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One of my main concerns as a travel hacker is determining when to use points / miles and when to spend money. As a result, I spend a lot of time analysing what air miles and hotel points are “worth”. This inevitably leads me to nudge readers in the direction of “good redemptions” and I try to avoid writing about “bad redemptions”.

I recently came across something I would instinctively ignore as a “bad redemption”, but the idea is intriguing enough that I thought I should dig deeper into its potential uses.

Buying Gift Cards Using IHG Points

You might have never bothered to click on the “Gift Cards” option offered by IHG Rewards Club. Because, quite frankly, you should already know that gift cards are going to provide poor value when compared to a free hotel night. Gift cards cost IHG more to provide than an otherwise empty hotel room…

I suspect that the main use of “Gift Cards” is by computer hackers who’ve accessed your account and want to cash out as quickly as possible, even though receiving $25 of Amazon.com credit in exchange for 11,000 points is cringeworthy…

The IHG Prepaid Mastercard

However, one of the gift cards on offer is a prepaid Mastercard that is only valid at IHG hotels. The gift cards come in denominations of $250, $500, $750 and $1,000 and are best used in the United States to avoid a poor exchange rate. But, as near as I can tell, UK residents are allowed to order the prepaid Mastercard. And despite the “meeting credits” phrase, you can spend your money on standard room rates, food charged to your room, etc.

For the purposes of this example, I’ll look at the $1,000 card (£770).

At first glance, $1,000 for 260,000 IHG points works out to 0.38 US cents per point. (0.3p)  This is substantially lower than the 0.5 US cents (0.39p) per point that I use when valuing an IHG point.

Why Might an IHG-Only Prepaid Mastercard Still Be Useful?

If you are familiar with British Airways’ “Part Pay With Avios”, you will understand that the main attraction is the ability to reduce the actual cash cost of a paid flight. The same idea applies here – you would be booking a paid room, with all of the advantage that entails, such as:

IHG Rewards Club Award Nights Are Capacity-Controlled

IHG hotels are only required to offer 5% of their rooms as award nights. At certain popular properties, it simply might not be possible to spend points for your stay. Spend those points for a prepaid Mastercard and you can book any available room.

Caring about the value per point only matters if you can actually book the award stays you want…

Ambassador Members Get Guaranteed Upgrades on Paid Stays Only

Intercontinental hotels have their own separate loyalty programme called Ambassador. There is also an invitation-only level called Royal Ambassador. In both cases, upgrades are only guaranteed when booking a paid rate. So, if you book an award night, you might get stuck with a view of the rubbish bins, but if you use a prepaid Mastercard to book a paid stay, you will get that Ambassador upgrade. Many Ambassadors strategically book room categories to ensure themselves an upgrade to a Club room with lounge access or even a suite…

You Will Earn More Points on Paid Stays

IHG Rewards Club members earn 10 points per US dollar spent. Members with elite status earn bonuses on top.

For example, a Spire member spending their $1,000 prepaid Mastercard on $900 of hotel rooms (the remaining $100 covering taxes, etc.) would earn 18,000 points from the room rate and 100% tier bonus.

You Should Earn Bonus Points from Paid Stays

Although IHG’s often-lucrative Accelerate promotion seems to be on hiatus, award stays would not qualify for the majority of targets you might be given.

However, by spending your $1,000 on paid stays, you can easily meet a few Accelerate targets without spending any of your own money. Even the current Double Points Plus More promotion would see you earn an extra 9,000 points.

You Can Earn Cashback on Paid Stays

Try as I may, I can never get a cashback website to pay me for my reward stays, as 8-15% of zero is zero.

But if I book an IHG paid stay – paying with my prepaid Mastercard – I will earn cashback on the paid rate, along with any of the little £2.50-5.00 bonuses you might be able to pick up on top…

Business Travellers Can Convert it… Ahem… Into Real Cash

If you travel for business, you probably pay for your own hotel stays and are reimbursed later by your employer or client. It won’t particularly matter whether you paid for your stay using your own credit card or a prepaid Mastercard; you will still receive a standard hotel invoice with which you will make your expenses claim.

Miles and points only retain significant value when you are willing and able to travel for leisure. 0.5 cents per point might be meaningless to somebody with no intention of staying at an IHG hotel on holiday. The sterling equivalent of 0.4 cents per point in your bank account might look much more appealing!

The Bottom Line

I won’t confuse matters by adding another example, but I’m confident that I could add all of the above elements together and reach a “value per IHG point” that is well in excess of my notional 0.5 cent valuation. I’m sure that some readers would argue that PointBreaks offers far more than 0.4p of value, but sometimes you end up with far more IHG points than you could ever realistically spend on PointBreaks stays near motorways and airports…

Have any readers tried the IHG Prepaid Mastercard? Have I missed something?