Best Rewards Card: The Starwood Preferred Guest Credit Card from American Express
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If you ever run into me at a social gathering, don't get me started talking about credit cards because I might never stop. After a few minutes speaking about some of the great reward credit cards available, I am often interrupted by a single question — "Which one is the best?" I have participated in this conversation so often that I now just blurt out "Starwood" before you can complete your sentence. (See also: The Best Travel Rewards Cards)
Since I learned how to use credit card rewards to travel the world, the Starwood Preferred Guest® Credit Card from American Express has become my favorite product, hands down. For each dollar I spend with this card, I earn one point in Starwood Hotel's Preferred Guest program. Starwood is the parent company of several different hotel chains, including Sheraton, Westin, and Le Meridian. Once points are earned, members have a variety of options to redeem them for free hotel nights, frequent flyer miles, or other valuable awards.
How This Card Works
When cardholders make any purchase at a Starwood or Marriott Rewards hotel, they earn a minimum of four points per dollar spent. Additionally, those who spend $30,000 in a calendar year will be upgraded to the Gold level in the Starwood Preferred Guest program. With this status, card members earn five points per dollar spent at Starwood hotels while enjoying benefits such as room upgrades and late checkout privileges. Finally, award nights and mileage transfers are just two of a dozen different redemption options that include merchandise awards, charitable contributions, or the direct booking of flights. Having considered each of these other options, I have always found that award nights and mileage transfers represent the most valuable utilization of my Starpoints.
If you spend $3,000 with your card within the first 3 months of card membership, you can earn 25,000 bonus Starpoints. For a limited time, earn an extra 10,000 when you spend an additional $2,000 within the first 6 months. (Offer ends 4/5.) Terms apply. The annual fee of $95 is waived the first year.
Using Starpoints for Free Nights at Hotels
Free night awards at Starwood hotels begin at a mere 2,000 points for a weekend stay. Although award nights at higher-end properties can cost as many as 35,000 points, Starwood has many luxury properties where you can redeem 10,000 points or less for an award night. For example, my family recently stayed three nights at the Sheraton Four Points in Milan, Italy for 10,000 points per night. We also have a three night reservation at a Sheraton Suites in Ft. Lauderdale, Florida that cost a total of 10,000 Starpoints. In contrast, a single award night with the Marriott rewards program starts at 7,500 points and quickly increases from there. Starwood imposes no blackout dates or capacity restrictions on its hotel awards. If they have a room sale, you can instantly redeem your points for an award stay. Finally, when you redeem a four night stay with your Starpoints, the fifth night is free.
Transferring Starpoints to Airline Miles
I have met people who have redeemed hundreds of thousands of Starpoints without making a single reservation for an award night. These are travelers who earn Starpoints only because they can transfer them to miles in frequent flyer programs. Starpoints can be redeemed for miles in the frequent flyer programs of over 30 different airlines. When you realize that most of those airlines allow you to use their miles to book award flights with at least a dozen different partner carriers, you start to understand how this one credit card is the gateway to a staggering array of award travel opportunities. I have redeemed Starpoints for miles with carriers that I have never flown, which I used for award flights on their partner airlines that I had yet to travel on. I can also use a few thousand Starpoints to top off my various frequent flyer accounts when I don't quite have enough miles for the award I need.
If this flexibility wasn't enough, mileage transfers also offer superior value. Starpoints are usually redeemed for miles at a 1:1 ratio, but when you redeem 20,000 Starpoints at once, you get a 5,000 point bonus. In most cases, these bonuses allow you to earn more miles per dollar spent by using your Starwood card than you could by using that airline's own co-branded product. In contrast, the Priority Club Rewards program run by the Intercontinental Hotels Group (the parent company of Holiday Inn and others), allows you to transfer points to a dozen different airlines, but requires you to redeem 10,000 points to earn 2,000 miles. (See also: Best Credit Cards for Transferring Points to Miles)
- $95 Annual Fee (waived the first year)
- 15.99%-19.99% Variable APR for purchases and balance transfers
- 3% Balance Transfer Fee (minimum $5)
- $0 Foreign Transaction Fee
The Downsides of the Starwood Card
For all my enthusiasm, I still realize that no credit card is perfect. For starters, those who carry a balance should not focus on trying to earn rewards with any card, especially since this card does not offer competitive interest rates. When you don't pay your balance in full, you will accrue interest at 15.99% - 19.99% variable APR. (See also: Best Low-Interest Rate Credit Cards)
Additionally, American Express cards are not accepted everywhere, so I always carry a Visa or MasterCard as well despite using this card to earn award travel to other countries. There is also an annual fee of $95, which is waived the first year, that you should weigh against the rewards your will earn.
Finally, this card is a terrible way to earn United Airlines miles. You get a single MileagePlus mile for every two Starpoints redeemed. (See also: Which United MileagePlus Credit Card Should You Get?)
My Favorite Travel Rewards Credit Card
Of course, there are several other credit cards that offer hotel points, and many of those programs appear to have similar redemption options. But compared to its competitors, Starwood points offer great value and flexibility. In fact, each Starpoint is worth far more than any airline mile or credit card reward point, let alone other points from competing hotel chains. (See also: Best Hotel Rewards Programs and Credit Cards)
Generally speaking, for each dollar I spend using this card, I'm getting roughly 3 to 5 cents worth of free hotel stays or airfare back from the Starwood network. Other networks generally fall far short of this, providing me only with 1.5 cents back. Of course, the 3 to 5 cents number is highly variable, and may go up or down depending on whether you are traveling during peak season (when you might get more bang for your buck) or during off-peak season (when you might get back less).
If you are an experienced collector of points and miles, or if you are just starting your quest for award travel, you might as well just sign up for this card now. That way, you will earn fantastic awards, while I can feel free to talk about something else the next time we meet.
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