Replacing the Starwood American Express with the American Express Premier Rewards Gold card

I’ve gotta say, I never thought this day would come. I’ve long hailed the Starwood American Express credit card as the all around most rewarding credit card out there. You earn one Starwood point per dollar, which you can put either redeem for hotel stays or transfer to airline miles. I don’t stay at Starwood hotels often, so all of my Starwood points eventually get converted to airline miles. They have dozens of transfer partners, and when you transfer in increments of 20,000, they throw in a 5,000 point bonus. In other words, you’re essentially earning 1.25 miles per dollar. There is one big downside for me, though: the points don’t convert into miles instantly (or even remotely fast). It can take one to two weeks for many programs, which means you can’t find award space, put the ticket on a brief hold, and then transfer the points to ticket the reservation. Since it takes so long, you just have to transfer the points and then find the award space once the points post to the account. And that’s just very, very risky. When I see a single date the whole month that has availability on the flights I want, Starwood points aren’t very valuable.

Anyway, back to the point of this post. While I have quite a few credit cards, I only keep two credit cards in my money clip at a time (the rest are in my travel wallet), and 90%+ of my credit card spend goes onto those cards. For the past year or so, those two cards have been the Starwood American Express and British Airways Signature Visa card. I think the reasons for the Starwood American Express are obvious. I also like the British Airways card for a few reasons. First of all, it’s a Visa, for those retailers that don’t take American Express. Second, it has no foreign transaction fees, which saves me quite a bit of money when traveling abroad. Third, you earn a companion award certificate good for travel on British Airways when you spend $30,000 on the card annually. Now, redemption opportunities aren’t great for travel on British Airways due to the fuel surcharges, but it’s still nice flexibility. More importantly, I actually find the miles to be useful, thanks to the fact that they allow unlimited stopovers. 150,000 miles to Asia in first class on Cathay Pacific with a stopover or 80,000 miles to South America in business class on LAN with a stopover sound like good deals to me. The 1.25 miles per dollar you earn don’t hurt either.

But I’m thinking of dropping the Starwood American Express and replacing it with the American Express Premier Rewards Gold card, which I signed up for last week. The card offers three Membership Rewards points per dollar spent on airfare, two Membership Rewards points per dollar spent on gas and groceries, and one Membership Rewards point per dollar spent on everything else.

Now, I put a lot of money in air fare on my card, for family, friends, clients, etc. Say, theoretically, you spend exactly $30,000 per year in airfare on the card. That would earn you 90,000 Membership Rewards points (for the simple three points you earn per dollar). That’s incredibly valuable, though to make it even better, American Express often has further transfer bonuses, like they do right now to British Airways, with their 40% transfer bonus. That means with a similar deal, you are actually “earning” 126,000 British Airways miles for $30,000 in spend. That’s over four British Airways miles per dollar spent. And the beauty of American Express Membership Rewards points is that they transfer instantly to most programs, and take at most a couple of days for some programs (like transfers to All Nippon Airways).

In fairness the card does come with a steep annual fee of $175 (which is waived for the first year), though it seems well worth it for the miles earned.

So for the time being my Starwood American Express card will be collecting dust. Let’s see for how long that lasts.

Comments

  1. I am sure you have thought of it, but why did you never go with the American Express Platinum Card? I use it for business & personal, which allows me to fly for free at least twice a year (international & domestic). I also like the lounge benefit and other perks. The fee is a hard pill to swallow, but we use so much of the benefits it is worth it.

  2. Using affinity credit cards for purchases relating to the related company is great — qualifying for higher status, etc. But, after using many different cards over the decades, I’d have to say that the Fidelity Rewards retirement credit cards — one Amex, one Visa — are the best I’ve ever had. The Amex for example puts two cents in your retirement account for every dollar spent! Only because I think they’re great, here’s a link to FAQ’s: http://urlm.in/hdej

  3. The Costco American Express card is pretty attractive, too. There is no annual fee (you do have to be a Costco member). You get 2% cash back on travel expenses (air, car, hotel) and 3% on restaurants and gas, and 1% on everything else.

  4. are you actually receiving the 1.25 miles per dollar on the ba visa? i only received 1 point per dollar on the last statement and hesitant to call for obvious reasons. the ‘rewards details’ in chase only still show 1.25 points per dollar.

