Yesterday Hilton announced that starting January 1st, 2018 American Express would be the exclusive issuer of Hilton co-branded credit cards in the United States. Currently Citi also issue Hilton co-branded cards. In recent times American Express have struggled keep co-branded partners. The most high profile loss was Costco to Citi/Visa, they also lost JetBlue to Barclaycard and will likely lose access to Starwood Preferred Guest at some stage due to the Marriott acquisition.
It’s unusual for a brand to have credit card deals with multiple card issuers, the only other one that comes to mind is American Airlines with Citi and Barclaycard and that’s in large part due to the U.S. Airways merger (Barclaycard previously held the U.S. Airways credit card portfolio).
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What Will Happen To Existing Citi Cardholders?
The big question is: will American Express purchase the back book from Citi? If American Express does purchase the Hilton back book from Citi then that means all existing Citi Hilton cardholders would be automatically product changed to an American Express Hilton card.
Citi is yet to make a final decision on this. If they don’t sell the back book then Citi would product change their existing Hilton cardholders into a different Citi credit card product (this is what American Express did with their Costco cardholders). If this happens then Citi would be product changing them to one of their own branded cards, for example:
- Citi Simplicity
- Citi Double Cash
- Citi ThankYou Preferred
- Citi ThankYou Premier
- Citi ThankYou Prestige
- Citi Diamond Preferred
Out of those options I’d say Citi Double Cash or Citi ThankYou Preferred are the most likely but it wouldn’t be out of the question for them to create a new product to product change cardholders into.
Should You Sign Up For A Citi Hilton Card?
Citi offers two Hilton cards with the following current sign up bonuses (thanks again to our handy spreadsheet):
- Hilton Honors (no annual fee card): 40,000 points after $1,000 in spend
- Hilton Honors Reserve: Two free weekend nights after $2,500 in spend. Annual fee of $95 is not waived
Update: The 24 month rule doesn’t apply to this 40,000 point offer.
It’s important to keep in mind that the Citi family 24 month rule applies to these cards. This means if you’ve opened or closed either of these cards within the last 24 months then you’re not eligible to receive the sign up bonus. I can’t see either bonus decreasing as 40,000 points on the no annual fee card is low (highest is 75,000 and we see that frequently) and best on the reserve is two free weekend nights + $100.
We know that we have until the end of this year and given that the 24 month rule applies to these cards I don’t think making a snap application at this stage makes any sense. I’d be hopeful that we will see better offers on both cards before years end (let’s hope we get some more links without the 24 month language).
Where Does This Leave Citi?
This leaves Citi in an awkward position with no hotel co-branded partner (they do have Expedia, but that isn’t the same). My guess is that Citi will be targeting another hotel partner to replace Hilton, possible options would include:
- Wyndham
- AirBnB (not a true hotel brand, but close enough)
- AccorHotels
I’d love to see an AirBnB or AccorHotels card, I really don’t understand why Accor isn’t in the co-branded card game given how insanely profitable it has been for other brands. Traditionally Citi has had one co-branded partner in each space (e.g one hotel, one airline), unlike other card issuers with multiple partners in the same space (e.g Chase with Southwest, United & British Airways).
Does This Mean We Will See An Ultra Premium Hilton Card?
Late last year a rumor circulated regarding an American Express Hilton Diamond Card. Some people seem to think that this new exclusive arrangement with American Express & Hilton makes such a card more likely. I’d say I agree that it does make it more likely, but I’m not that confident we will ever see that card anymore.
Our Verdict
Hilton is a relatively small player in the co-branded space believe it or not. American Express’ once per lifetime policy will most likely mean that Hilton will cease to be a realistic points option for me. I’m hopeful that Citi will replace Hilton with something even better, I’d be extremely happy with an Accor or AirBnB card from them. Let me know your own thoughts about this change in the comments below.
