My Predictions For The Future Of Chase Hyatt Card: 50k Points, Diamond Status & Increased Annual Fee

I like making predictions, sometimes they make me look like Nostradamus and other times they make me look stupid. Regardless of the outcome I think it’s interesting to speculate and I hope readers also enjoy these types of posts. I made a number of predictions at the end of 2014 for 2015 (some of which have already been proven correct and others are looking less & less likely). Today I thought I’d look at the Chase Hyatt card and what I think will happen to this card.

This is obviously just speculation on my part, I don’t have any inside word if Chase has any plans to change the Chase Hyatt card at all. I could (and probably will be) 100% wrong, only time will tell.

The Predictions

• Sign up bonus will go from two free nights at any Hyatt property to 30,000-50,000 points. I think the $50 statement credit will also likely disappear, but it might still be possible to get this by starting a dummy booking (like it’s currently possible). The spending requirement would also increase to at least $2,000.
• Permanent 20% point refund. At the moment it’s possible to get 20% of your points refunded when you book a Hyatt award night and have a Chase Hyatt credit card. I think this will become a permanent benefit, they could reduce this point refund to only 10% but after seeing the popularity I think they’ll keep it at 20%.
• Status as a spending bonus. The Hyatt card already comes with Platinum status automatically and I think the card will continue to receive that benefit as standard, but cardholders might be able to earn Diamond status with spend. Diamond status requires 25 stays or 50 nights stay to achieve. Here are some possibilities they could go with:
  • Diamond status after $40,000-$60,000 in spend.
  • 2 stay credits and 5 nights after $20,000 in spend (and doubled again after $40,000 in spend). In this case the card would probably come with 5 stays/15 nights (which is enough for platinum status). This would mean if you spent $40,000 you’d receive a total of 9 stays/25 nights.
• Annual free night certificate as a spending bonus. The Hyatt card comes with a free night at any category 1-4 property, they could remove/change the category limit and introduce a spending requirement to get the free night certificate. Most likely this would be $10,000 in spend for category 5-6.
• Annual fee increase. Currently the annual fee is $75 and waived for the first year, I think this would be increased to either $95 or $127.

[Read: How To Get The Chase Hyatt Two Free Nights + $50 Statement Credit Offer]

Why

It’s always good to explain why I think certain changes will happen. I’m probably the most confident about the point bonus being introduced and the point refund bonus and if either of these happen then it’s only natural that the annual fee is also increased.

Point Bonus

At the moment Hyatt offers two free nights at any Hyatt property worldwide. This is a good marketing angle because it gives cardholders access to aspirational properties. One of the benefits of this is that people will often book two free nights using their certificates and then book paid nights as well to extend their stay for longer than two nights.

The advantage to offering points is that points are far more flexible. The downside to this is that cardholders don’t associate points with the free stays, this causes a big problem down the line as they have no emotional connection to Hyatt points. By changing the sign up bonus to points, cardholders instinctively know that they could have the exact same experience if only they earned some more points.

There are some added benefits to points for Hyatt as well:

• They can devalue points at any time
• Points often go un-redeemed, while the redemption rate for free night certificates is higher
• Points can lead to a situation where somebody has orphaned points

Redemption Bonus

The main reason credit card companies offer redemption bonuses is that orphaned points/miles drive brand loyalty and increased spending. Let’s assume you have 25,00 Hyatt points and book one night at a category six property, Hyatt give you 20% of those points back in the form of a redemption bonus. Suddenly you have 5,000 points again, at this stage you have a few options:

• Redeem your 5,000 points for a category one property
• Stay at Hyatt properties to earn more Hyatt points
• Transfer Chase UR points to Hyatt
• Put your regular spending on your Chase Hyatt card

You’ll notice in that 3/4 of these scenarios Hyatt ends up making money. Even in the first situation they are still going to have 1,000 Hyatt points left over after their category one stay. Consumers hate having orphaned points and they are usually willing to make irrational decisions trying to make sure they use up these points and get value out of them.

Redemption bonuses are incredibly smart marketing, they drive user engagement, cardholder satisfaction and most of all profits for the cobrand partner and card issuing bank.

Spending Bonuses

One of the key ways that card issuers make money is through interchange fees, they basically make around 1.5% of the value of each transaction. Obviously the more each cardholder spends, the more money they make. By offering increased benefits that are tied to spend they are able to increase how much people are spending on these cards.

Annual Fee Increase

Hyatt will naturally want more money for offering increased cardholder benefits, they will see some of the interchange fees that Chase earns. They will also want to see an increase in the amount they receive per approved applicant. Chase can offer this by increasing the annual fee on the card.

Final Thoughts

I think we will see the Chase Hyatt card with the following:

• 50,000 point sign up bonus after $2,000 in spending
• 20% points refunded when booking award nights
• Diamond status after $50,000 in spending
• $127 annual fee

They might also offer a few different versions, who knows? I’m just guessing after all. If you could rework the Chase Hyatt card, how would you rework it and why?