No-Fee Hotel Card to Keep Rewards Active?

Usually no, a no annual fee hotel card is not worth opening just to keep a rewards account active, because there are often simpler ways to do the same job without a new credit check. The card does cost nothing each year, but it adds a hard inquiry, a new account to track, and a card that may sit in a drawer doing very little. Before you apply, it helps to check what actually keeps your points alive, because in many hotel programs the answer has nothing to do with a credit card.

Why do hotel rewards accounts go dormant in the first place?

Hotel programs want you to stay active, so many of them attach rules to your points. If you go too long without earning or redeeming, the points can expire or the account can be closed. Compare current no annual fee offers.

This is common across the rewards industry. A federal review of rewards-card issuers found that most had expiration policies tied to inactivity, with thresholds ranging from three to nine months of nonuse.^[1] Hotel loyalty programs are separate from credit card issuers, so their rules differ, but the idea is the same.

The key point is that the rules vary a lot. Some programs reset the clock with almost any activity. Others only count stays. So the first step isn't to open a card. It's to read the fine print on your own account.

Does a no-fee hotel card actually count as activity?

It depends on the program. In some, spending on the co-branded card earns points, and earning points counts as activity. In others, card points are handled separately and may not reset the clock on your hotel account.

Don't assume either way. Look in your account's terms for the words "activity" or "expiration," and see what is listed. If card spending isn't mentioned, contact the program and ask before you apply.

A card that sits in a drawer also has its own risk. Issuers can close accounts that go unused. One federal look at account closures in early 2020 found that about 0.8% of open credit-card accounts closed each month, and almost all of those were reported as creditor-initiated or due to inactivity.^[2] So a card you never use might not survive long enough to do its job.

Writing down your program's expiration window makes it easier to plan a small activity before points lapse.

What does opening one more card cost you?

No annual fee sounds free, but a new card still has a cost. The biggest is the hard inquiry. New credit accounts and inquiries make up 10% of a FICO Score, and one additional hard inquiry usually lowers most FICO Scores by fewer than five points.^[3] That's small, but it's not nothing if you're planning a mortgage or car loan soon.

There's also the mental cost. Every extra card is one more login, one more due date, and one more place for a missed payment to happen. A missed payment can hurt your credit far more than an inquiry.

And a new account lowers the average age of your accounts a little. If you have a thin credit file, that matters more than it does for someone with a long history.

What can you do instead of opening a card?

Try the cheap options first. Most hotel programs offer at least one low-effort way to reset the clock.

Here are common ones to look for in your program's terms:

• Book one stay, even a short one, if you travel anyway.
• Buy a small number of points or transfer a few, if the program allows it.
• Use a shopping portal, dining program, or partner offer tied to your account.
• Donate a few points or gift them, if the program counts that as activity.
• Redeem your points soon if the balance is small and you'd rather use them than protect them.

When does a no-fee hotel card make sense?

It can make sense when the card earns its place for reasons beyond keeping the account alive. Say you stay with that hotel brand twice a year and the card gives you a free-night perk or bonus points on hotel stays. Then the card is doing real work.

It also works if you'd put one small bill on it, like a streaming service, and pay it off automatically each month. That can help keep the card open and active, and you avoid interest by paying in full.

Here's a simple test. Ask yourself whether you'd still want the card if the account never expired. If the answer is no, skip it. If yes, the activity benefit is just a bonus.

These cards are generally recommended for good to excellent credit, so check where you stand before you compare options.

Frequently Asked Questions

Should I get a no annual fee hotel card just to keep my rewards active?

Usually not. A new card means a hard inquiry and another account to watch, and many hotel programs have other ways to keep points active. Read your program's activity rules first.

Does a hotel credit card keep my points from expiring?

Not always. Some programs count card spending as activity, while others only count stays or certain partner transactions. Check your program's terms to see what counts.

When does a no-fee hotel card make sense?

It can make sense if you'd use it for a small recurring bill, you stay with that hotel brand fairly often, and you're comfortable paying the balance in full each month.

Will an unused card get closed?

It can. Issuers may close accounts that sit unused for a long stretch. Putting one small charge on the card and paying it automatically each month may help keep it open.

Does opening a card hurt my credit?

A new card adds a hard inquiry, which usually lowers most FICO Scores by fewer than five points.^[3] It also lowers the average age of your accounts slightly.

What's a cheaper way to keep hotel points active?

Look for a small stay, a partner offer, a shopping portal purchase, or a small points transaction. Check your program's terms to see which ones count.

The Bottom Line

If your only goal is to keep hotel points from expiring, don't open a new card first. Read your program's activity rules, then try a small stay, purchase, or redemption. Those steps don't require a new credit inquiry.

If you'd use the card's perks or put a small bill on it anyway, a no annual fee hotel card can be a reasonable choice. Just make sure you'd want it even if the points never expired, and pay the balance in full each month.