The AMEX SPG Credit Card is Overrated & Not Worth its Annual Fee to Me, But I’ll Still Get it! [Expired]

Signing up for credit cards through partner links earns us a commission. Terms apply to the offers listed on this page. Here’s our full Advertising Policy.

Update: One or more card offers in this post are no longer available. Check our Hot Deals for the latest offers.

Link:  American Express Starwood Refer a Friend 5,000 Point Business & Personal Referral

Link:  American Express Starwood 30,000 Point Personal Credit Card

Link:  American Express Starwood 30,000 Point Business Credit Card

The American Express Starwood (SPG)  personal and business credit card is offering 30,000 points up to September 4, 2012, though you should see if you can either refer or get referred for the card for an additional 5,000 SPG points.

I’ll certainly get both the personal and the business versions, because the regular offer is for only 25,000 points and the increased offer of 30,000 points has happened for only a month each summer over the last few years.  So this is as good as it gets.

But I certainly won’t be paying the annual fee and keeping these cards past the first year because the card doesn’t offer me any value after then.

It seems like every month there is a new “BEST CARD EVER!!” to have.  And while SPG points are valuable, this isn’t a card which I’ll keep when the $65 annual fee comes due.

Yes, cash and points are a great way to stretch out your points and get lots of value for hotel stays.  And, yes, Starpoints are transferable to a few airlines. But what happens when you run out of Starpoints?

Why the SPG Card Is Not Worth Keeping After the 1st Year

I’ve always been surprised when the Starwood card is touted as a great card to keep and how it is more valuable than your 1st born – because it isn’t to me!

Full disclosure – I represented the Starwood credit card at the Frequent Traveler University in April where it won the Best Credit Card in the Galaxy, but I still think that a combination of the fee-free Chase Freedom and any one of the transferable Chase Ultimate Rewards cards (Chase Sapphire Preferred, Chase Ink Bold, Chase Ink Plus) is a better choice for the average American who is not a Big Spender.

That’s because you can earn 5X Ultimate Rewards points on the Chase Freedom (a no annual fee card) which can be transferred to airlines or hotels, get additional Ultimate Rewards points through the Ultimate Rewards shopping portal, and pay no foreign exchange transaction fee on any one of the transferable Ultimate Rewards cards.

The Starwood credit card has been around for over a decade, and it was the leader at one point. But old preferences linger for long which I suspect accounts for some of its popularity today.

1.  Foreign Transaction Fee.  You have to pay a 2.7% foreign transaction fee which makes the card virtually useless to use outside the US (unless you are meeting the minimum spending to get the sign-up bonus) – EVEN at foreign Starwood hotels.

For example, you earn 2 SPG points per $1 spent at Starwood hotels, but will pay 2.7 cents in foreign transaction fees.

Instead, you could put your foreign Starwood hotel spending on the Chase Sapphire Preferred or Chase Ink Bold and earn 2 Ultimate Reward points (which you can transfer to, say, Hyatt) and not pay ANY foreign transaction fee.

2.  No Free Night Certificates.  The AMEX SPG card doesn’t offer a free night each year, unlike other hotel credit cards which makes it less useful to me. 3.   No Category Bonuses.   The card also doesn’t have any additional bonuses for spending on, say, gas, groceries etc, so it is hard to convert limited spending power into lots of points. 4.   Not a Big Spender.   Sure, I can get a 25% point bonus when I transfer my SPG points to airlines in increments of 20,000 points, which makes it a better card for some airlines than that airlines’ own co-branded card.

But let’s face it, I’m not a Big Spender and I’m NOT going to spend $20,000 on the card just so that I can get 5,000 extra miles if I decide to transfer 20,000 SPG points to airline miles.

As I tell folks during my introduction to miles and points at conferences: The average American household earns ~$50,000 a year, so if you spend everything on a credit or debit card, you’ll earn only 50,000 miles and points (assuming 1 mile per $1 spent), which is enough for only 2 domestic tickets.

The real pay-off is in using your limited spending power towards credit card sign-up bonuses.  It is not in spending $20,000 on 1 card just to get an additional 5,000 air miles!

To be clear – the ability to earn 1.25 miles per $1 spent is a VERY valuable benefit to Big Spenders, which I mention in my series on Big Spenders.  But this benefit is meaningless to the average person who is better off using his or her limited spending ability to get different credit-card sign up bonuses.

And sometimes, even real Big Spenders like Lucky, don’t spend much on this card!

5.  Miss out on Future Sign-up Bonuses. The terms of the Starwood  card suggest that you won’t get the sign-up bonus again if you have had the card in the previous 12 months.  So you may be better off getting the card, completing the minimum spending requirement and then cancelling the card so that you can get the card again in 12 months.

Some folks have had luck applying for the Starwood card sooner than 1 year by leaving their SPG number blank in the application, but I don’t have any personal experience with that and can’t vouch if it still works.

Hotel Credit Cards For Which I’ll Gladly Pay the Annual Fee

1.  Chase Priority Club card. The Chase Priority Club card is my favorite card to actually keep and to pay the $49 annual fee on because it give me a free night which can be used at ANY Priority Club hotel – including the $700+ InterContinental at Bora Bora.  No foreign transaction fees, either!  2.   Citi Hilton Reserve card.  I’d gladly pay the $95 fee after the 1st year on the Citi Hilton HHonors Reserve Card because I’ll get free Gold elite status which will get me free internet and breakfast and save me time as well as at least $10 to 30 a day.  Hilton points are easy to come by, so having free breakfast and internet when I use my Hilton points is a great perk.  No foreign transaction fees, either! 3.   Chase Hyatt Card.  I get a free night certificate for a category 1 to 4 Hyatt hotel each year, so I’d gladly pay the $75 annual fee on the Chase Hyatt card.  No foreign transaction fees, either!

Why you Should Keep the AMEX SPG Card

That’s not to say that no one should keep the SPG card.  You should keep the card if:

1.  You’re a Big Spender.  This is one of the best cards for everyday spending and will effectively earn 1.25 American Airlines, Delta, US Air and other airline miles when you convert SPG points to airline miles in increments of 20,000 points. 1.  You’re a Big Spender.  If you’re after American Airlines, Delta, or US Air miles and you don’t apply for new credit cards, but instead prefer to concentrate your spending on card, this card could be worth keeping.  That’s because you effectively earn 1.25 American Airlines, Delta, US Air and other airline miles when you convert SPG points to airline miles in increments of 20,000 points.

And, of course, the card is the best way to earn Starwood hotel points.

3.  You Chase Starwood Elite Status.  The card gets you 5 nights and 2 stay credit towards Gold or Platinum elite status, which could save you some money or give you more piece of mind if you sometimes book hotel stays just for the elite status credit.  4.  You stay at Starwood Hotels. You get 1 extra point when you use your AMEX Starwood card, so this could be worth it if you have lots of Starwood hotel stays in the US. Bottom Line:  I do recommend getting both the personal and business Starwood cards for the increased 30,000 point sign-up bonus (or 35,000 points if you can refer someone) up to September 4, because the regular offer for the other 11 months of the year is 25,000 points.

But do the math to see if paying the $65 annual fee on the card makes sense for you.  It doesn’t for me.

Or like me on Facebook or follow me on Twitter!

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

Join the Discussion!

Comments are closed.