American Express Starwood Still the Best, Despite Hiked Fees

American Express has started sending out letters to the Starwood credit card holders, informing them that it plans to raise the annual fee from $45 to $65 starting October 14th, and it’s modifying the rewards program a bit.  If you’re a cardholder, you may be considering canceling the card in anger at the prospect of a higher fee, but we don’t think you should.

If you’re the type of person for whom this card is intended (i.e. you travel a lot, you have an expense account, or you just like to stay in nice hotels), then the benefits still far outweigh the costs.  You still earn a point for every dollar you spend, and up to five points per dollar spent at Starwood properties (depending on your “status” within the Preferred Guest program).  There are no blackout dates for free nights, and points are still transferrable for airline rewards, making this a great all-around travel rewards card.  This card consistently ranks towards the top of our rewards card rankings by a wide margin, so an additional $20 per year is not a big deal.

There are a few more nuggets within the letter as well:

• Each year you renew your account, you will receive from Starwood credit for 5 nights to help you achieve Starwood Preferred Guest Elite status faster. So now you only need 20 nights to achieve Gold status and 45 to achieve Platinum, rather than 25 and 50.  Gold status probably isn’t a big deal for most Starwood card users, since you also get it for spending $30,000 on the card in a year, but the additional boost to Platinum is a nice perk.
• We will no longer offer the 50%-Off Award when you renew, as we found that few Cardmembers used the benefit. Previously, Starwood card users were able to redeem 1,000 Starpoints for 50%-off coupons on stays of up to five nights at Starwood properties, but that will no longer be the case after October 14th.  Doesn’t seem like a huge loss though, since free nights are a much better deal.
• From October 14, 2010 through December 31, 2011, you can receive a complimentary third night when you purchase a two night minimum stay at Sheraton Hotels and Resorts Worldwide. A free night at one of these hotels more than makes up for the $20 increase in fees, for the first year at least.

So if you’re currently a cardholder, put down those scissors, you’re still getting a great deal.  And if you’ve been considering the card but are turned off by the annual fee, run the numbers on our rewards credit card page, and you may find that this card is still the best for you by a landslide.

Starwood Preferred Guest® Credit Card from American Express
	Starpoints(R) Bonus: 10K with your first purchase and another 15K when you spend $5k within 6 months - enough for up to 6 free nights at a Category 1 or 2 hotel Free nights, free flights: Redeem Starpoints with over 350 airlines through SPG Flights and more than 1,000 hotels and resorts worldwide. No blackout dates 2011 SmarterTravel(R) Award for "Best Travel Rewards Card" $0 introductory annual fee for the first year, then $65
Annual Fee Signing Promo APR, variable* Intro APR Promotions $0 the first year, then $65 25,000 Starwood Points Bonus after spending $5,000 - 10K with your first purchase and another 15K when you spend $5K within 6 months - enough for 6 free nights at a Category 1 or 2 hotel Min APR: 15.24% Max APR: 19.24% Default APR: 27.24% Cash Adv: 25.24% Purchase: None Bal Trans: None

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