Link: creditcards.chase.com/credit-cards/ihg-credit-card.aspx

This is an interesting card. I got this card because I stay at Holiday Inn a lot. I like Holiday Inn. If you stay at Holiday Inn quite a bit (or even once a year), this is a card to get.

The rewards system goes by points and it is tied to the IHG Rewards Club program. You don’t need the Chase card to join the program, but this Chase card can help you rack up points pretty quick.

At the time of this writing, the credit card has the following features:

- Upon approval, you get 60,000 points if you spend $1,000 in the first 3 months,
- The annual fee for the first year is waived. Afterwards, it is $49 per year.
- Upon approval, you get one free night.
- Every year you get a free night.
- You get Platinum status in the IHG Reward Club program
- 5 points per dollar spent at IHG hotels.
- 2 points per dollar spent at gas stations, groceries, and restaurants.
- 1 point per dollar for everything else.
- You get 10% bonus points for points redeemed.
- You get a $50 statement credit if you apply for the credit card through the IHG web site.

As an IHG Reward Club member, you get 10 points per dollar spent for the room rate (not including taxes and fees) at Holiday Inn. As a Platinum member you get 50% bonus points, so basically a Platinum is getting a total of 15 points per dollar spent for a room.

Note that just a free night every year with an annual fee of $49 is a good reason to get the card if you’re going to stay at Holiday Inn one night a year.

The following calculations assume that are a Chase IHG credit card member. So let’s go straight to the guts of the points system…

**Earning points by staying at Holiday Inn**

The objective is to get the most nights for a certain amount of money.

So let’s say you have a budget of $10,000 for hotel stays. If you stay at Bonita Springs at $119.87 per night and earn 6935 points per night, you would spend for 83.42 nights and you would earn 578,532 points. The next step is tricky. At redemption rate of 15,000 points per night, you would get 38.569 bonus nights, but you also get 10% bonus points for points redeemed. So you would get 57,854 bonus points. That amounts to 3.86 more bonus nights for a total of 42.43 bonus nights. Let’s go one more step with the 10% bonus, when redeeming points for 3.86 nights, you get 5,790 more bonus points, and that amounts to 0.386 additional nights for a total of 42.82 nights. You can keep doing the 10% step but to save you the math, the total nights is 42.85 bonus nights. So for $10,000, you can stay a total of 126.27 nights (83.42 + 42.85 = 126.27) at a rate of $79.19 per night ($10,000/126.27 nights = $79.19 per night).

If you redeem using the 10,000 points plus $40 option, (doing quite a bit of algebra) you spend for 66.36 nights and get 51.13 bonus nights for a total of 117.49 nights. (66.36 paid nights x 6935 points per night = 460,206 earned points. At a redemption rate of 10,000 points per night, 460,206 points/10,000 points per night = 46.02 bonus nights plus 46,020 bonus points. 46,020 points/10,000 = 4.60 bonus nights plus 4602 bonus points. 4,602/10,000 = 0.46 bonus nights plus 460 bonus points. Etc,etc,etc. Total bonus nights = 46.02+4.60+0.46+0.05= 51.13 bonus nights. 66.36 paid nights x $119.87 per night + 51.13 bonus nights x $40 = $10,000). You’re practically paying $85.11 per night.

If you redeem using the 5,000 points plus $70 option, you spend for 43.91 nights and receive 67.67 bonus nights for a total of 111.58 nights. You would practically be paying $89.63 per night.

It doesn’t matter whether you’re spending $10,000, $1,000,000, or $200 for hotel stays, the practical rate is the same.

The following chart is an example of staying at Buena Park, CA Holiday Inn with a hotel budget $10,000.

