Analyzing the Value of the Refreshed Ritz-Carlton Rewards Card

As we wrote about earlier this month, Chase recently made some major (positive) changes to the Ritz-Carlton Rewards Card. This included an improved sign-up bonus and a number of new or enhanced perks. Back in 2014, I reviewed the card and identified a fairly limited type of traveler for whom it would be a good fit. However, I wanted to revisit that analysis in light of the enhancements, and today I’ll go through each of the key benefits on the card to help you decide whether this card should earn a spot in your wallet.

Before getting into the analysis, here’s a quick summary of the benefits and other details:

• Earn 3 Complimentary Nights at any participating Tier 1-4 Ritz-Carlton hotel after spending $5,000 on purchases in the first 3 months from account opening.
• A $300 annual travel credit to use for qualifying airline purchases such as seat upgrades, baggage fees and preferred lounge memberships or passes
• A complimentary $100 credit for qualifying dining, spa or other hotel recreational activities on paid stays of 2 nights or longer
• A complimentary annual Priority Pass™ Select membership with access to over 900 VIP airport lounges in over 400 cities worldwide (~$399 retail value)
• Automatic Gold Elite status during your first account year and each account year thereafter when you spend $10,000 on your card.
• Upgrade to The Ritz-Carlton Club® level 3 times annually on paid stays of up to 7 nights
• Pay for your Global Entry application (currently $100) and receive a $100 statement credit. You’ll also be eligible to receive TSA Pre √® privileges if you are approved.
• All for a $450 annual fee

In addition, at the time of writing, it appears that the Ritz-Carlton Rewards Card is not subject to Chase’s 5/24 rule, whereby you’d be automatically declined for certain Chase cards if you’d opened five or more cards (from any issuer) within the past 24 months. This could change at any point, so if you’re above that threshold and have been eying this card, now’s probably a good time to pull the trigger!

Let’s now take a closer look at the benefits on the card, estimate a value for each, and see if there are any comparable cards that offer similar perks.

SIGN-UP BONUS ($1,200)

The first perk that was enhanced with this card is the sign-up bonus. Previously, the card only offered one or two free nights in a Tier 1-4 property, though we’d occasionally see offers of bonus points instead. Under the new card, you can earn three complimentary nights at any participating Tier 1-4 Ritz-Carlton hotel after spending $5,000 on purchases in the first three months from account opening. While this does exclude top-tier hotels like the Ritz-Carlton Grand Cayman, you can nevertheless get some incredible value out of these nights — over $2,000 in some cases.

Value: While some Tier 1-4 properties are clearly more luxurious and expensive than others, you can still get some great value out of this. I’ll assume a value of $400 for each of the three nights.

Other options: The Marriott Rewards Premier Credit Card also allows you to redeem points for Ritz-Carlton stays. However, the sign-up bonus on that card is currently only 80,000 points after you spend $3,000 on purchases in the first three months from account opening. While this would be enough for three nights in a Tier 1 property at the PointSavers rate, it’s nowhere near enough for three nights in a Tier 3 or 4 hotel.

The other possible option would be the Chase Sapphire Reserve Card. You could transfer the 100,000 points earned from the sign-up bonus directly to Ritz-Carlton, though you’d again fall short of the points required for three nights at Tier 3 or Tier 4 properties. However, this new card does allow you to redeem points directly for travel at a rate of 1.5 cents apiece, so as long as your three-night stay was less than $1,500, this could cover a similar trip.

TRAVEL CREDIT ($300)

This benefit remains unchanged from the previous version of the card. Every calendar year, you can receive up to $300 in statement credits for eligible travel purchases, including baggage fees, lounge access or in-flight Wi-Fi. Unfortunately, you must call and ask a customer service rep to apply the credit, and it typically doesn’t include airfare. There are many data points on gift cards in small denominations being reimbursed (but just as many data points in the opposite direction). However, you aren’t restricted to a single airline so it has more flexibility than some of its competitors.

Value: Since this covers a variety of expenses (and anecdotally could be applied to non-covered purchases), I’ll peg this at face value.

