Gotta Change the Subject: Hilton Award Level Changes

I’ve just got to stop reading. Regarding the new TSA rules and airport security: "All the sensible voices in the world will fall on the deaf ears of the powers at the top." Thus, on to a different topic.

Many observers of the world of reward credit cards, hotel points, and frequent flyer miles have bemoaned the new “grade inflation” of Hilton hotel’s properties. Basically, Hilton has raised the Category level of many properties, thus “costing” more HHonors points for reward stays.

We’ve frequently mentioned that using a Hilton American Express credit card to accrue HHonors points is – for us – one of the best value propositions available. Previously, we had generally valued spending on the Hilton Amex as a 5% reward, compared to a 2% reward for some cash-back-equivalent credit cards (Schwab) or if you use your credit-card-derived frequent flyer miles wisely.

Yes, the Hilton category revisions bump many properties to a higher redemption level. But we recently searched for some reward stays, and we’re still valuing our Hilton Amex spending at 3-4%. Too many commentators talk about the value of the points themselves – and maybe the actual Hilton points do have less “value” than Starwood or other points. And this may be accurate if you’re accruing points primarily from hotel stays.

But for credit-card points/miles accumulation, we still believe that Hilton offers one of the best value propositions. The once-3% Chase Freedom Visa (now only for a few categories of spending) has been emasculated; to get the equivalent of 2% with most airline cards usually entails an annual fee; and many of the 2% cash-back cards (such as Schwab) are quietly disappearing.

Do your own math, but look at the points required for a Hilton room, versus the cost of the room, and then consider your spending. We use the Hilton Amex only for spending that garners 6 points per dollar spent (currently for gas, groceries, phone, internet, drug stores, cable & satellite TV, and at Hilton hotels; 3 points other spending), and we still feel our actual reward return with those 6 points per dollar is at least 3%.