The Enduring Value of the Starwood American Express Card

Key Links

• Starwood American Express
  
• Starwood American Express Business Card
  
• Chase Sapphire Preferred Visa

I’ve been recommending the Starwood American Express card for years, I first got it in 2001 and it’s held a place in my wallet since then. I think I must have converted a Delta card, since my ‘member since’ date is 2000 and I don’t think I had an Amex card, at least continuously, before that.

Deals We Like recently extolled the virtues of the Starwood American Express card as a tool for earning airline miles through credit card spend. This is a very reasonable take, because:

• Starwood has a large number of airline transfer partners, far larger than American Express Membership Rewards and Chase Ultimate Rewards.
  
• Starwood points don’t transfer one-to-one (except to United/Continental where it’s two-to-one, but for Star Alliance awards just transfer to another partner like US Airways), they add in a 5000 mile bonus when transferring points to 20,000 miles. That’s a 25% bonus on every 20,000 miles transferred.

It’s hard to downplay the value and importance of their myriad transfer partners. They even transfer to both Emirates Skywards and Japan Airlines Mileage Bank — two options you won’t often use, until of course you really really want to book Emirates first class awards on an A380 (onboard shower!).

The value is both earning power — the American Mastercard earns 1 mile per dollar spent, the Starwood Amex effectively earns 1.25 miles per dollar spent (including transfer bonus), and at a lower annual fee — and about flexibility, when you use the American Mastercard you have American miles, when you have the Starwood Amex you have your choice of hotel stays or miles in most frequent flyer programs. And you get to choose later.

Deals We Like acknowledges that the signup bonus on the card is ‘only’ 25,000 points. Which, transferred to most airlines, is 30,000 miles (or 3 nights at the Westin next door to my office, and that can be stretched to a week with the cash and points redemption option).

That’s certainly not as attractive as a 75,000 mile or 100,000 mile signup bonus offered recently with the American card, and the best current signup bonus offer of 50,000 miles is bigger as well.

But this underscores a very important point — there are essentially three types of credit cards you might carry:

1. Credit cards you get just for the signup bonus. Grab the 100,000 miles or 50,000 miles and run. They reward you richly for getting the card, but the value of putting actual spending on the card is fairly low. I put the American Airlines Mastercard/Visa/Amex squarely in this camp.

2. Credit cards you get for the benefits rather than the points. Again, you hold the card but you don’t put more spending on it than you need to. Good examples are American Express Platinum for the lounge access (and for some, the ability to charge very large sums), Alaska Airlines Visa (for the $99 companion ticket that’s valid even in first class), Hilton Surpass American Express ($40,000 in spend earns Diamond status), and airline and hotel co-branded cards where you need nights, stays, or elite qualifying miles earned based on spending in order to achieve status with the program.
   
3. Credit cards you actually want to use for expenses. And Starwood American Express is one of those. It’s a better bonus than it used to be, I didn’t even get a bonus over a decade ago when I first acquired the card. But it’s really about good return on spending.

Note that the best current offer for the American Express Platinum card I’m aware of comes with 25,000 Membership Rewards points at signup. There was a recent offer for 50,000 points that says it’s expired. Some folks have gotten 50,000 points for the $25 more expensive Mercedes Benz co-branded credit card. But again, this is a card mostly for the benefits of having it rather than for the spend. (Update: in the comments Jared provides a link that is working for the 50,000 point signup bonus for American Express Platinum.)

But back to the card at hand, it’s worth pointing out some drawbacks. They don’t offer much in the way of earning bonuses, there’s effectively a perpetual 25% transfer bonus in effect but they aren’t going to reward you double or triple points for gas and groceries.

And transfers to airline programs can take awhile, for instance transfers to American generally take 5-7 days and seem to post only on Wednesdays. The ability to transfer points is phenomenal, but it’s not as though you can generally put an award seat on hold and then transfer the points in from Starwood. You very much run the risk that if you find an award and transfer points, by the time those points are available the seats could be gone. It’s a card you make with in advance, rather than reacting on the fly to specific mileage award availability.

To me, the card is part of my core portfolio.

I use Chase Sapphire Preferred for non-Starwood travel spend (and I happen to use the American Express Premier Rewards Gold for airfare, but that’s a niche need I have). I use it for restaurant spend. Sapphire Preferred bonuses those categories at 2 points per dollar. And of course Sapphire Preferred also earns a 7% annual bonus on all points earned. I also use the card for transactions outside the United States because it doesn’t add foreign currency conversion fees (I even used it last month at two Hilton properties, even though the Hilton Surpass Amex earns 9 HHonors points per dollar, I’ll take 2 Chase Ultimate Rewards points and no foreign currency conversion fee over 9 HHonors points and such a fee. And I”ll transfer the points over to United or Hyatt). Finally I use the card with merchants, like my dry cleaner, who don’t take American Express. For this level of usefulness I even asked whether it’s the king of credit cards.

Since I do have the Amex Premier Rewards Gold, that gets gas and groceries too since it bonuses that spend. But otherwise most of the rest of my spending goes on the Starwood American Express. Because I’ll take 1 Starwood point (1.25 miles in lots of programs, transferring slowly) over 1 Chase Ultimate Reward point (1.07 miles in a limited number of programs, transferred to anyone’s account that I wish instantly).

I do have specialty cards, the ones for the signup bonuses (and I put spending on to meet minimum spend requirements) and the ones for the benefits (Amex Platinum, Hilton Surpass Amex for instance and I may have to get myself a Citi Executive card for the elite qualifying miles). But those aren’t about what I put spending on, at least more than I have to in order to earn the benefits, since they’re about the benefits not the points.

Now, I’ve also had the Starwood American Express small business card. I signup up just for the bonus points when the card was still on offer. I cancelled it, moving the credit over to other cards, not realizing some of the benefits I’d be missing out on. Having waited a few years I may try to get the card (and concomitant signup bonus) again.

See, I didn’t fully realize the value of automatic discounts through Amex’s small business program that the Starwood small business card is a part of. You can double dip with coupons and miles and still get 5% cash back in the form of a statement credit sending flowers through 1-800-Flowers. If you pay for Hyatt stays with the Starwood small business Amex you get 3% back. Earning one Starpoint and 3% cash is probably better even than putting Hyatt charges on a Hyatt Visa where the bonus Is 3 Gold Passport points per dollar. Or at least it’s a very close call. Several more discounts apply that I could be taking advantage of automatically with this card.

Since both the personal Starwood Amex and the small business version offer 2 stays and 5 nights towards status, and you can have both cards and earn both bonuses, from credit cards you can be 4 stays or 10 nights on your way to elite levels. And with award nights counting towards status, a high-spending American Express cardholder could earn Platinum status off their card membership and redemptions.

There’s a reason this card has held a strong place in my wallet for more than a decade.

For years my number one recommended credit card has been the Starwood American Express. To be sure, using the credit card links in this post now will earn me a referral credit. I can only imagine how many thousands of card signups took place where I told Amex just to keep that since I wasn’t set up to receive those. You don’t have to use my link for the card, of course, but it’s the best-available offer that I’m aware of and I certainly appreciate it.