Location: | Buena Park, CA | ||||

Room Rate: | $119 | ||||

Bonus Points: | 5000 points for $10 | ||||

Total Cost plus tax: | $144.53 | ||||

Est. Points Earned: | 7430 | ||||

Budget: | $10,000 | ||||

Redemption Options: | Paid Nights: | Bonus Nights: | Total Nights: | Practical Room Rate: | Discount: |

35000 | 69.19 | 16.32 | 85.51 | $116.95 | 19.09% |

30000+$40 | 64.29 | 17.69 | 81.99 | $121.97 | 15.61% |

25000+$70 | 59.65 | 19.70 | 79.35 | $126.03 | 12.80% |

30000 | 69.19 | 19.04 | 88.23 | $113.34 | 21.58% |

25000+$40 | 63.40 | 20.93 | 84.33 | $118.58 | 17.95% |

20000+$70 | 57.66 | 23.80 | 81.46 | $122.75 | 15.07% |

25,000 | 69.19 | 22.85 | 92.04 | $108.65 | 24.82% |

20,000+$40 | 62.10 | 25.63 | 87.73 | $113.99 | 21.13% |

15,000+$70 | 54.63 | 30.07 | 84.69 | $118.07 | 18.31% |

20,000 | 69.19 | 28.56 | 97.75 | $102.30 | 29.22% |

15,000+$40 | 60.04 | 33.05 | 93.09 | $107.42 | 25.67% |

10,000+$70 | 49.43 | 40.80 | 90.23 | $110.83 | 23.32% |

15,000 | 69.19 | 38.08 | 107.27 | $93.22 | 35.50% |

10,000+$40 | 56.32 | 46.50 | 102.82 | $97.26 | 32.71% |

5,000+$70 | 38.45 | 63.48 | 101.92 | $98.11 | 32.12% |

Let’s understand the chart. Let’s say a person spent $10,000 spending at a room rate of $144.53 per night with 5,000 bonus points per night. The person then redeems the earned points at a redemption rate of, let’s say, 20,000 points plus $40 per night. Once the person has exhausted the $10,000 budget and all the earned points, he would have spent for 62.10 nights and received 25.63 bonus nights for a total of 87.73 nights. For $10,000, the person stayed 87.73 nights at a rate of $113.99 per night which is a 21.13% per discount from the original cost of the room.

According to the chart, the best practical room rate is $93.22 per night at discount of 35.50%. The person would need to redeem all his points using the 15,000 points per night option. He would get a total of 107.27 nights. The worst redemption option is the 25,000 plus $70 with a rate of $113.34 per night at a discount of 12.80%. He would get a total of 88.23 nights. The difference between the best and worst option is about 19 nights. That is a lot of nights.

As you might have guessed, the best redemption options are the bottom three, the best being the straight 15,000 points per night option.

Let’s compare between a room rate with 5,000 points, AAA rate, and the cheapest room rate at Palm Desert, CA

Location: | Palm Desert, CA | ||

5000 pt option | AAA rate | Cheapest rate | |

Total points earned: | 7075 | 1920 | 1560 |

Total Coast plus taxes: | $128.79 | $107.51 | $89.59 |

Redemption Options: | Practical Rate | Practical Rate | Practical Rate |

35000 | $105.17 | $101.33 | $85.26 |

30000+$40 | $110.35 | $103.03 | $86.81 |

25000+$70 | $114.73 | $104.56 | $88.29 |

30000 | $102.05 | $100.37 | $84.58 |

25000+$40 | $107.55 | $102.20 | $86.30 |

20000+$70 | $112.20 | $103.89 | $87.99 |

25,000 | $97.98 | $99.06 | $83.64 |

20,000+$40 | $103.74 | $101.00 | $85.54 |

15,000+$70 | $108.57 | $102.84 | $87.51 |

20,000 | $92.45 | $97.15 | $82.28 |

15,000+$40 | $98.26 | $99.10 | $84.33 |

10,000+$70 | $102.91 | $100.91 | $86.63 |

15,000 | $84.50 | $94.12 | $80.10 |

10,000+$40 | $89.71 | $95.64 | $82.10 |

5,000+$70 | $92.86 | $96.29 | $84.45 |

This chart shows that you’re better off getting the cheapest room rate.

As an exercise, let’s says you want accrue 35,000 points using the 5000 bonus points option and then redeem the 35000 points for a night somewhere. Let’s first try by staying at a 5,000 bonus point room. At Palm Desert at 7075 points per night, you need to stay about 4.94 nights, so you’re going to spend $128.79 x 4.94 = $637.12 to get 35,000 points. With the 35,000 points, you get one bonus night, so you’re spending $637.12 for 5.94 nights at a rate of about $106.19 per nights. (I am not taking into account the 10% bonus points for each redemption.)