Other options: The Platinum Card from American Express also offers a travel credit for incidentals, but it’s only $2o0 and must be used on a specific airline (that can only be changed at the beginning of the year). There’s also the Citi Prestige Card, which offers a $250 air travel credit that can be used for incidentals or airfare. Finally, the new Chase Sapphire Reserve Card is the most rewarding of them all, giving cardholders a $300 credit toward any travel purchase every year.

$100 STAY CREDIT ($500)

Another nice perk on the card is the $100 credit for qualifying dining, spa or other hotel recreational activities on paid stays of two nights or longer. If you’re planning on taking advantage of the terrific facilities at a Ritz-Carlton hotel during your stay, this can be a really nice perk. However, keep in mind that this only applies to incidentals and can’t be used to “discount” the room rate or cover charges like resort fees. In addition, it’s only applicable to member and non-discounted rates, which excludes government and AAA rates, and the terms and conditions indicate that it’s not valid on alcohol. Finally, you must add the credit to your stay ahead of time and must pay for the stay with the Ritz-Carlton Rewards Card. If you try to add it at checkout, you’ll be out of luck!

Value: Obviously the value of this perk is entirely dependent upon the number of times you stay in a Ritz property and pay an eligible rate during the year, so I’ll assume that you can use it 5 times.

Other options: There isn’t any credit card that offers as consistent a benefit as this one across all participating properties, but you may be able to score a credit toward incidentals by booking a stay through American Express Fine Hotels & Resorts (available with the Amex Platinum). In addition, if you’re paying for a Ritz-Carlton stay of four nights or more, you may be better off with the Citi Prestige thanks to the 4th Night Free benefit, a perk that’s available on certain discounted rates and can easily outstrip a measly $100 credit.

PRIORITY PASS MEMBERSHIP ($200)

Another new perk on the card is a Priority Pass Select membership, granting you access to over 900 airport lounges around the world. This used to be membership in Lounge Club, a far inferior program with fewer locations. As a result, this is a fantastic improvement. There are many Priority Pass lounges that can make your travel much less stressful, and even a less-than-luxurious location can be a respite from the business of the terminal (like the thoroughly underwhelming Mera Business Lounge my wife and I visited in Cancun after our stay at the Grand Hyatt Playa Del Carmen). Unfortunately, it appears that this membership does not include guests.

Value: The marketing materials on this card claim that the Priority Pass Select benefit is worth $399, but that’s the retail price, and I’d never recommend that anyone pay that. This perk depends on how frequently you travel through an airport with a Priority Pass lounge and don’t otherwise have access to a lounge (through your class of travel or elite status, for example). As a result, I’ll assume that it’s worth roughly 50% of the retail value.

Other options: The Citi Prestige Card, the Platinum Card from American Express and the Chase Sapphire Reserve Card all include the same Priority Pass membership. However, only the Prestige and Sapphire Reserve include confirmed access for guests (you have to pay $27 per guest on the Amex Platinum).

ELITE STATUS ($500)

Another unchanged benefit involves elite status in the Ritz-Carlton Rewards program. As a new cardholder, you’ll enjoy automatic Gold elite status during your first account year and each account year thereafter when you spend $10,000 on your card. Remember too that your Gold status perks in the Ritz-Carlton Rewards program are also honored at Marriott properties, so you have thousands of hotels and resorts at which to enjoy these benefits. In addition to the relatively easy path to Gold status, you can also earn an upgrade to the program’s top-tier Platinum status by spending $75,000 on the card in an account year. This includes added perks like welcome amenities and can be a great way to gain a shortcut to hotel elite status.

Value: I pegged Gold status at $1,845 and Platinum Status at $3,245 in my valuation of Marriott and Ritz-Carlton elite status earlier in the year. However, that assumed a lot of stays, and the true value obviously depends on how frequently you visit these properties. Thinking about what you actually might want to pay for Gold status, I’ll keep this at a relatively conservative $500.

