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Reader sourabh asks,
Hi Gary, I love your blog and wonder what you feel about the new Amex fee increase for Starwood and whether that is triggered by their loss of the Costco relationship?
Also it seems now that the business Starwood card is more valuable than the personal one, why is that?
There are new benefits coming to the Starwood American Express cards August 11. And with that comes an increase in each card’s annual fee to $95 (still $0 the first year).
- No Foreign Transaction Fees
- Complimentary, Unlimited Boingo Wi-Fi
- Complimentary Premium In-Room Internet Access
- Access to Sheraton Club Lounges for Starwood Preferred Guest Business card holders
I agree that the Starwood American Express business card is better than the personal one although I have them both (since they each give me 2 stays and 5 nights to help requalify for my Starwood Platinum status).
There are two reasons why the business card is better than the personal one:
- OPEN savings (I use it for 5% rebate at domestic full service Hyatts)
- Sheraton club lounge access
I really don’t know why American Express and Starwood chose to make the business card better at the same price point, that’s a great question, though I imagine spend volume on the business cards tends to be higher than on personal cards.
OPEN savings (automatic rebates for using the card with particular merchants) isn’t specific to the Starwood card but is something on all Amex business cards (and Visa/MasterCard have similar programs for business cards as well).
Plus the thinking may be that club lounge access is uniquely appealing to small businesses (since there’s some savings on price sensitive travel, and lounges in the US are mostly used by business travelers during the week).
The increased fee is more likely because the American Express-Starwood co-brand deal was re-upped and presumably American Express is paying Starwood more money under the new contract, than because of some external factors. And they saw that the standard fee for premium cards — United Explorer, Citi AAdvantage, Sapphire Preferred to name a few — was $95, so they likely had room to go up to that.