It's easy to be overwhelmed by the sheer amount of alternatives available when you're attempting to acquire a new credit card that offers travel rewards when you're in the market for one. You can get a general travel credit card, which will allow you to collect points that can be used for various travel incentives. You can sign up for a co-branded airline credit card, which allows you to earn benefits that are particular to the airline. Then there are hotel credit cards and rewards cards that enable cardholders to accumulate points and other benefits by purchasing at a particular hotel chain.

Advantages

The most significant benefit of using a credit card issued by a hotel is the opportunity to collect hotel rewards points for every dollar spent using the card. These points are often provided in addition to the rewards you receive just for making a reservation for a paid stay with a hotel.

If you are a Hilton Honors loyalty program member, for instance, you are eligible to earn 10 Hilton Honors points for every dollar spent on Hilton brand hotels. This is true regardless of whether you pay with a credit card that offers rewards. However, if you sign up for the Hilton Honors American Express Aspire Card and use it to pay for your hotel booking, you will earn an additional 14 Hilton Honors points for each dollar you spend. This will bring your total number of points earned with the card to 280. Other potential benefits of hotel credit cards include the following:

Free nights

You may redeem your points for free hotel stays later and earn points. When you sign up for some hotel credit cards or renew your card after the first year, you may get a free night's stay simply for using the card. However, there are often restrictions associated with these "free evenings." It's possible, for instance, that you can only use them on weekend nights or that you may only redeem them for hotels that charge a certain amount of points each night.

Elite status benefits

Certain hotel credit cards provide something called "elite qualifying nights," which may help you achieve elite status in the hotel's loyalty program. This allows you to move up the elite status ladder more quickly. Even if you don't use the credit card often, merely applying for a certain hotel credit card might get you automatic status at the hotel. This applies whether or not you use the card.

Hotel perks

It is important to note that some of the most premium hotel credit cards come with enticing incentives, such as yearly resort credits, airline credits, and maybe even airport lounges.

Drawbacks

A plethora of advantages come with carrying a hotel credit card, but there are also a few significant disadvantages associated with doing so. The points you receive via participation in these programs may not be as versatile as those you might collect using a standard travel credit card.

Let's pretend for a second that having a credit card co-branded with Hyatt allows you to accumulate points in the World of Hyatt program. In that scenario, you would be able to exchange your points for complimentary stays at hotels that are part of the World of Hyatt umbrella, or you could exchange your points for stays at Small Luxury Hotels of the World. The following are some of the additional drawbacks associated with hotel credit cards, in addition to the limited flexibility of point redemption:

Annual fees

The annual fees for the hotel credit cards that provide the greatest perks are often rather substantial, and it is possible that these costs will not be waived during the first year that you have the card.

Limited award availability

Even though there will always be exceptions, redeeming hotel points may be challenging. This is particularly true if you must travel during peak travel seasons, during which award availability may be restricted. If you travel with children and want a room that can accommodate more than two people, using your hotel points might be difficult.

Inflexible rules

The free nights you earn can come with restrictions on when you can use them or what hotels you can spend them at if you want to redeem them for a stay at a different hotel. Additionally, yearly resort credits can only be redeemable at certain hotels, and you might have to utilize them or lose them. This means that if you cannot stay at a certain hotel brand throughout a cardmember year, your credit won't be carried over to the next year.