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Starwood American Express vs. Flat-Rate Travel Cards: Max Value vs. Max Flexibility

Oct. 4, 2018
Credit Cards, Travel Credit Cards
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This page is out of date

With Marriott combining the Marriott Rewards and Starwood Preferred Guest loyalty programs, this page is out of date. See our details pages for the Marriott Rewards® Premier Plus Credit Card and the Starwood Preferred Guest® Credit Card from American Express for updated offers on these cards.

Traveling is one of the best things about modern life, but it can be a huge hassle. Many of us end up with intense loyalties to specific airlines and hotels that make the experience more pleasant for us.

If staying in a consistently good hotel chain makes your life on the road easier, the Starwood Preferred Guest® Credit Card from American Express is an excellent choice. Use it strategically, and you can earn an effective rewards rate of up to 11.5 cents per dollar. The value of this card, however, is directly tied to how often you stay at Starwood’s hotels.

Travelers who prize flexibility may be better off with a flat-rate travel card, whose rewards can be used for any travel purchase — stays at any hotel, flights on any airline, car rentals from any company. We’ve already compared the Starwood Preferred Guest® Credit Card from American Express with the Chase Sapphire Preferred® Card in a separate post. Now let’s see how it stacks up against some other good travel credit cards.

» MORE: NerdWallet’s best travel credit cards

The contenders

The Starwood Preferred Guest® Credit Card from American Express: You earn 2 Starpoints per $1 spent at participating Starwood and Marriott Rewards properties, and 1 Starpoint per dollar on every other purchase. That’s just for using the card. As a Starwood Preferred Guest member, you earn an additional 2 or 3 points per dollar spent at Starwood (but not at Marriott). Starwood brands include Sheraton, Westin, W Hotels and St. Regis. NerdWallet values Starpoints at 2.3 cents each, on average, when redeemed for hotel stays. (Actual point value may be more or less depending on when and where you stay; see our review of the Starpoints program for details.) That average translates to a maximum rewards rate of 11.5%. The annual fee is $0 for the first year, then $95.

The Capital One® Venture® Rewards Credit Card: This card pays 2 miles per $1 spent, no matter whether you’re buying plane tickets or paying parking tickets. Miles are worth 1 cent apiece, if used for travel, giving you a value of 2 cents on the dollar every time you use the card. The annual fee is $0 for the first year, then $95.

The Bank of America® Travel Rewards credit card: With this card, you get an unlimited 1.5 points per $1 spent, and the annual fee is $0. If you have a Bank of America® checking or savings account, you can earn a 10% points bonus on every purchase, making your effective rewards rate 1.65 cents on the dollar. You can boost that even higher if you’re a Bank of America® Preferred Rewards customer.

The Discover it® Miles: With this card, you earn an unlimited 1.5 miles per $1 spent. Miles are worth 1 cent each, so the rewards rate on this card is a little lower than the other flat-rate travel cards. But unlike the other cards, this one has an annual fee of $0.

Breaking down the rewards on the Starwood Preferred Guest® Credit Card from American Express

It’s hard to look past the potential for an 11.5% rewards rate on hotel stays paid for with the Starwood Preferred Guest® Credit Card from American Express. That’s a whole lot of rewards. But keep in mind that you get that maximum rate only when you use the card to pay for stays at Starwood hotels, redeem your Starpoints for more stays at Starwood hotels and have elite status in the SPG program.

Other redemption options reduce the value of your points. For example, Starpoints can be transferred to about 30 frequent-flier programs, usually at a 1:1 ratio — but the typical airline mile is worth less than 2.3 cents, on average. Lower-value options also include rental car certificates, charitable donations and gift cards.

The maximum rewards rate is also a bit deceptive because not all those Starpoints are coming from the credit card itself. You don’t have to carry the card to be a member of the Starwood Preferred Guest program. Depending on their status, program members earn 2 or 3 points per $1 spent at Starwood hotels, regardless of how they pay for their stay. If you use the Starwood Preferred Guest® Credit Card from American Express, you get an additional 2 points per dollar, for a total of up to 5 points.

Still, those extra 2 points per dollar for paying with the Starwood Preferred Guest® Credit Card from American Express translate into an extra 4.6 cents (on average) per $1 spent. Not too shabby. The card’s rate on non-SPG purchases, while only 1 point per dollar, is also higher than the rate on flat-rate cards because the points are valued so highly. You get an effective rate of 2.3%, rather than 1.5% or 2% — as long as you redeem points for Starwood stays.

Making the choice

Indeed, it all comes down to how often you stay with Starwood. If you patronize the company’s properties — or could do so — often enough that you expect to regularly redeem your rewards for free nights, then the Starwood Preferred Guest® Credit Card from American Express offers a much better value than flat-rate travel cards.

Nerd tip

If you choose the Starwood Preferred Guest® Credit Card from American Express, know that Marriott and Starwood are in the process of merging. Neither side has said specifically what that means for either Marriott’s or Starwood’s loyalty programs, but Marriott’s CEO has said the programs won’t be combined until 2018 — at the earliest.
As of late 2016, the only major changes of note were the ability to earn bonus Starpoints by using the card at Marriott properties, and the ability to transfer points between the SPG and Marriott Rewards programs.

On the other hand, the flat-rate cards mentioned above give you decent rewards on every purchase, and you can use those rewards in a lot more ways. There’s also the benefit of simplicity: You know exactly how many points or miles you’ll get for each purchase and exactly how much each point or mile will be worth at redemption. If your travel style is brand-agnostic, consider the flat-rate route.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: virginia@nerdwallet.com. Twitter: @vcmcguire.