Let’s say you want to stay at Miami Beach for 35,000 points. The cheapest rate for the same room is $178.99. By spending the 5000 bonus point room rate, you’re spending $637.12 to spend 4.94 nights at Palm Desert and one night at Miami Beach.

Now, let’s go for the cheapest room rate. 4.94 nights at Palm Desert at the cheap rate of $89.59 per night costs $442.57. Spend $178.99 for one night at Miami Beach, and your total cost is $621.56. You’re better off getting the cheapest room rate for both hotels. Not only are you saving money going from the cheapest room rate, but you’d still have the points from the night stays at Palm Desert and Miami Beach (about 10,874 points), where as you would have 10% bonus points (3,500 points) from the redemption from the night stay at Miami Beach using the 5,000 bonus points route.

Before you think the cheapest room rate is the way to go, check out the room rates at Buena Park.

Location: | Buena Park CA | ||

5000 pt option | AAA rate | Cheapest rate | |

Total points earned: | 7430 | 2280 | 2160 |

Total Coast plus taxes: | $144.53 | $127.73 | $121.01 |

Redemption Options: | Practical Rate | Practical Rate | Practical Rate |

35000 | $116.95 | $119.11 | $113.24 |

30000+$40 | $121.97 | $120.90 | $115.01 |

25000+$70 | $126.03 | $122.42 | $116.54 |

30000 | $113.34 | $117.78 | $112.05 |

25000+$40 | $118.58 | $119.66 | $113.91 |

20000+$70 | $122.75 | $121.24 | $115.54 |

25,000 | $108.65 | $115.98 | $110.41 |

20,000+$40 | $113.99 | $117.87 | $112.33 |

15,000+$70 | $118.07 | $119.39 | $113.97 |

20,000 | $102.30 | $113.37 | $108.04 |

15,000+$40 | $107.42 | $115.05 | $109.84 |

10,000+$70 | $110.83 | $116.06 | $111.14 |

15,000 | $93.22 | $109.27 | $104.32 |

10,000+$40 | $97.26 | $110.00 | $105.33 |

5,000+$70 | $98.11 | $108.32 | $104.47 |

This chart shows that the best room rate depends on what redemption rate you normally do. If you always redeem in the bottom six options, the 5000 bonus point room rate is the way to go. Except for 25,000 points, if you redeem using the upper 8 options, the cheapest room rate is the way to go. The AAA rate is never the way to go because the cheapest room rate has a lower practical rate. It is going to be between the 5000 bonus point rate and the cheapest rate.

Let’s go back to the previous example with the night stay at Miami Beach using the Buena Park room rates. Doing some quick calculations, you would need to spend 4.71 nights at $144.53 per night for a 5000 bonus point room at Buena Park and get one free night at Miami Beach for a total of $680.82 and you would get 3500 points left over. If you go the cheap route, you would spend 4.71 nights at $121.01 per night at Buena Park and one night at $179.99 per night at Miami Beach for a grand total of $749.95 and you’d have 13342 points left over. So here is the trade off – you would spend $70 less money going the 5000 bonus point route, but you would get 10,000 more points going the cheap route. It is like the value of 10,000 points is about $70 (which by the way is what you spend to buy 10,000 points when you redeem points). If you look at the Buena Park chart, the practical value of a room of both the 5,000 bonus point room rate and the cheapest room rate is pretty close ($116.95 vs $113.24).

**Earning Rate from 1x and 2x points per dollar spent**

Let’s look at two forms ways of earning points. First, you get 2 points per dollar spent on gas, groceries, and restaurants. Second, you get 1 point per dollar spent on everything else.

The objective here is to spend the least amount of money in order to get a room. Here is a chart that shows the spending cost for each redemption option at 2 points per dollar earning rate. I also looked up the cheapest rates at 4 Holiday Inn locations.

