Hyatt recently announced a promotion for Hyatt cardholders: Through June 30th 2020, World of Hyatt cardholders can earn 3 elite nights for every $5,000 of spend. That’s 1 extra elite night per $5K spend over the usual 2 elite nights earned. Additionally, those with the old Hyatt card which doesn’t usually offer any elite nights for spend, will earn 2 elite nights per $5K spend. In this post, though, I’m looking only at the World of Hyatt card…
Does this promo make it worth increasing spend on the World of Hyatt card?
With some elite programs, the answer to a question like this would depend on how much you value the elite status you’re trying to obtain. Hyatt, though, makes the calculation more complicated because they offer Milestone Rewards which you can earn along the way towards elite status. Here’s their Milestone Rewards chart:
Estimating the value of 3 elite nights is hard
As you can see above, Milestone Rewards are first granted at 20 elite nights and then at every 10 elite nights thereafter. If the rewards were uniform, we could estimate their value and then say that for every 10 elite nights earned you get “X” value. We could then say that 3 elite nights earned from credit card spend is worth 30% of X. That’s not exactly right because you are likely to end the year with a number of elite nights that is not divisible by 10. Still, it would be a start. But things like 2 Club Access Awards earned at 20 nights are almost certainly less valuable than a free night earned at 30 nights or Suite Upgrade Awards earned at 50 nights. Worse, the value depends upon your elite status. If you have top tier Globalist status when you travel, then those Club Access Awards are worthless since you’ll get free access to clubs anyway.
Another complication is that the World of Hyatt credit card offers a free Cat 1-4 night certificate after $15K spend in your cardmember year. So, if you’re starting from scratch, spending $15K during this promotion results in more value than would be earned by those who have already spent $15K on their card.
A no-brainer for some
In my post “Manufacturing Hyatt Globalist Status,” I explained why Globalist status is valuable and I compared options for achieving that status through credit card spend and mattress running (booking cheap paid or award stays just to earn status). I concluded that generating spend on the World of Hyatt credit card was the best option for filling the gap between actual stays and the required 60 nights to get to Globalist status. Keep in mind that this path only makes sense for those who highly value Hyatt Globalist status, and have easy ways to manufacture spend, and are not afraid of getting their Chase accounts shut down.
If you decided, like I did, that you would spend your way to Globalist status, then this promotion is great. It means less spend is required to get to where you need to be. The real question for you is not whether to participate, but rather how far to go with it? Once travel opens up again, Hyatt is likely to run a number of promotions that offer extra elite nights for stays. So, if you only want to get to 60 nights, you’ll have to estimate the number of elite nights you might earn later due to actual stays and promotions. Fortunately, if you go over 60 nights, you can still earn extra Milestone Rewards (10K points or a Suite Upgrade Award) at 70, 80, 90, and 100 nights.
For those who haven’t decided to go for Globalist through spend anyway, let’s see if we can figure out whether it’s worth participating in this World of Hyatt credit card promo…
Estimating the cost of spend
For the purpose of this post, let’s decide that the cost of spend is 2%. Here’s why:
- For those who haven’t yet paid federal taxes, you can use your Hyatt card to pay (or overpay) taxes for a fee of just under 2%. See this post for details: Complete guide to paying taxes via credit card, debit card, or gift card.
- Alternatively, you can look at the opportunity cost: if you put spend on the Hyatt card you’ll lose out on the rewards earned on a 2% cash back card. So, the opportunity cost then is 2% (assuming a 2% cash back card is your best alternative to the World of Hyatt card).
Working with that 2% cost estimate, we can then calculate that the cost to spend $5,000 is $100:
In exchange for that spend, you will earn 5,000 Hyatt points plus 3 elite nights. To make the math easy, let’s conservatively value the earned Hyatt points at only 1 cent each. We…
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