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Note: As of August 11, 2015, the AMEX Starwood Preferred Guest cards NO longer add foreign transaction fees!
Million Mile Secrets reader, Gary, commented:
I’m staying at the Sheraton in Port Douglas, Australia. If I use my Starwood Preferred Guest card there will I still get hit with a 2.7% foreign transaction fee? Starwood points are hard to earn!
Using the Starwood Preferred Guest card from American Express to pay for stays at Starwood hotels is a great way to earn valuable Starwood points. But you’ll be charged a ~3% foreign transaction fee when you’re outside the US.
I’ll explain when it might be worth it to pay the foreign transaction fee. And why it is usually NOT.
Should You Pay the Foreign Transaction Fee?
Starwood points aren’t easy to get! You can earn them by staying at Starwood hotels. Or from sign-up bonuses and spending with the Starwood Preferred Guest card from American Express.
You’ll earn 2 Starwood points per $1 you spend at Starwood hotels, for a total of 4X Starwood points, when you charge your stay to your American Express Starwood Preferred Guest card.
And if you have Gold or Platinum elite status with Starwood, it goes up to 5X Starwood points per $1 you spend.
But it also has a ~3% foreign transaction fee. So Gary WILL have to pay that fee when he uses his Starwood AMEX in Australia. Even when he uses it at Starwood hotels!
Paying an extra ~3% on your hotel stay to get an extra 2 Starwood points per $1 cancels out the value of the points. And you will earn 2 Starwood points per $1 you spend at Starwood hotels from being enrolled in the Starwood Preferred Guest program.
Say your hotel stay and expenses cost $1,000. You’ll earn an extra 2,000 Starwood points if you pay with your Starwood AMEX. But you’ll also pay $27 in foreign transaction fees ($1,000 X 2.7% foreign transaction fee).
If you need the extra 2,000 Starwood points for your next award stay, or want to transfer them to 1 of their airline partners to earn bonus miles and an award flight, it could be worth it to pay an extra $27. But it’s usually NOT.
Instead, you could pay with a different card and earn 2,000 points with another program. And NOT pay any extra fees. I’ll explain in a bit!
Where It Might Be Worth Paying Foreign Transaction Fees
There are 3 situations where it could be worth paying the foreign transaction fee.
1. To Meet a Minimum Spending Requirement
If you are close to meeting your minimum spending requirement, the bonus you’ll earn will far outweigh the cost of paying the foreign transaction fee.
However, with so many ways to meet your minimum spend, this should be considered a last resort.
2. You’re Close to an Award Stay
If you’re a few Starwood points shy of an award booking at a Starwood hotel, you might decide to pay the foreign transaction fee. Because the extra Starwood points will get you Big Travel at a Starwood hotel.
And you’ll save more money on the award stay than the cost of the foreign transaction fee.
3. You’re Close to a Free Flight
If you’re close to having 20,000 Starwood points, the 5,000 mile bonus can be worth paying a foreign transaction fee.
There Are Better Options!
Link: Chase Sapphire Preferred
Link: Citi Prestige
Outside of the 3 situations above, I recommend putting your Starwood hotel stays on a credit card that has NO foreign transaction fees.
The Chase Sapphire Preferred earns 2X Chase Ultimate Rewards points per $1 spent on any hotel – no matter the location. Chase Ultimate Rewards points are valuable because you can transfer them to great partners such as United Airlines and Hyatt.
And because both have no foreign transaction fees, they are better to use internationally than the Starwood Preferred Guest Card from American Express.
The Fastest Way to Earn Starwood Points
The sign-up bonus of 25,000 Starwood points when you open the Starwood Preferred Guest card from American Express and complete the minimum spending requirement is the fastest way to begin accumulating Starwood points.
Folks love Starwood points because of the 5,000 mile bonus when you transfer 20,000 Starwood points to these airlines:
|Starwood Preferred Guest Airline Transfer Partners|
|Air China||Air New Zealand||Alaska Airlines|
|Asia Miles (Cathay Pacific)||Asiana Airlines||British Airways|
|Etihad||Flying Blue||Gol Smiles|
|Hainan Airlines||Hawaiian Airlines||Iberia|
|Japan Airlines||Jet Airways||Korean Airlines|
|LifeMiles (Avianca)||Miles & More (Lufthansa)||Qatar Airways|
|Saudi Arabian Airlines||Singapore Airlines||Thai Airways|
|United Airlines||Virgin Atlantic||Virgin Australia|
In the summer, American Express usually runs a promotion where you earn a sign-up bonus of 30,000 Starwood points. But no guarantees whether it will return in the coming months!
If you’ve ever received the bonus on the personal version of the Starwood Preferred Guest American Express, you are NOT eligible to receive it again. American Express recently changed their policy to award the bonus on ALL of their personal cards once per lifetime.
But with all American Express business cards, including the Starwood Preferred Guest business card, you can earn the sign-up bonus again if you haven’t held the card for at least 12 months.
So keep this in mind when you apply for an American Express card. And if you’re feeling lucky, you might wait to see if the 30,000 Starwood point bonus will return this summer!
Other Ways to Earn Starwood Points
1. Ride With Uber
You’ll earn 1 Starwood point per $1 you spend riding with Uber, up to $10,000 per calendar year. And you’ll earn more if you have elite status with Starwood – up to 4X Starwood points per $1 when you use Uber while staying at Starwood hotels.
2. Fly With Delta
And you’ll earn 1 Delta mile for every $1 you spend on a Starwood stay if you have any elite status with Delta. Remember you get Starwood Gold status as a benefit of the American Express Platinum Card.
3. Fly With Emirates
Similar to Delta, Emirates has a partnership with Starwood Preferred Guest called Your World Rewards. Starwood Gold and Platinum members earn 1 Starwood point per $1 spent on Emirates flights, in addition to the Emirates miles you’ll earn for flying.
And you’ll earn 1 Emirates mile for every $1 you spend on a Starwood stay if you have elite status with Emirates.
4. Stay at Caesars Hotels
5. Rent a Car With Avis or Sixt
It’s usually NOT worth it to pay the ~3% foreign transaction fee when you use the Starwood Preferred Guest card from American Express at Starwood hotels overseas.
But there are a few situations where you might consider it. Like if you are close to an award stay. Or if you want to transfer 20,000 Starwood points to receive 5,000 extra miles with airline partners.
There are other ways to earn Starwood points in addition to staying at Starwood hotels. So don’t feel like you have to pay the foreign transaction fee!
Although it won’t be around much longer. Because on August 11, 2015, the AMEX Starwood Preferred Guest card will drop the fee!