Other options: The Marriott Rewards Premier Credit Card allows you to spend up to “automatic” status, but it’ll take $105,000 in spending each year to reach Gold and $180,000 per year to reach Platinum.

CLUB LEVEL UPGRADES ($600)

Another perk being carried over from the old version of the card is the three upgrades to the Ritz-Carlton Club Level on paid stays of up to seven nights. Like the $100 credit mentioned above, these upgrades are only valid on member and non-discounted rates and explicitly exclude rates like AAA and government. While the terms and conditions indicate that it is non-transferable and can’t be combined with any other offers, TPG Senior Points & Miles Contributor Richard Kerr was able to upgrade a coworker and combine this upgrade with the $100 credit at the Ritz-Carlton Dubai, so as always, your miles may vary!

Value: Ritz-Carlton Club Lounges typically aren’t comparable to other chains, as they often include multiple food and drink presentations throughout the day rather than only during select hours. Access to these lounges typically comes at a premium of at least $100 per night, though it can easily run over $200. Even though these upgrades can cover paid stays up to to 7 nights, I’ll assume a conservative value of $200 apiece.

Other options: None

EARNING RATES ($0)

Though not listed above, another nice perk on the card is how many points you’ll earn for your everyday purchases. Here’s a breakdown of the categories:

• 5 points per dollar spent at any participating Ritz-Carlton hotel or our worldwide partner hotels, including EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels and Marriott Hotels
• 2 points per dollar spent on airline tickets purchased directly with the airline, and at car rental agencies and restaurants.
• 1 point per dollar spent on all other purchases.

In addition to these earning rates, you’ll also receive a 10% annual points premium based on all of the purchases made during the previous year. That effectively raises the above rates to 5.5, 2.2 and 1.1 points per dollar spent (respectively). Based on TPG’s most recent valuations, which peg Ritz-Carlton Rewards points at 0.7 cents apiece, you’re looking at a return of 3.85% on Marriott stays; 1.54% at airlines, car rental agencies and restaurants; and 0.77% everywhere else.

Value: You might think this is strange, but I don’t value these earning rates at all. Simply put, there are much better options, including cards with significantly lower annual fees.

Other options: Many other cards offer better return on bonus category and everyday spending. The Citi Prestige Card offers 3x points on hotel purchases (a return of 4.8%), while the Chase Sapphire Preferred Card offers 2x points at restaurants and on travel purchases (a return of 4.2%).

VISA INFINITE ($200)

The final big change on the card is its move from a Visa Signature to a Visa Infinite card. Until recently, this was an under-the-radar collection of benefits. Now both the Ritz-Carlton Rewards Card and the Chase Sapphire Reserve Card are both Visa Infinite cards, opening up new perks and benefits that could appeal to a wide variety of travelers. There are two in particular that I want to highlight:

1. Global Entry Credit

One nice perk on Visa Infinite cards is the statement credit for a Global Entry membership. In the past, you could use part of the $300 statement credit to cover this fee, but now that Chase has changed this card to a Visa Infinite, you can take advantage of this benefit every four years without dipping into the travel credit. All you need to do is use the card for the $100 membership fee and a statement credit will post to your account within 6-8 weeks. The great thing about this perk is that the membership doesn’t have to be for you. Chase has no way of identifying whether the $100 fee is for your membership or a friend or family member’s membership. As long as you charge it to your Ritz-Carlton Rewards Card, it should be eligible for the credit.

Other options: Many other cards offer a Global Entry or TSA PreCheck statement credit, including the Citi Prestige Card, the Platinum Card from American Express and the Citi / AAdvantage Executive World Elite MasterCard. However, all of these cards expressly provide the statement credit every five years, while the Ritz-Carlton Rewards Card gives it every four years, a small yet significant difference.

2. Airfare Discount

The second most intriguing perk available on select Visa Infinite cards is the $100 airfare discount on round-trip domestic coach airfare. This apparently can be applied to an unlimited number of tickets during the year, as long as you are booking for 2-5 passengers and paying for the purchase with your Ritz-Carlton credit card. Note that this discount isn’t offered to Chase Sapphire Reserve cardholders, since the issuer can choose to leave out certain Visa Infinite benefits.

