Hilton’s first Canadian credit card is solid, if a touch underwhelming

For years, Canadian travellers had just one co-branded hotel credit card. That has now changed. American Express has launched the Hilton Honors American Express Card, which comes with instant gold status, but its best perks are tied to heavy spending.

The card at a glance

It comes with an annual fee of $150 and a welcome bonus of up to 70,000 Hilton Honors points, plus a free night when you spend $3,000 in the first three months and another $500 in month 13.

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Card benefits

Card holders get Hilton Honors gold status, which includes a daily food and beverage credit or continental breakfast (depending on the property) and room upgrades, when available. Holders are upgraded to diamond status, provided you spend $40,000 in a calendar year. You also get 50,000 bonus points each year when you spend $12,000 in a calendar year.

The landscape

At $150 a year, the card will inevitably be compared with the Marriott Bonvoy American Express Card, which costs $120 and is the only other personal co-branded hotel card in Canada.

Hilton has a smaller global footprint than Marriott, so the immediate status offer is a big part of the card’s appeal. The food and beverage credit or breakfast that comes with gold status is something every traveller can use. With the Marriott Bonvoy card, you only get silver status, which gets you a late checkout request and not much else.

Spending $40,000 to reach diamond status may seem absurd. But this is one of the few credit cards that lets you spend your way to a top-tier status, and diamond adds executive lounge access, when available. Marriott’s card, by comparison, only gets you to gold status, and that requires $30,000 in spending.

The annual 50,000-point bonus withthe Hilton Honors card is likely to be more controversial. You can earn it every year, but only if you spend $12,000. Marriott’s card gives you a free night reward worth up to 35,000 points every year, no matter how much you spend.

That said, Hilton’s points are far more flexible. Marriott’s free night caps out at 60,000 points when you factor in the optional 25,000-point top-up, while Hilton’s 50,000 points can go toward any points booking. That means you could put them toward luxury properties such as the Waldorf Astoria or Conrad.

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Earning rates

The benefits aren’t bad, but they don’t make an obvious case for signing up immediately. That puts the focus on the earn rate. Cardholders earn six points per dollar at Hilton properties, four points per dollar on gas, groceries and dining in Canada and two points per dollar on all other eligible purchases.

The Marriott card earns five points per dollar at Marriott properties and two points on everything else.

It’s generally accepted that one Hilton Honors point is worth five cents, while a Marriott Bonvoy point is worth about 0.7 cents.

That means the earn rate favours Marriott on hotel stays and everyday spending: a 3.5-per-cent return compared with 3 per cent on hotel purchases, and 1.4 per cent compared with 1 per cent on base spending.

However, Hilton comes out ahead on gas, groceries and dining, where the return is 2 per cent compared with 1.4 per cent with the Marriott card. Since these are some of the biggest spending categories for Canadians, that’s where Hilton’s card delivers more value, even though its points are worth less.

It’s worth noting that Amex Membership Rewards points still transfer to Hilton Honors at a 1:1 ratio. Since Membership Rewards points are worth at least one cent each, that ratio feels outdated. Hopefully that changes now that Amex has a Hilton partnership in Canada.

Who should get the Hilton Honors American Express card?

Frequent travellers should consider the card, since good status with any hotel chain is always useful. But Marriott Bonvoy cardholders who aren’t loyal to either chain have no urgent reason to switch.

Everyone else should look at the welcome bonus. Up to 70,000 Hilton points plus a free night, which has no points cap on a standard room, is reason enough to try the card for at least a year before deciding whether Hilton and its points are a good fit.

Canadians finally have a Hilton credit card, and that’s good news. But between the steep spending thresholds for diamond status and the annual bonus, and the outdated membership rewards transfer ratio, many will have expected more from this launch.

Barry Choi is a personal finance and loyalty expert at moneywehave.com. He was previously affiliated with American Express and Marriott, but currently has no relationship with the brands mentioned.