It seems that just about every day a new credit card is being released, with the latest being the “HSBC Premier World Elite MasterCard.”
This new credit card aligns with the likes of American Express Platinum and Chase Sapphire Reserve in its premium qualities, and unlike many other cards, allows points transfers to frequent flyer programs.
However, there’s one major, major hitch. You need to have $100,000+ in an HSBC Premier checking account or savings account. If you don’t, you’re not eligible to apply for this card.
So hopefully you’ve got $100k lying around, ready to be transferred over to HSBC. If so, you can apply.
And if you don’t maintain at least a $100k balance, expect to be hit with a $50 monthly maintenance fee for falling short.
If you feel you can muster all that, read on to learn more about this exciting new card.
50k Sign-Up Bonus with HSBC Premier World Elite MasterCard
First and foremost, you can earn a 50,000-point sign-up bonus when you spend $4,000 in the first three months from approval. Sound familiar? It should since it’s the exact same bonus as CSR.
Borrowing from Chase’s playbook, HSBC makes those points worth $750 when redeemed for air travel. In other words, they’re worth 1.5 cents apiece when redeemed that way.
Of course, you may not want to redeem your points for a mere 1.5 cents apiece because the HSBC Premier World Elite MasterCard also lets you transfer points to certain frequent flyer programs.
It’s unclear which airlines those are, but it might include British Airways, Etihad, Asia Miles and Singapore Airlines. The other big question is if the points transfer at a ratio of 1:1 or less.
HSBC Premier World Elite MasterCard Features 3-2-1 Bonus Categories
Like some other credit cards out there, HSBC Premier comes with a 3-2-1 bonus category structure whereby you earn:
– 3X points on travel
– 2X points on dining
– 1X point on all other purchases
This means you can earn points relatively quickly, assuming you like to travel and dine out, with no limit and no expiration. Ideally, companies like Uber and Lyft trigger that travel category…
Speaking of Uber and Lyft, you get a $100 annual statement credit for Uber and Lyft purchases, which is a lot more flexible than the $200 doled out by Amex Platinum.
[Also see the new Uber Visa Card for discounts on Uber.]
I say that because you can use it for either ridesharing company, and there’s no monthly limit that doesn’t rollover.
You also get another $100 Annual Air Travel Credit that can be used toward airline tickets! Not just incidentals like some other credit cards out there. It can also be used for seat upgrades, baggage fees, and in-flight purchases.
Along with that, you can take advantage of a $85 TSA Pre credit, but sadly no Global Entry credit. A little strange…
Another nice travel feature is a 10% discount when you book a hotel or vacation home stay on Expedia, Agoda, or onefinestay.
Lastly, you get some sort of airport lounge access as well, I’m assuming Priority Pass based on them saying access to “over 850 airport lounges.”
As you might expect, there are no foreign transaction fees charged on this card, but there is a somewhat hefty annual fee of $395. That’s $55 less than CSR and $155 less than Amex Platinum.
Each additional authorized user will set you back $65, which is fairly reasonable.
The card is also super cool looking, with a fierce lion emblazoned across the front of its black metal surface.
Let’s Do the Math Here
Assume you max out the travel credit of $100 and the Uber/Lyft credit of $100 twice before paying the second annual fee.
That’s $400 in value, enough to offset the $395 fee and get $5 in the black. That’s a good start.
Then you get the 50,000 points, which are good for at least $750 in airfare via the HSBC travel website.
You’re now looking at $755 in value, assuming you can’t do better by transferring the points to a frequent flyer program instead.
Seems decent, but then we have to factor in the $100,000 that is now stuck in an HSBC account likely earning very little.
Let’s pretend the amount of interest you can earn is negligible, maybe $50-$100 over the span of 12 months.
If you kept your money in an account earning say a more typical “high yield” of 1.25%, you’d earn about $1,250.
So you’re forgoing over $1,000 to move your money to an inferior checking account, at least in terms of yield.
And again, I’m just guessing here, I don’t know what HSBC actually offers to its customers. But it’s common for big banks to give very little, even with large balances.
If we consider that $755 or so in value you get from the card, then subtract the $1000 or so in foregone interest, you’re now in the hole.
Of course, if you’re able to time the whole thing and only leave your money in the HSBC account for a few months while you earn the sign-up bonus, you can reduce your losses.
But you’d want to apply around now, or ideally the very end of one calendar year to earn all the annual travel credits for 2017 and 2018, get your sign-up bonus, and get out.
For the record, HSBC says it could take 4-6 weeks for the bonus points to post to your account, so if that’s really the case, you might have to wait before canceling the card.
Ultimately, it doesn’t promote a longstanding relationship due to the simple loss of interest.
And might only encourage someone to time an application for year-end to take advantage of all the credits and sign-up bonus, before moving their money back into a higher yielding checking or savings account.
Update: Reader Ray says you can have the $100k in any number of HSBC accounts, including retail brokerage accounts, high-yield savings accounts, IRAs, and so on. So it might be possible to make out a lot better than I indicated above. But at the end of the day, you still need $100k at HSBC.
HSBC Premier World Elite MasterCard Pros
• 50k sign-up bonus for spending $4k in first 3 months
• $100 annual credit for airfare, baggage, in-flight purchases
• $100 annual Uber/Lyft credit
• Complimentary airline lounge access
• $85 TSA Pre credit
• Free Boingo Wi-Fi access
• 10% off accommodations booked at Expedia, Agoda or onefinestay
• 3-2-1 bonus categories for travel, dining, and other
• Ability to transfer points to frequent flyer programs
• Points worth 1.5X each if booking air travel via HSBC website
• No foreign transaction fees
HSBC Premier World Elite MasterCard Cons
• Requires HSBC checking account with minimum $100k balance
• $395 annual fee ($65 for each additional user)
• No Global Entry credit
• This list isn’t long, but that first one is a doozy!