Other options: Some cards offer companion fare benefits (like the Alaska Airlines Visa Signature Card), but none offer an unlimited number of discounts like this.

Value: Even though the Global Entry credit can only be used once every four years, the airfare discount can be used multiple times during a year. Once again, the value you get depends on how frequently you need to book round-trip domestic coach airfare for 2-5 passengers. I’ll assume a conservative utilization of twice per year.

So, should you get it?

Sorting through all of these perks can be a bit overwhelming, and if you’re going to pay a $450 annual fee on a card, you want to be sure about it. To really help decide, ask yourself one key question:

If the answer is, “Very infrequently, if at all,” then you can cross out the Ritz-Carlton and Marriott-specific benefits above. Then you can calculate the benefits you’ll get in both the first year (with the sign-up bonus) and subsequent years:

Travel Perks Only (Year 1):
Sign-up bonus: $1,200
Airline credit: $300
Priority Pass membership: $200
Visa Infinite: $200
Annual Fee: $450
TOTAL VALUE: $1,450

Travel Perks Only (Year 2+):
Airline credit: $300
Priority Pass membership: $200
Visa Infinite: $200
Annual Fee: $450
TOTAL VALUE: $250

Travel and Ritz/Marriott Perks (Year 1):
Sign-up bonus: $1,200
Airline credit: $300
Stay credit: $500
Priority Pass membership: $200
Elite status: $500
Club upgrades: $600
Visa Infinite: $200
Annual Fee: $450
TOTAL VALUE: $3,050

Travel and Ritz/Marriott Perks (Year 2+):
Airline credit: $300
Stay credit: $500
Priority Pass membership: $200
Elite status: $500
Club upgrades: $600
Visa Infinite: $200
Annual Fee: $450
TOTAL VALUE: $1,850

As you can see, the card is a no brainer in year one for all potential applicants thanks to the lucrative sign-up bonus. However, in year two and beyond, the card loses a lot of luster for someone who won’t regularly stay at Ritz and/or Marriott locations. There are two main drivers of this value:

1. The elite status: Marriott/Ritz-Carlton Gold status is one of the most lucrative mid-tier statuses out there, and getting it automatically for a year can be quite valuable. Beyond that, I’d say it’s definitely worth spending $10,000 per year (just $833.33 per month) to maintain that status in subsequent years. Whether it’s worth it to push for the $75,000 threshold and automatic Platinum status is really up to you.
2. On-property benefits: The final aspect that’s truly unique to this card is the collection of benefits when you book a paid stay at a Ritz-Carlton property. Club Level rooms often sell for a premium of at least $100 per night and may include some extensive food and drink displays throughout the day. If you’re paying an eligible rate for either a Club Level upgrade or a $100 credit toward incidentals, the card can easily pay for itself over the course of the year.

If you’re loyal to one (or both) of these brands and really see yourself staying in Ritz-Carlton properties several times over the course of the year, I think this card should definitely be in your wallet. The rest of the perks (like the $300 statement credit and Priority Pass membership) are just gravy after that. However, if the travel perks matter more to you and you’re looking for added flexibility in where you can book hotel rooms, I think both the Citi Prestige Card and the Chase Sapphire Reserve Card are better options.

Bottom Line

Chase made some really solid changes to the Ritz-Carlton Rewards Card earlier this summer, and the card is now even more appealing to travelers who are regular guests at Ritz-Carlton (and/or Marriott) properties. With an enhanced sign-up bonus plus many new and improved perks, the value proposition on the card has become even stronger. Just be sure to crunch the numbers and evaluate your upcoming travel plans. While the three complimentary nights make the card a great option for the first year, you’d probably need to have a least a handful of paid Ritz-Carlton stays in subsequent years to really get solid value out of the card.

For more information on the card and the Ritz-Carlton Rewards program, be sure to check out the following posts:

Source: thepointsguy.com