Is the American Express Starwood Preferred Guest Credit Card Worth it?

The American Express Starwood Preferred Guest Credit Card has a 20,000 sign up bonus points and $120 annual fee. The question I get fairly often is whether the 20,000 sign up bonus is worth the $120 annual fee. Let’s take a deeper look. But first, here are the highlights of the credit card:

• $120 annual fee
• $50 for supplemental cardholders
• Earn 20,000 sign up bonus points after spend $500 in the first three months
• Earn 1 points for every $1 spent on all purchases
• Receive an upgrade to Starwood Gold Preferred Guest membership after spending $30,000 each anniversary year
• Receive a Free Weekend Night Award after spending $40,000 each anniversary year

Whether the 20,000 sign up bonus points is worth the $120 annual fee that we pay depends highly on how we leverage these Starpoints.

Leverage your points with airlines

A quick way to calculate this is that 20,000 Starpoints is transferable to airlines partners and worth 25,000 points in the process, because it is a 1:1 transfer and 5,000 bonus points for every 20,000 that you transfer. This is especially valuable if you can transfer those 20,000 during a bonus, where you can, for instance earn another 20% bonus during the transfer, which nets you another 4,000 bonus points. So the same 20,000 Starpoints gets you 29,000 airline points. This instantly makes the 20,000 Starpoints for $120 worth it.

Here is a recap on the airline transfer partners:

• Aeromexico Club Premier 1:1
• Aeroplan/Air Canada 1:1
• Air Berlin 1:1
• Air China Companion 1:1
• Air New Zealand & Air Points 65:1
• Alaska Airlines Mileage Plan 1:1
• Alitalia MilleMiglia 1:1
• All Nippon Airways (ANA) Mileage Club 1:1
• American Airlines AAdvantage 1:1
• Asia Miles 1:1
• Asiana Airlines 1:1
• British Airways Executive Club 1:1
• China Eastern Airlines 1:1
• China Southern Airlines’ Sky Pearl Club 1:1
• Delta Air Lines SkyMiles 1:1
• Emirates Skywards 1:1
• Etihad Airways 1:1
• Flying Blue 1:1
• Gol Smiles 2:1
• Hainan Airlines 1:1
• Hawaiian Airlines 1:1
• Japan Airlines (JAL) Mileage Bank 1:1
• LAN Airlines LANPASS Kms 1:1.5
• Miles and More 1:1
• Qatar Airways 1:1
• Saudi Arabian Airlines Alfursan 1:1
• Singapore Airlines KrisFlyer 1:1
• Thai Airways International Royal Orchid Plus 1:1
• US Airways Dividend Miles 1:1
• United Mileage Plus 2:1
• Virgin Atlantic Flying Club 1:1
• Virgin Australia 1:1

Leverage your points with hotels

Here is a quick recap on the hotel categories:

• Category 1 = 2,000 – 3,000
• Category 2 = 3,000 – 4,000
• Category 3 = 7,000
• Category 4 = 10,000
• Category 5 = 12,000 – 16,000
• Category 6 = 20,000 – 25,000
• Category 7 = 30,000 – 35,000

The 20,000 Starpoints can get you anywhere between 6 to 10 nights if you use them on Category 1 hotels. The American Express advertisements that we see everywhere seems to say that we can get up to 5 nights free, which is essentially the Category 2 hotel rooms. That is actually a lot of free nights of hotel room, easily making the $120 annual fee worth it.

The challenge is when you move up the category, you need more points for a free night, granted they are generally more expensive rooms. The question is, do you value the more expensive rooms. Let’s say you had a $100 budget for a night at a hotel. If you can get 5 free nights out of it with Category 2s, then the 20,000 points is essentially worth $500 to you. But if you wanted to splurge, and get a Category 6 hotel room, that same $100 budget cannot be calculated the same way. Maybe you’ll get a hotel room that is worth $350 dollars, but you only get 1 night.

It really depends on how you leverage your points. As usual, always do your personal calculations first.