The Virgin Atlantic Credit Card: Your Route to Cheap Hotel Stays?

While the Virgin Atlantic credit card from Bank of America touts a big bonus offer of up to 90,000 miles, few will find the card compelling as a way to fly on the cheap. That's because Virgin Atlantic charges big fuel fees on most of their compelling award redemption routes, meaning you go through the trouble of finding award availability but still end up paying hundreds and hundreds of dollars for your flights. Still, there is potential in this card to create valuable travel savings by transferring those points to Hilton or IHG. In this post, I'll analyze the benefits and help you decide which program is right for your transfer.

First, the Basics of the Virgin Atlantic Credit Card Bonus Offer

As you can see in the table I've created below, you'll have to jump through several hoops in order to get all of the VA bonus miles. The most challenging of these is spending $12k in six months. Most people just aren't going to be able to spend that amount, at least, not without forgoing other lower-hanging fruit in the miles and points universe. That being said, between promotions from Plastiq.com for lower fees to pay rent/mortgages by credit card and the upcoming tax season, there are ways to supplement normal spend.

You'll have to pay the $99 fee in the first year and add two authorized users to your account, which are both bummers, but worth the effort. To pick up the anniversary bonus miles, you'd have to spend an additional $3,000 and wait until the end of the first card year (and probably pay the annual fee a second time). If you were to spend that extra $3k, you'd earn 105,000 miles, but at the opportunity-cost of another credit card bonus and potentially a $99 annual fee. Though most bloggers suggest you do this, I don't think it's worth it, so the 93,000 total in the chart below is based on $12k in spend. Since you'd be earning those last few thousand points at a much lower rate and you are only allowed to transfer 100,000 VA miles per year anyway, I just don't see the value.

What are your 93,000 Virgin Atlantic Flying Club Miles Worth in Hotel Points

Now that we know we can earn 93,000 VA miles by spending $12k in six months, let's analyze our hotel transfer options:

Hilton: A 2:3 transfer rate from VA to HiltonHonors results in about 140,000 hotel points. Hilton points are often valued at between 0.4-0.6 cents per point, which means approximately $700 in Hilton stays.

IHG: A 1:1 transfer rate from VA to IHG results in 93,000 hotel points initially, but as of last known data point, this transfer triggers the earning of Spire Elite status (IHG's top-tier status), which comes with a 25,000-point annual bonus. That means you should receive 118,000 IHG points for when all is said and done. I have consistently redeemed IHG points for 0.7cpm, that means approximately $825-worth of IHG hotel stays and top-tier status.

In other words, if you were to spend $12k on the Virgin Atlantic credit card, you would earn 5.8 cents per dollar spent to use at Hilton or 6.9 cents per dollar spent to use at IHG. As a point of comparison, you could earn 42 cents per dollar by signing up for the current IHG credit card (60k points after 1k spend) or 37.5 cents per dollar by signing up for the current Hilton credit card (75k points after 1k spend).

Why I Still Feel There is Value in This Transfer Proposition

While you could are certainly better served by signing up for a Hilton or IHG credit card, many miles and points hobbyists have long ago blown threw those sign-up bonuses. With tightening restrictions on credit card churning, this transfer makes earning many more hotel points a possibility. Here's a full list of value propositions:

1. The Virgin Atlantic card is not limited by "5/24" (like the Chase IHG card) or "one bonus per lifetime" (like the AMEX Hilton card), which means we can continue to earn these points each year.
2. For those who've already signed up for the easy IHG and Hilton card bonuses, this is a way to top-up accounts and continue to travel at reduced cost after the easy pickings have been taken.
3. Transferring to IHG triggers the top-tier status designation, which means better service, nicer rooms, and various other perks.
4. There are still outsize redemption values to be had, such as category one or two redemptions with Hilton. For example, 140k Hilton points is enough for at least 16 nights at a beautiful Hampton Inn & Suites in the center of Mexico City...those nights would cost between $1,200-$1,800 to book with cash. IHG has its point-breaks promotion every few months, where you can book even some of their Intercontinental properties for only 5k points per night, so you could theoretically spend 23 nights in a $50-$100 hotel with the 118k IHG points you'd earn with this transfer, so that would be a minimum of $1,150 in value.
5. While you could sign up for several credit card bonuses (averaging $400-$600 in value per sign-up) with $12k spend required here, that is also several hard-pulls on your credit and more card accounts to manage. You can even combine your hard-pull on this card with getting an Alaska Air card by applying on the same day.

Real-Life Application: How I am Considering Using this Transfer Strategy

I've already had all the Hilton credit cards and currently hold the IHG card, so I fall into the category of people that can benefit most from this Virgin Atlantic miles transfer to hotel points. I've got more Hilton points stockpiled and my Hilton Diamond status is coming to an end in March 2017, so I'm leaning heavily towards the IHG transfer.

My IHG Spire Elite status also expires in March of 2017, so if I time this transfer to occur in the beginning of 2017, I can extend that status through the end of 2018! I have stayed at several Holiday Inns and Holiday Inn Express hotels, as well as a Hotel Indigo property since I initially got Spire status. I have been upgraded to a suite or nicer room approximately half of the time, made good use of early check-in and late check-out on several occasions, and received welcome amenities (bottled water, cookies, etc.) or bonus points during each stay. While not life-changing, top-tier elite status is a valuable commodity.

With 118,000 points I will be able to significantly reduce my hotel expenses in the next year or two while enjoying the elite treatment. My redemptions have averaged about 20k points each, so I expect to get at least 6 nights in some very nice hotels for just the $99 card fee, or I could pair these points with my free-night cert from the IHG card to do a truly grand 4-night stay at a resort like the Intercontinental Fiji.

How I'd Likely Meet the Minimum Spend & Some Example Valuations

Since $12k in minimum spend over six months would stretch my spending ability and limit my opportunities to sign up for other bonuses, I'll probably use the card to pay for $6k of my federal income tax. At the rate that's possible through government-approved processors (1.75%), that means I'll pay $105 for IHG points worth about $825 or a savings over 85% on hotel stays. Theoretically, if I found an IHG point-breaks hotel or two to maximize the value of these points, I could stay for 23 nights for $105 + $99 (credit card annual fee), which works out to $9 per night.

Taking it to the maximum, a couple who wanted to go to Colombia for a month and a half of Spanish language immersion (and/or to learn dancing in the salsa capital of the world) could each sign up for this card, meet the minimum spend like me, and base themselves in the Intercontinental Cali, which is currently on IHG point-breaks for 5k points per night. Thanks to Spire Elite status, they would receive a nice room, free breakfast, and VIP treatment for $9 per night. Paired with the extremely favorable currency exchange rate, the cost of such a trip would be very minimal; if the couple were to rent out their current residence, they would probably even turn a profit!

The Bottom Line

While there are certainly easier and more lucrative credit card bonuses out there, the Virgin Atlantic credit card does provide opportunities for significant value in the realm of miles and points collectors, especially for those who have been in the game for a while or have need of hotel points. I'll probably be taking advantage of this opportunity myself.