclusive offerings have additional benefits:
““We’re not announcing any new benefits at this time, but I think Hilton Honors members can look forward to new cardmember benefits,” said Denise Pickett, president of U.S. consumer services at American Express.”
Regardless of any changes, to be eligible for a signup bonus I would have to submit a new application for the card and that is a big point of hesitation for me.
I am currently on the cusp of becoming eligible again for a new Chase card since I will soon no longer be subject to Chase's 5/24 rule. I had to miss the lucrative launch of the Chase Sapphire Reserve card with its 100,000 Chase Ultimate Rewards Points signup bonus. While I do not expect that offer to be repeated, I am hoping that Chase will sweeten the current 50,000 point offer. If they do, I want to be eligible for the card. Hence, I do not want to add another card application to my credit report until I can apply for the Sapphire Reserve.
Conclusion
With the Citi® Hilton Honors™ Reserve Card going away in the coming months, I will have decisions to make in my personal credit card collection if I want to maintain that card's included Hilton Honors Gold status. Since the Chase Sapphire Reserve card is so attractive and I do not want to extend my ineligibility for the card under the Chase 5/24 rule by applying for a new card, I may ultimately have to renew my Amex Business Platinum for one more year. But that raises the question of whether Hilton status is worth the Platinum card's annual fee? A second option would be to switch my limited service hotel business to IHG where i have Platinum status via the Chase IHG Rewards Club Select Card. Of course, I could just live with Silver until I can get a new card that carries Gold status. Silver was fine for years before I got involved with points and miles collecting. Fortunately, I have approximately six months to decide on my next step. I look forward to seeing how the Amex-Hilton exclusive relationship develops along with evaluating future card offerings.