Bonita Springs | La Mirada | Anaheim Fullerton | Miami Beach | |||

Room cost | $84.36 | $113.30 | 169.39 | 195.49 | ||

Redemption Option | total spending cost @ 2 points per dollar | earning rate | earning rate | earning rate | earning rate | |

35000 | $17,500.00 | 0.48% | 0.65% | 0.97% | 1.12% | |

30000+$40 | $15,040.00 | 0.56% | 0.75% | 1.13% | 1.30% | |

25000+$70 | $12,570.00 | 0.67% | 0.90% | 1.35% | 1.56% | |

30000 | $15,000.00 | 0.56% | 0.76% | 1.13% | 1.30% | |

25000+$40 | $12,540.00 | 0.67% | 0.90% | 1.35% | 1.56% | |

20000+$70 | $10,070.00 | 0.84% | 1.13% | 1.68% | 1.94% | |

25,000 | $12,500.00 | 0.67% | 0.91% | 1.36% | 1.56% | |

20,000+$40 | $10,040.00 | 0.84% | 1.13% | 1.69% | 1.95% | |

15,000+$70 | $7,570.00 | 1.11% | 1.50% | 2.24% | 2.58% | |

20,000 | $10,000.00 | 0.84% | 1.13% | 1.69% | 1.95% | |

15,000+$40 | $7,540.00 | 1.12% | 1.50% | 2.25% | 2.59% | |

10,000+$70 | $5,070.00 | 1.66% | 2.23% | 3.34% | 3.86% | |

15,000 | $7,500.00 | 1.12% | 1.51% | 2.26% | 2.61% | |

10,000+$40 | $5,040.00 | 1.67% | 2.25% | 3.36% | 3.88% | |

5,000+$70 | $2,570.00 | 3.28% | 4.41% | 6.59% | 7.61% |

To help understand the chart, let’s say you spent $10,000 on gas, groceries, and restaurants earning 20,000 points. For $40 additional, you would be eligible for the 20,000+$40 option. If you redeemed for a night at Bonita Springs which costs $84.36 per night, the redemption rate based on dollars is 0.84% ($84.36/$10,040 = 0.84%). Basically you spent $10,040 to get a $84.36 room.

The idea is to get a room for the least amount of money. By looking at the table, you would get the best earning rate at the 5,000 plus $70 option. Unfortunately, not every hotel offers a 5,000 plus $70 option. For instance, the best option Miami Beach offers is 25,000 plus $70, so you would have to spend $10,070 in order to use the option. The redemption rate would be 1.94%.

So what is a good redemption rate in terms of percentages? It depends on what other credit cards you have. For example, if you have the Barclaycard Arrival card with the intent of redeeming points for travel (2.22% earning rate), the redemption rate has to be greater than 2.22% to make it worth your while to redeem IHG points. Otherwise, buy the room using the Barclaycard. If you have the Capital One Quicksilver card, the redemption rate to beat is 1.5%; if greater than 1.5% use the IHG points. If you have the Chase Freedom or the Discover card, the redemption rate to beat is 1%.

Here is a table for 1 point per dollar spent and the redemption percentages:

Bonita Springs | La Mirada | Anaheim Fullerton | Miami Beach | |||

Room cost | $84.36 | $113.30 | 169.39 | 195.49 | ||

Redemption Option | total spending cost@ 2 points per dollar | earning rate | earning rate | earning rate | earning rate | |

