If you are active in the points and miles community, you are no doubt aware that Hilton announced last June it had entered into an exclusive agreement with American Express to issue co-branded Hilton Honors credit cards. Previously, Hilton had a dual agreement with both American Express and Citibank. Until last week I held a Hilton card from Citibank, but I called and closed the account. Since maximizing points and miles are key to offsetting my travel costs, I want to discuss my reasoning behind this decision.
When this news broke last year, I wrote about its potential impact on my credit card portfolio. At the time I held the American Express Hilton Honors Card and the Citi Hilton Honors Reserve Visa. I canceled the Amex card a few months later in order to reduce my number of open Amex credit cards. (Amex limits a cardholder to five open credit card accounts. I was interested in signing up for a new Amex product but was at that limit.) On the other hand, I never made a decision whether to close the Citibank card.
In November I received an email from Citibank informing me that my card would be transferred to American Express on January 30, 2018. Though I had decided by this time that I would close the account rather than allow the card to be transferred, I never took time to call and and request the account closure. Two weeks ago, when I received a replacement American Express card in the mail, I was concerned that I had waited too long. I reviewed the Citi email and was relieved to read in the mouse-type footnotes that "if your account is closed or is not in good standing as of January 26, 2018, your account will not be transferred to American Express." Still time! Last week, I finally called Citibank to close the account. My decision was not a reflection on the features and benefits of the replacement Amex product. Rather, my motivation was simple - preserve the opportunity to receive a large signup bonus by signing up for the same card in the future.
American Express Hilton Honors Ascend Card
A few months after the Hilton-Amex tie-up was announced, we learned about the new lineup of American Express Hilton Honors cards. There are some very impressive options! (I won't go into detail on the pros and cons of the various cards but will save that for a future post when I apply for one of these offerings.) We also learned that the Citi Hilton Honors Reserve Visa would be replaced by the American Express Hilton Honors Ascend Card. Per The Points Guy, the Ascend benefits include:
...12x points on Hilton purchases (a 7.2% return, based on TPG’s valuations); 6x points at US grocery stores, US restaurants and US gas stations; and 3x points on everything else...[and] the ability to earn a weekend award night at a Hilton property after you spend $15,000 on the card in a calendar year, and 10 free Priority Pass lounge passes ...
I consider this card to be a slight upgrade over my existing Citi card. It offers two additional points dollar spent with Hilton, bonus points on grocery, dining and gas in lieu of 5x points on airfare and car rentals that Citi offers, while matching the 3x points per dollar on other spend. In addition, the Citi Hilton Honors Reserve card did not offer Priority Pass lounge pass. Negatively, the spend threshold for a free weekend is 50% higher: $15,000 for the Amex versus $10,000 for the Citi. Both card offer Hilton Honors Gold status as long as you are a cardmember. However, I closed my account due to the single card benefit I would not receive - a large signup bonus.
American Express signup bonuses - very restrictive!
The single best way to accrue large chunks of points and miles from credit cards is via signup bonuses. For some cards, you acquire them mainly to earn a large upfront bucket of points and then rarely, if ever, use the card again. Other cards may provide a similar bonus but also offer additional value through member benefits or multiple points on various categories of everyday spend. For me, the Hilton Honors American Express Ascend Card falls into the former category. Though the card has some nice benefits, none of these hold much value for me personally - I get similar or better points-earning options on other cards. That leaves the signup bonus.
American Express is currently offering up to 100,000 Hilton Honors points for new cardholders. Unfortunately, transferred accounts are not eligible for this offer. Worse than that, the following line in the offer terms and conditions appears to say that, had I allowed my Citi card to convert, I would have lost an opportunity to earn a similar bonus on a new Ascend card in the future:
Welcome bonus offer not available to applicants who have or have had this product.
Whether there is an any exception to this condition when an account is transferred from another bank, I do not know. However, given that the Ascend card offers little benefit to me beyond the signup bonus, I felt that closing my Citi account and ensuring that I did not receive a replacement Ascend card was wise so that I kept my future options open.
The new American Express Hilton Honors Ascend Card is an attractive product with a fantastic signup bonus offer on new accounts. Unfortunately, I would not have received the chance to earn these points if my Citi Hilton Honors Reserve Visa had converted to this card. Furthermore, I would likely have lost the chance to earn a similar bonus in the future. Because points and miles is key to offsetting my travel costs and allowing me to stay in high quality hotels, these new cardmember offers are a cornerstone to a points and miles devotee's strategy for accruing reward currencies. Closing my Citibank account prior to the conversion was the smart move. At some point in the future I intend to apply for the Ascend card and earn the signup offer.
Do you have a Citibank card that will convert to the Ascend card? Are you going to allow that to happen or do you plan to close your account? Let us know in the comments.