I don’t know if you’ve heard yet, but Amex has the Deal Of The Millennium(™) going on right now! The Amex Starwood Preferred Guest card usually offers only 25,000 bonus points for signing up, which is functionally equivalent to being punched in the face. But right now, for a limited time and on an annual schedule that’s completely predictable, they’ve increased it by 5,000 extra points, thus making it the greatest offer ever and not unremarkable at all!
You know, sometimes these Devil’s Advocate columns write themselves.
Yes… SPG Starpoints are valuable. Yes… 30,000 bonus points is as high as the signup bonus ever goes on this card. And yes… it might be worth adding an SPG card to your next app-o-rama if it happens to match your application schedule and points needs.
But jeez, could everyone just calm down about it a bit?
SPG Starpoints are not the be-all and end-all of the points and miles universe. They’re a potentially valuable part of an overall loyalty program strategy, but I don’t know anyone who thinks they should only be collecting Starpoints and nothing else.
In fact, I already covered a lot of the negatives of Starpoints in my series last year on the downsides of all the flexible loyalty currencies (see “Wait, Maybe SPG Starpoints Are The Worst Points Ever“) and I don’t want to repeat myself here, even though that would make things super easy and I would be able get back to my primary task of waiting impatiently for football season to start.
So what more is there to add? Well, since we’re still in the boring preseason games…
How much are 5,000 extra Starpoints even worth?
A lot of folks overvalue SPG points in general, but that’s an argument for another time. Here at Travel Codex, our fearless leader Scott puts Starpoints at about 2.5 cents per point so let’s use that as the basis for our calculations.
At 2.5 cents per point, those extra 5,000 points are worth $125. Fine. Great. If you were planning to get an SPG card, you might as well do it while you can pick up an extra $125 in value.
But is that extra $125 worth going out of your way? I doubt it.
Earlier this year I wrote a post called “How Much Is a Credit Inquiry Worth?” and the general reader consensus was that a credit inquiry was worth a lot more than $100 unless it was $100 in actual cash. A month later I discussed the Hyatt 20% points rebate promotion in “Why You Shouldn’t Get a Hyatt Visa for the 20% Rebate” and explained that the real question was whether the 20% rebate alone was worth at least $100, since we could get the standard offer on the Hyatt card anytime.
Both of these past posts play a role in our argument today. Again, if you already had an SPG card on your list, then go ahead and get it with the higher bonus. But if you weren’t planning on getting an SPG card, should the extra 5,000 points alone change your mind? Is $125 in extra points worth a credit inquiry hit that you wouldn’t take otherwise?
Based on my past arguments (and reader reactions to them), the answer is clearly nope.
20,000 Starpoints = 25,000 airline miles = so what?
Conventional Wisdomers always like to point out that Starpoints can be transferred to a whole bunch of airlines and you get a 5,000 point bonus for each block of 20,000 points transferred. That effectively means all spend on this card is worth 1.25x Starpoints per dollar.
Fine. Great. But I can do better with a 2% cashback card. I can do better focusing on bonus categories. I can do better churning credit card signup bonuses.
As I said before, I’m not arguing that Starpoints aren’t valuable. They obviously are. But if you’re going to transfer Starpoints to another airline currency, there’s usually easier ways to rack up those specific currencies directly. United miles are easy to obtain via Ultimate Rewards points. American miles have practically been growing on trees in the past two years. And Delta miles are useless anyway, but if you’re a glutton for punishment and really want them for some reason, it’s pretty simple to pick up a bunch of Membership Rewards points and transfer them to Delta.
For me, the value in Starpoints is using them at actual Starwood hotels. That’s where they do in fact have great value, especially since Starwood is relatively generous in granting elite credit and benefits on award nights. Their Cash & Points program is often useful as well.
But for transferring to airlines? I think of that as a secondary benefit, not an argument to go out and amass millions of Starpoints or pick up an SPG card just because the bonus jumped a bit.
Increased annual fee > new benefits.
It’s clear Amex is aware that the SPG card has fallen behind the times, as they recently made a big show of rolling out several improvements, including no foreign transaction fees, Boingo Wi-Fi, and a pair of extra perks for when you’re staying at Starwood and/or Sheraton properties.
However, at the same time they increased the annual fee from $65 to $95. While that fee is waived for the first year, it means if you’re planning to keep the card you’ll need to accumulate $3,800 in spend per year just to get back to even. Fine. Great. $3,800 in a year isn’t a huge hurdle. But it’s $3,800 that could be charged to a no annual fee 2% cashback card like the Fidelity Investment Rewards Amex and result in $76 in cash instead.
Personally I don’t find the new benefits that enticing. No foreign transaction fee cards are practically ubiquitous, and Boingo is available on other better Amex cards. If you’re a regular at Starwood hotels and can use those extra hotel benefits, then you probably already have an SPG card or it was already on your list to get and this limited time 5,000 point bonus is just icing on the cake. But none of the new benefits make me any more eager to get this card.
The Devil’s Advocate says stick to the plan!
It’s easy to get distracted by all the limited time and bonus offers that come and go in the points and miles world. The key is to have a plan for your loyalty currencies and stick to it. There’s certainly a place for the SPG card and there are certainly folks out there who should get it. But 5,000 extra points shouldn’t be the primary reason.
I hope I’ve given you an honest look at this card and its limited time offer. If you think it through and decide that you do want an SPG card, then I’ll remind you that friends who already have an SPG card can refer you and get 5,000 SPG points for themselves. They can do that by going to this link and logging in to get personalized referral links for your application.
And if you don’t have a friend with an SPG card to refer you, I would humbly suggest that you get a referral from our fearless leader Scott here at Travel Codex. As Scott has mentioned in the past, Travel Codex doesn’t have a big role in the affiliate game, so if you like our content I’m sure Scott wouldn’t mind a few extra SPG points headed his way. You can e-mail him at email@example.com and he’ll send you a referral link for either the personal or business SPG card along with his undying gratitude.
(Note that I personally receive no compensation for anyone that signs up for an SPG card through any link whatsoever, though I’m sure they just love me so much over at Amex that they can’t wait to shower me with free SPG points. Or perhaps a cease and desist letter. We’ll see which one comes first.)Devil’s Advocate is a bi-weekly series that deliberately argues a contrarian view on travel and loyalty programs. Sometimes the Devil’s Advocate truly believes in the counterargument. Other times he takes the opposing position just to see if the original argument holds water. But his main objective is to engage in friendly debate with the miles and points community to determine if today’s conventional wisdom is valid. You can suggest future topics by following him on Twitter @dvlsadvcate or sending an e-mail to firstname.lastname@example.org.
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Find the entire collection of Devil’s Advocate posts here.