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New Credit Card: Good Deal If You Like Hiltons

The new Citi HHonors Reserve Visa Signature credit card offers some features that you might like—but mainly if you stay at Hilton hotels often enough to take advantage. You can earn free stays relatively easily, and the card provides some useful upgrade possibilities and foreign travel benefits. But if you aren't fond of Hiltons, you can do better with other credit cards.

The newest card from Citi channels two big trends in today's credit card marketplace:

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  • Foreign travelers will like the chip implementation and lack of foreign surcharges.
  • Travelers who have given up on trying to find frequent-flyer seats will enjoy Hilton's more generous hotel-stay rewards.

POINT EARNING AND USE. The card awards three Hilton points per dollar charged to the card on general purchases, five points per dollar for airline tickets and rental cars, and 10 points per dollar—in addition to the stay points—for payments at Hilton hotels. But don't get all excited at the number of points per dollar: Each Hilton point is usually worth a lot less than a typical airline-mile point. How much less depends on where you use the points.

If you use your points toward hotel stays, your point value works out to a net return per dollar charged at somewhere between 1 cent (or a bit under) and 2 cents, with most values coming somewhat in the middle. The value gets higher if you spend a lot of money at Hilton hotels, where the 10 points per dollar gives a big payout on charges.

On the other hand, Hilton points have a relatively low value for other uses. Toward merchandise, for example, I figure that each point is worth between 0.005 and 0.01 cents, which converts to a payout of anywhere from 0.015 to 0.3 cents per dollar charged to the card. Similarly, 50,000 points gets you a $100 dining certificate at a number of restaurants, resulting in a cash value of 0.2 cents per point.

FOREIGN BENEFITS. I've written extensively about the fact that most of the rest of the developed world has switched from magnetic stripes to embedded chips ("EMV-enabled," in bank-ese) for security and verification. Accordingly, travelers from the United States, which has stuck with strips, often find that their cards don't work at all in automatic dispensing machines of various sorts, and only after an argument do they work at many restaurants, hotels, and merchants. Although I have heard no credible reason why U.S. banks have been so slow to adopt dual-function cards—with both a strip and a chip—the logjam has finally been broken, and U.S. banks are getting on board. Also, apparently for the same reasons, more and more banks are cutting the irritating 3 percent rip-off they add to foreign charges. Like Capital One, Citi's new card even absorbs the 1 percent international conversion fee.

OTHER BENEFITS. The new card really shines with additional benefits: two weekend-night awards if you charge at least $2,500 in the first four months; another annual weekend night after you charge $10,000, and automatic Gold status. Gold status is a great perk: upgraded rooms and a laundry list of other benefits and freebies that varies by hotel, including complimentary full breakfast at Hilton Garden Inns.

Unlike most other "loyalty" credit card programs, you can earn Hilton points on six different cards. My colleague at SmarterTravel, Tim Winship, compared this new card with others and found that it beat them for benefits. The main exception is that the new Citi card has a $95 annual fee; if you'd rather have a card with fewer benefits but no fee, try Citi's no-fee HHonors card.

If you're not familiar with Hilton, the corporate group now includes nine brands in price ranges from budget Hampton Hotels and Homewood Suites to luxury Conrad and Waldorf=Astoria. If you like the idea of earning hotel awards, give the new card a look.

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Ed Perkins Seniors on the Go is copyright (c) 2012 Tribune Media Services, Inc.

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