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John W. asks, “With Starwood and Marriott merging does it still make sense to get a Starwood credit card?”
I Carry Both the Personal and Business Cards
When I first got the Starwood card 15 years ago I actually received no signup bonus at all for it. I’ve had the card for a dozen years and still carry it in my wallet. I now have both the personal and the business card. I had the business card when it was first introduced in 2006. While you’re limited to a bonus only once for personal cards, if you’ve had the business card in the past (over a year ago) you may be eligible again.
I love both cards. I am a Starwood Platinum and they each give me 2 stays and 5 nights towards my elite status. The Starwood Preferred Guest co-branded card has been one of the very best for a long time. I’ve been using this card as a consistent go-to for over a decade, it was the one I recommended most back in 2002 when I started this blog. In fact, I recommend it in my very first archived post from May 2002.
Westin Siray Bay Resort, Phuket
Starwood points remain the most valuable currency to this day — whether for redeeming on hotel stays or transferring to airline miles since they have the largest array of frequent flyer program partners.
Four new benefits were added last year.
- No Foreign Transaction Fees
This has been a long time coming. Premium travel credit cards shouldn’t have foreign transaction fees. Customers travel abroad, put the card away, and don’t take it back out when they return home. It’s in the bank’s interest not to charge these for customers who are regular international travels, and the portfolio of hotel and airline co-brand credit card customers overall meets this criteria. I can finally use my Starwood American Express cards at Starwood hotels, even outside the U.S.
- Complimentary, Unlimited Boingo Wi-Fi
This is a benefit that American Express added to their Platinum cards a year ago. It’s free unlimited unlimited access to Boingo’s wireless hot spots around the world, something they’d charge at least $60 per month for.
- Complimentary Premium In-Room Internet Access
Starwood no longer charges SPG members for internet access, and as a result they give ‘premium’ (faster) internet to Gold and Platinum members. This upgraded internet will also be extended to their co-brand American Express card holders.
- Access to Sheraton Club Lounges for Starwood Preferred Guest Business card holders.
The Value Proposition of the Starwood Cards
The Starwood Amex remains my go-to for spend that isn’t bonused elsewhere, because the bonus for transferring points to miles (in 20,000 mile increments) means that I’m effectively earning 1.25 miles per dollar on all of my spend. So it’s my card to give myself a category bonus when there isn’t one otherwise.
Starwood pioneered no blackout dates or capacity controls on award nights, if there’s a standard room available at a hotel you can have it on points. Most hotel programs have since more or less matched this.
W Seoul Walkerhill
Starwood also pioneered premium room awards, and still offers a better value on those than many competitors.
Cash and points awards are still a good way to stretch the value of points (and are now available for premium rooms as well).
I like the points best for transfers to airline miles. Transfers don’t happen instantly, but they’re great for topping off a variety of accounts — they’re good for transferring almost everywhere except United (where the transfer ratio isn’t favorable). They partner even with relatively ‘obscure’ programs for US members like Lufthansa’s Miles & More (access to Lufthansa first class awards more than two weeks in advance), Singapore Airlines (Singapore first class awards), and Japan Airlines (the best program to use most of the time for Emirates first class awards). And of course all with the aforementioned transfer bonus.
$30,000 spend on the card in a year earns Gold status in the Starwood Preferred Guest program. But since having the card gets you most of the benefits of Gold status anyway, minus check-in amenity and points bonus for in-hotel spend, the usefulness of the card towards status comes for folks shooting for Starwood Platinum.
Since Marriott is Buying Starwood, Should You Still Get The Card?
The best deals in travel never last. I’ve written many times that anything that’s several standard deviations better than the median will tend to revert.. but that you should enjoy things that are better while they are.
It is possible that the programs merge at the beginning of 2017. But there’s a real chance that doesn’t happen until 2018. The merger of the companies hasn’t closed yet and won’t for months. And combining programs is a big data project, likely to take 18 months.
The funny thing about the merger, as much as I don’t like it, folks with Marriott Rewards points will get nicer hotels to use their points at and Marriott is actually more rewarding than Starwood in terms of return on paid stays.
Meanwhile, there are really two sets of people who lose out in the merger:
- Folks with Starwood elite status. Marriott’s benefits aren’t going to be as strong.
- Folks with big Starwood points balances, depending on the ratio that they get converted to Marriott Rewards at. If they get converted at 1 Starpoint -> 3 Marriott points that’s great but if I were to guess the conversion won’t be generous perhaps 1 -> 2. That’s why it may be a good idea to err on the side of using Starpoints before programs get combined. Plus Starwood has better airline miles transfer partners at great transfer rates.
We also don’t know what’s going to happen to Starwood American Express cards. Assuming the programs get combined, will the card go away or will American Express continue to be able to service legacy cardholders? In other words — similar to what happens with Barclaycard and American AAdvantage, will folks who get the card before the programs merge be able to keep it but there’ll be no way to sign up afterward? I keep my legacy Barclaycard-issued American card in part because you can’t get one anymore.
My advice is get the cards you want, earn Starpoints, we’ll know the transfer rates before transfers happen so there’ll be a window in which to bail on the program if need be. At a reasonable conversion rate [even 1->2.5] there won’t be a reason to run from Starwood balances. And going forward remember that Marriott is actually more rewarding for spending at their hotels than Starwood is.
The overall message is enjoy those things that are better while they last, and if and when programs change move on at that time. Don’t avoid superior value now on the chance or even likelihood that it would be around later.