IHG Points Bonus: Is it a Smart Buy for You?

IHG One Rewards periodically offers bonuses on purchased points, and the latest promotion is here. While the allure of acquiring a large number of points at a discounted rate is tempting, it's crucial to analyze whether buying points aligns with your travel goals and credit card strategy.

At first glance, purchasing points might seem unnecessary. However, consider these scenarios:

  • Luxury Stays at a Discount: IHG's luxury properties, like those under the Six Senses or InterContinental brands, often command high cash prices. By purchasing points during a bonus promotion, you could potentially book these rooms for significantly less than the retail rate. For example, a night at an InterContinental hotel might cost $400, but could be booked for 60,000 points. If you can acquire those points for less than $400, you're ahead.
  • Offsetting Expensive Travel Dates: During peak season or special events, hotel prices surge. Points redemptions often remain relatively stable, making them a valuable hedge against inflated cash rates.
  • Topping Up Your Account: Sometimes you're just short a few thousand points for a dream redemption. A points purchase can bridge that gap, allowing you to secure your desired booking.

Credit Card Strategies to Maximize Your Purchase

Before you buy, consider these credit card strategies to amplify your rewards:

  • Use a Card with a Travel Bonus: Many credit cards offer bonus points or miles on travel purchases. Use a card like the Chase Sapphire Preferred, Chase Sapphire Reserve, or Capital One Venture X to earn extra rewards on your IHG points purchase. These cards often offer 2x-5x points on travel.
  • Meet Minimum Spending Requirements: If you're working towards a sign-up bonus on a new credit card, purchasing IHG points can help you reach the spending threshold faster. Just ensure you can comfortably pay off the balance to avoid interest charges.
  • Check for Targeted Offers: Some credit card issuers, like American Express, occasionally offer targeted bonus rewards on hotel purchases. Check your Amex Offers or other similar programs for potential savings.

Calculating the Value: Is it Worth It?

To determine if buying IHG points is worthwhile, calculate the cost per point and compare it to the potential redemption value.

  1. Determine the Cost Per Point: Divide the total cost of the points purchase by the number of points you'll receive. For example, if you spend $500 and receive 100,000 points (including the bonus), your cost per point is $0.005 (0.5 cents).
  2. Estimate Redemption Value: Research the cash prices and point values for hotels you're interested in. Divide the cash price by the number of points required for a redemption to determine the cents-per-point value. For example, if a hotel costs $300 or 50,000 points, the redemption value is $0.006 (0.6 cents) per point.
  3. Compare: If the redemption value exceeds your cost per point, buying points could be a good deal. In our example, redeeming points at 0.6 cents per point after buying them at 0.5 cents per point would represent a 20% return on investment.

The RewardSmart Recommendation

Buying IHG points with a bonus can be a strategic move, especially if you have specific high-value redemptions in mind. However, don't buy points speculatively. Always have a plan for how you'll use them. Remember to leverage credit cards with travel rewards to maximize your return and consider your overall financial situation before making a purchase. Use a travel rewards credit card to make the purchase to earn even more points/miles on the transaction!