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Friday, February 01, 2008

American Express Hilton HHonors Card – The Best Rewards Card Out there.

There is a debate that rages on about what the best reward card is out there. Some argue that cash back is the way to go (such as the new American Express Plum card). Others believe that flexible rewards are the way to go. Both sides give very good reasons, but there is one card that stands above them all, the American Express Hilton HHonors card. Especially when you actually measure out the rewards.

For some time the American Express Hilton HHonors card has been heads above all others in terms of the overall value of your rewards. For that reason, I will argue that if you do any traveling at all, the American Express HHonors card is by far the best way to go. Here’s why:

We need to remember that it is not only about the points that you acquire. That being said with the American Express Hilton HHonors card, you get 3 points for every dollar that you spend on the card minimally, an additional 2 points per dollar (for a total of 5) for special items like groceries, gas etc., and additional 5 points per dollar (for a total of 8) for any dollar that is spent within a Hilton property – whether for business or pleasure – when you use your card.

Of equal importance to me is that with this card, there is no annual fee while it still has a lot of the other great American Express features and protections.

Let’s now take a look at how the American Express Hilton HHonors measures against its closest competitors. I will run the math for you, so you can see why it is so much better. The scenario here is that when you have spent roughly $70,000 on your credit card over a couple of years for comparison sake.

Airline Cards – Like United’s Mileage Plus
If you take the instance of the United Mileage Plus credit card’s 1 mile per dollar spent it gives you a total of 70,000 miles, or enough to purchase two United Airlines flights to Hawaii with a saver award. This equates to roughly a $1,400 in value – more or less depending on the time of the year.

Cash Reward Cards – Like the American Express Plum
If you take the instance of cash rewards cards such as American Express Blue or Plum, you can assume a high-end cash back percentage of 3%. The math here is a simple $2100 cash back to you, slightly better than the United Mileage Plus type card.

American Express’ Hilton HHonors Card
Now let’s look at the Hilton HHonors American Express card. If you get 3 points for every dollar (conservatively), that equates to 210,000 HHonors reward points. For 175,000 points, you can get a 6-night stay at a resort like the Hilton Hawaiian Village in Hawaii. With a standard rate of $300 a night, plus $30 in taxes, that is a value of $1,980 – already better than the cash back. However, let’s look at it further. If you spend over 25,000 a year on your American Express Hilton Hhonors card, which means you are automatically upgraded to Hilton HHonors Gold VIP status. What does that mean? Well, you not only get free breakfast each morning, but you will get a room (99% of the time) from your standard reward room. Our last trip to Hawaii ended up with a suite on the 27th floor of the Diamond Head tower, a $700+ a night room. Let’s redo the math. $770 (w/ taxes) a night, plus $20 a person for the free breakfast. What does that come to for just two people? A total value of $4,860.

Wow, that is almost $5,000 in value – way more than double any other opportunity out there. Even better, both the calculation of points and the spending of the points were conservative. If you qualify for point stretcher rewards, that same stay will only cost you 144,000 points! Still even in the above scenario have 35,000 or more than 15% of your point remaining still.

Hopefully my arguments here put an end to any debate that you might have seen. The is no question that point for point and dollar for dollar, the American Express Hilton HHonors card is the best rewards value out there. The only catch? You have to be a fan of the Hilton chain with their thousands of properties around the world. Luckily for me, I am.

Disclosure: I use my American Express HHonors card almost exclusively for everything I purchase. Because of that, I have not paid for a hotel room on vacation for 5 years -- that includes my upcoming trip to London and Paris.