35000 | $35,000.00 | 0.24% | 0.32% | 0.48% | 0.56% | |

30000+$40 | $30,040.00 | 0.28% | 0.38% | 0.56% | 0.65% | |

25000+$70 | $25,070.00 | 0.34% | 0.45% | 0.68% | 0.78% | |

30000 | $30,000.00 | 0.28% | 0.38% | 0.56% | 0.65% | |

25000+$40 | $25,040.00 | 0.34% | 0.45% | 0.68% | 0.78% | |

20000+$70 | $20,070.00 | 0.42% | 0.56% | 0.84% | 0.97% | |

25,000 | $25,000.00 | 0.34% | 0.45% | 0.68% | 0.78% | |

20,000+$40 | $20,040.00 | 0.42% | 0.57% | 0.85% | 0.98% | |

15,000+$70 | $15,070.00 | 0.56% | 0.75% | 1.12% | 1.30% | |

20,000 | $20,000.00 | 0.42% | 0.57% | 0.85% | 0.98% | |

15,000+$40 | $15,040.00 | 0.56% | 0.75% | 1.13% | 1.30% | |

10,000+$70 | $10,070.00 | 0.84% | 1.13% | 1.68% | 1.94% | |

15,000 | $15,000.00 | 0.56% | 0.76% | 1.13% | 1.30% | |

10,000+$40 | $10,040.00 | 0.84% | 1.13% | 1.69% | 1.95% | |

5,000+$70 | $5,070.00 | 1.66% | 2.23% | 3.34% | 3.86% |

**Strategy**

If you just got the card and received 60,000 free points, use the 5,000 plus $70 option for rooms greater than $100. Or use the 10,000 plus $40 option for rooms between $84 and $100. The points are free and you would be getting a room at a discount.

If you going to redeem 2x points for rooms, figure out what the earning rates are on your other credit cards and check if you can beat it using the IHG card. Here is a chart to help.

Total Room cost | $75.00 | $100.00 | $125.00 | $150.00 | $175.00 | $200.00 | ||

Redemption Option | total spending cost @ 2 points per dollar | earning rate | earning rate | earning rate | earning rate | earning rate | earning rate | |

35000 | $17,500.00 | 0.43% | 0.57% | 0.71% | 0.86% | 1.00% | 1.14% | |

30000+$40 | $15,040.00 | 0.50% | 0.66% | 0.83% | 1.00% | 1.16% | 1.33% | |

25000+$70 | $12,570.00 | 0.60% | 0.80% | 0.99% | 1.19% | 1.39% | 1.59% | |

30000 | $15,000.00 | 0.50% | 0.67% | 0.83% | 1.00% | 1.17% | 1.33% | |

25000+$40 | $12,540.00 | 0.60% | 0.80% | 1.00% | 1.20% | 1.40% | 1.59% | |

20000+$70 | $10,070.00 | 0.74% | 0.99% | 1.24% | 1.49% | 1.74% | 1.99% | |

25,000 | $12,500.00 | 0.60% | 0.80% | 1.00% | 1.20% | 1.40% | 1.60% | |

20,000+$40 | $10,040.00 | 0.75% | 1.00% | 1.25% | 1.49% | 1.74% | 1.99% | |

15,000+$70 | $7,570.00 | 0.99% | 1.32% | 1.65% | 1.98% | 2.31% | 2.64% | |

20,000 | $10,000.00 | 0.75% | 1.00% | 1.25% | 1.50% | 1.75% | 2.00% | |

15,000+$40 | $7,540.00 | 0.99% | 1.33% | 1.66% | 1.99% | 2.32% | 2.65% | |

10,000+$70 | $5,070.00 | 1.48% | 1.97% | 2.47% | 2.96% | 3.45% | 3.94% | |

15,000 | $7,500.00 | 1.00% | 1.33% | 1.67% | 2.00% | 2.33% | 2.67% | |

10,000+$40 | $5,040.00 | 1.49% | 1.98% | 2.48% | 2.98% | 3.47% | 3.97% | |

5,000+$70 | $2,570.00 | 2.92% | 3.89% | 4.86% | 5.84% | 6.81% | 7.78% |

To maximize your nights at Holiday Inn, follow the following rules:

- Calculate 68% of the total cost of the 5000 bonus point room rate. You’re basically calculating the room rate at a 32% discount. You are approximating the lowest practical rate of the 5000 bonus point room rate (the practical rate at the bottom 3 redemption levels).
- If the result is close or greater than the cost of the cheapest room rate, go with the cheapest room rate. This is because the practical rate of the cheapest room rate is going to be lower than the lowest practical rate of the 5000 point bonus room rate. If the 32% discount rate is well lower than the cheapest room rate, go to the next step.
- If you redeem the bottom 6 options all the time, go for the 5000 point bonus rate.
- Otherwise, go for the cheapest room rate.