The Differences Between Airline & Hotel Co-Brand Credit Cards

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There’s a dizzying number of travel-related credit cards in the marketplace. They can be divided into several categories:

• Bank cards that earn points that can be redeemed for travel
• Bank cards that earn points you can transfer to loyalty program partners
• Co-brand cards that earn points in a single loyalty program

The latter category includes airline & hotel cards. While these cards earn miles or points in their respective programs, they’ll usually throw in some perks to make it worthwhile to pay the annual fee.

That’s where the similarity ends. There are big differences in the type of benefits each card offers, mainly due to the difference in the business models.

I’ll look at the mid-range cards from both airlines & hotels, which usually have annual fees between $89-$150.

Hotel co-brand cards offer some combination of these benefits

• Free internet access
• Assistance with qualification for status (usually by issuing night credits each year)
• Free night voucher capped at a certain point/category (which you may be able to upgrade with extra points)

Hotel co-brand cards are limited as to what they can offer because their respective parent companies usually don’t own most hotels. Instead, the locations are franchises that partner with the main company. This arrangement means the “brand” has a limited amount of control they can exert over each hotel, and therefore they’ll offer benefits that they can control. That’s why they provide night credits for status in a loyalty program or a free night certificate.

Airlines are a different business model and co-brand cards offer a different set of benefits.

• Preferred boarding group
• Free checked bag
• Discounted in-flight food and internet
• Spending helps to achieve higher status levels

Since airlines own the planes (or have deals with regional carriers to offer seamless operations), they have more control over the operations. This means the benefits offered to co-brand cardholders are directly related to the flight experience.

Which cards are more valuable?

When getting started, people will ask which card they should get, airline or hotel. Besides saying “Why not both?” the most valuable card depends on your situation. If you’re an infrequent traveler without airline status, the free checked bag and preferred boarding can save more than the annual fee on a single flight.

If you’re a frequent traveler with airline & hotel status, you already get the benefits of an airline co-brand card. However, the extra night credits could help you qualify for another year of Hyatt Globalist or Marriott Ambassador Elite, giving you more benefits than just free Wi-Fi.

If I had to choose, I’d keep my airline co-brand cards instead of the hotel cards. We check bags on several trips and save more money than we pay in annual fees. But this is another case where Your Mileage May Vary.

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This post first appeared on Your Mileage May Vary