Buying IHG Points for .7 Cents/Point

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This is post #3 of a series regarding the InterContinental Hotel Guest (IHG) program. 

InterContinental Hotels Group (IHG) allows you to purchase up to 120,000 points per calendar year per account. The more points you buy, the less it costs. The cheapest option to purchase points through the normal process is 1.15 cents per point. For most redemption opportunities this is quite expensive and most likely doesn’t make sense.

However, there is a roundabout method to purchasing points where you can “purchase” them at a fixed .7 cents per point. If you’ve ever made a points redemption with IHG you will see that there are two “Cash & Points” option that allows you to use some points and some cash to get the “free” night.

IHG PointsAssuming availability, there is always an option that allows you to pay X points + $40 or X points + $70. The $70 option is the lower redemption rate allowing you to purchase that room with the cash portion being valued at .7 cents per point. The other option is valuing the cash portion slightly higher at .8 cents per point. This is the same value regardless of the hotel category.

Now, the roundabout method is that if you need to cancel the reservation made with both cash & points, IHG does not have it set up to give you the cash portion back to your credit card. The cash portion paid is given back to you in points. So if you booked the option that cost $70 the difference in points paid vs. if you paid only points is 10,000 points. So instead of getting back $70, you are getting back 10,000 points which is equivalent to .7 cents per point.

While this is not good for those that want the cash back, it is a nice roundabout method to always be able to purchase points at .7 cents per point and not having to worry about that 120,000 points per year cap.

The one caveat is that to do this you must have at least 5,000 points in your account as that is the minimum amount required to purchase a cash & points “free” night. Some hotels require much more than 5,000 points to redeem a cash & points redemption and while this will ultimately get you the same value for the cash portion paid, if you are starting from scratch, you’ll want to search for hotels that only require 5,000 points. You can accrue 5,000 points quite easily – you can learn more about the various ways to earn IHG points here or you can always purchase the minimum amount required if need be. Also, make sure the hotel has a free night available prior to accruing so many points.

While .7 cents per point is much better than the typical method to purchase points, make sure to do the math to make sure it makes sense for your upcoming stay. While some hotels will definitely not make sense, there are a few select hotels where you will almost always save money by purchasing and redeeming points than paying for the best available rate. Also, there are times when IHG offers a bonus for purchasing their points and in those scenarios it is sometimes less expensive to buy points through the traditional method. For example, last fall you could purchase points for up to a 100% bonus! This meant buying points as low as .57 cents per point. You also can purchase points at a cheaper rate during this years Daily Getaways promotion.

Scenario where purchasing points definitely makes sense…. The InterContinental hotels in Tahiti and surrounding islands. For example, the InterContinental Le Moana Bora Bora costs $520 on this random date I selected. Or, you can redeem 50,000 points for a free night. At .7 cents a point this will cost you only $350/night. And remember, when you pay with points it includes tax.

IHG PointsThis roundabout method usually works well for expensive InterContinental hotels internationally, but can also work for some low category hotels that have a high nightly rate during conferences, festivals, peak times, etc.

Lastly, if you have the IHG co-branded credit card, you get 10% of your redeemed miles back. So if you are looking to purchase points and have the card, you can really think of this as buying points for even less due to the rebate. This means purchasing points at .7 cents per point really costs .63 cents per point when you include the rebate which can be used for a future stay!

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9 years ago

It’s worth mentioning that award stays don’t incur taxes. Not only does it tip the scales in borderline redemption scenarios, but your points can act as a get-out-of-jail-free card if you ever come across areas that have outrageous hotel taxes.

9 years ago

How do you come up with .8 for the $40 scenario?

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