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Reader Anne asked the following question in the “Ask Lucky” forum:
We had settled on switching to AmEx Premier Rewards Gold from Platinum but now with the announcement of the new benefits for SPG AmEx we are torn. My instinct is the higher earn on the Gold is more valuable but didn’t know if the larger # of partners on the SPG Amex beat it out. We also have the Chase Sapphire. Thanks for any advice!
It’s an interesting question, especially given that refreshes were announced on both of these cards recently:
- The Premier Rewards Gold Card from American Express was refreshed as of June 1, 2015, which resulted in the following changes:
- A $100 annual airline fee credit was added
- The card now offers double points at US restaurants
- The card no longer has foreign transaction fees
- The annual fee increased by $20 per year
- The Starwood Preferred Guest® Credit Card from American Express and Starwood Preferred Guest® Business Credit Card from American Express are being refreshed as of August 11, 2015, which will result in the following changes:
- The card will no longer have foreign transaction fees
- The card will offer unlimited complimentary Boingo wifi
- The card will offer complimentary premium wifi at SPG hotels
- The business card will offer complimentary lounge access at Sheraton properties
- The annual fee will increase by $30 per year
With that in mind, which card is a better option, given what we know about Anne’s circumstances?
Comparing the annual fees
The annual fee on the Premier Rewards Gold Card from American Express is $195 (waived the first year), though you receive a $100 airline fee credit each calendar year.
Meanwhile the intro annual fee on the Starwood Preferred Guest® Credit Card from American Express is $95 (waived the first year).
So on paper the SPG AmEx has a lower annual fee, though if you fully utilize the value of the airline fee credit on the AmEx PRG, it’s not a huge consideration point, in my opinion.
For example, I was able to redeem my $100 airline fee credit for $100 worth of American Airlines gift cards, which I value pretty close to face value.
Comparing the value of points
The Premier Rewards Gold Card from American Express accrues Membership Rewards points, while the Starwood Preferred Guest® Credit Card from American Express accrues Starpoints.
In terms of my valuation of points, I value Starpoints at 2.2 cents each, while I value Membership Rewards points at 1.8 cents each.
Both currencies have their pros and cons.
Starpoints can be converted into airline miles at a 1:1 ratio, and for every 20,000 points you transfer you get a 5,000 point bonus. Starwood also has the most extensive list of airline transfer partners, including programs like Alaska Mileage Plan, American AAdvantage, Japan Airlines Mileage Bank, etc., which other transferrable points currencies don’t give you access to. The downside is that the points don’t transfer instantly, and in some cases can take more than a week.
Membership Rewards has quite a few great airline transfer partners, and fairly regularly even has transfer bonuses. In most cases points even transfer instantly. I value Membership Rewards points slightly less than Starpoints since with Starwood you’re essentially earning 1.25 airline miles per Starpoint, assuming you transfer points in increments of 20,000 points.
Comparing the return on everyday spend
Because of the bonus categories the card has. The Premier Rewards Gold Card offers the following bonus categories:
- 3X points for flights booked with airlines
- 2X points at US gas stations, US restaurants, and US supermarkets
- 1X points on other purchases
I guess to crunch the numbers even further, if we’re going to say Membership Rewards points and Starpoints are worth 1.8 and 2.2 cents, respectively, then you’d have to earn at least an average 1.22 Membership Rewards points per dollar spent on the Premier Rewards Gold Card to “break even” in comparison to the Starwood American Express Card.
Given that the AmEx PRG offers bonus points on airfare, dining, gas, and groceries, you probably have a good shot of coming out ahead using that card. However, if you have a ton of non-bonused spend, you’d probably come out ahead using the SPG AmEx.
These are both cards I have, and both cards that I think are worth holding onto long term. The fact that the SPG Business AmEx now offers lounge access at Sheraton properties is a perk which will justify the card for many in and of itself. Heck, I hold onto my Starwood credit card exclusively for the two elite stay credits and five elite night credits I get towards Starwood status every year.
But given Anne’s situation, assuming the goal is to maximize the points on everyday spend, and assuming she could fully utilize the airline fee credit, I’d say the Premier Rewards Gold Card from American Express will probably offer her a better return.