  5. actually, here’s the cut and paste from the account. strange huh?

    Miles earned for purchases this period

    25,000

    Total miles transferred to Executive Club

    20,000

  6. Man when I was in college I was just trying to come up with $119 to fly SWA to PHX for spring break. Your ability to spend and collect these points sounds great, wish I would have come up with something similar back in the day.
    Anyway, I recently signed up for the Amex Platinum Card under the 50K MR points promotion. Did that back in December and then spent the required $1,000. Just closed it yesterday after transferring 51K MR points to CO. ($30.60 fee to do that). Amex is refunding my entire $450 annual fee, so think I came out ahead in that deal. Now thinking of getting the Continental card under the 30K promo, which would end up giving me 80K RDMs in their program for essentially nothing out of pocket.

  7. What a timely post as we are sitting on approximately 200,000 SPG points and are looking for award travel yet are worried about what to do with them. Seriously, I have been thinking about this for the last few days.

    I am toying with two options:

    1. Transfer them to United, which is our airline of choice but does Starnet blocking, or
    2. Transfer them to Aeroplan, where if unused they will expire after several years. We never travel on Air Canada.

    I think we too will make the switch to the AMEX you just got.

  8. Ben, would you mind posting the link you used for the 25k bonus? I can only find the 15k offer for this card and it’s driving me crazy. Thanks!

  9. @ David Banther — I’m an additional cardmember on my dad’s American Express Platinum. I don’t spend any money on it, though use it for the lounge access. Other than the lounge access, I find the Premier Rewards Gold card to be much more rewarding. The Platinum card gives you a flat point per dollar spent regardless of category, unlike the Gold card.

    @ Paul — I certainly have. Out of curiosity, why are you hesitant to call?

    @ Despina — Keep in mind points transfer from SPG to UA at a 2:1 ratio, so you can take them out of the equation. Thanks to Chase, that’s the ratio with UA and CO. So stick to Aeroplan, in my opinion.

    @ Jeremy — Shoot, the link I used last week appears to be dead. Will let you know if I find one.

  10. @Despina –

    You can transfer the AMEX points to CO now ’til October 2011, get a 1:1 ratio, and the CO miles will become UA miles by the end of the year, anyway. Nothing stopping you from using those CO miles on UA in the meantime.

  11. Ben, as usual you know it all :). Thanks a lot; I appreciate the advice. I guess we will convert the points to Aeroplan miles, and hope that we get a chance to use them before they expire.

  12. @Despina –

    My bad, thought you had AMEX points to transfer and not SPG points. Mayber there is a way to go from SPG to AMEX (I doubt it), and then from AMEX to CO.

  13. Ben, I think you should just spring for the Platinum AmEx for $450, which is really $250 – $75 more than the Gold Card – after the $200 in airline credits. I know you sit up front virtually all of the time and don’t need the airline credits for on-board food, baggage fees, and the like, but with your purchases for your clients, I’m sure you’d be able to find a way to get that $200 back somehow (e.g. pre-pay their baggage fee on your card when you book their ticket). I’ve often wondered if the $200 would work for on-board duty-free purchases on international flights. $75 more in annual fees is not much, considering the additional 25,000 bonus points, add’l lounge and FHR benefits, and increased points earning capabilities (e.g. 4x points in the AmEx click-thru website) that come with the Plat AmEx.

  14. @ Lucky – nevermind my previous post – I didn’t realize you had a Plat AmEx via your dad. Come to think of it, I do remember your post on the Grant Hotel deal via FHR, so you must have had a Plat AmEx at the time.

  15. @Paul – I would definitely call Chase and ask. I haven’t seen any errors in our BA card statements, no change to T&Cs either. Probably just a glitch.

  16. I would highly recommend the AMEX Plat, which I have had for a few years. Beyond the airline credit and lounge access (in Latin america there are even amex lounges), I love the ability to borrow 60,000 points (lime now with the 40% bonus). Then you have 12 months to earn them back. Beyond that I love the ability to buy up to 500,000 points per year for 2.5 cents per (again like now with the 40% British airways bonus) – giving the ability to always buy a business class ticket to Europe for $1,700.

  17. Lucky

    Great post – I carry these 2 same cards myself for the same reasons. A couple of questions for you

    (1) Do you think the 2 for 1 certificates on BA are a better use of BA miles (even with the high fuel surcharges) than the 150K CX F award you referenced? How difficult is it to redeem BA miles on partner airlines such as CX

    (2) In your opinion, is Aeroplan the best Star Alliance redemption option. I am Statr Gold via UA but have found redemption very difficult. Just read a RTW trip report over on FT that cost only 120K Aeroplan points. Seems too good to be true

    Many thanks

    Rocket

  18. “Now, redemption opportunities aren’t great for travel on British Airways due to the fuel surcharges” – I presume you mean that you don’t like redeeming with BA because of the YQ, not that there is limited availability to do so.

  19. You can buy points (up to 500,000)on Amex anytime you transfer above the balance and the 60,000 you can borrow. So for instance, you have 10k points and you 100,000 – you borrow 60 and buy 30k at 2.5 cents per. In the case of the current BA offer you would end up getting 140k.

  20. @Tootalltofly – so what you transfer beyond the “borrowing” limit of 60K, you are immediately charged for?

  21. Good post, but we can all generate an argument why this or that card is better than another to generate more points per dollar. The BA visa one you mention gives you 1.25/$ Virgin Atlantic black gives 1.5/$ right out the gate. Spend that same $30,000 on your BA Visa and you get a companion voucher that matches your redemption in any class. So redeem miles for a 180,000 business or First class reward flight (or 260k or 480k) , and you will get in effect 180,000 free miles for that 30k spend. much better than the lousy 15k the Amex card gives you, (restricted to BA metal, of course)

    I use, or can choose to use BA, so for me, its stunning value. Two to Sydney on flat beds for half the usual miles? yes please!

  22. @John, thanks for the link. It works, BUT be sure to (A) be logged out of Amex at the time you apply and (B) use a different browser or clear your cache from before.

    If you were just checking your amex account before applying, it will kick you down to a lesser offer. You have to appear as a fresh customer approaching them to get the 25k miles.

    I usually browse on Chrome, and got shifted down to 10k offer. Logged off, shut that down, Opened Internet Explorer, tried again and the 25k offer stuck with instant approval.

    good luck. 25k isn’t mind blowing, but its worth having, with no fee, low spend target, and fully transferable. Plus its a decent everyday card to have!

  23. @Simon, yes when you go to transfer points you can set any amount up to 500,000 whether or not you have that as your points balance. AMEX will automatically charge you 2.5 cents per on anything over your balance plus borrowed amount. If you already have borrowed the max then it will automatically just charge you for whatever points you are transferring. I have done this several times – always when I needed to buy enough for an award and it always was well worth it.

  24. What I do:

    Costco Amex: for dining and travel, as mentioned above, 3%, 2%.
    Chase United for United tickets
    Chase Rewards 5% cash on Gas and Groceries (now defunct but I am grandfathered)
    Fidelity American Express: 2% cash back on everything, transferred to a Fidelity account (quirky web access but they pay)

    So I am always getting 2%+

  25. I think the best deal for you given all the airline spend would be to put all those charges on this new card as you say, transfer it to BA when they have a bonus, then combine it with a 241 by hitting the minimum $30,000 spend on a Chase/BA card.

    The total spend of $60,000 would yield and effective 297,000 miles. Even with BA’s award chart that isn’t bad especially because you can usually get space where you want to go.

  26. I have had a lot of problems with this American express card from Starwood. A lot of fake marketing offers where you never get the points promised. Plus of course like the other already said – SPG Platinum does not mean anything as their service has tanked. Beware of these – they are not so good anymore…

  27. It’s been over 2 years now since you made this post and I’m facing the same question – drop Starwood for Gold or not.

    With 2 years + of wisdom in tow – did you make the right call when you switched?

  28. @ Dane — For what it’s worth I still have the Starwood American Express primarily for the five nights and two stays it gets me towards status annually, which sure helps me with requalifying for Starwood Platinum status every year.

    Keep in mind you can have both cards. I love the Premier Rewards Gold card, the only downside is the high annual fee beyond the first year.

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