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Update: Some offers mentioned below are no longer available – Citi Hilton Honors Reserve Card, Starwood Preferred Guest Credit Card from American Express
Today, TPG Senior Points & Miles Correspondent Nick Ewen examines some planned updates to one of the travel rewards credit cards I use the most.
The Starwood Preferred Guest Credit Card from American Express has been a TPG favorite for a number of years. His most recent valuations peg Starpoints at 2.4 cents apiece (higher than any other loyalty currency out there), which makes sense given the terrific award redemptions and the transferability to the program’s various airline partners. Amex just sweetened the deal by announcing new benefits on both the personal card and the Starwood Preferred Guest Business Credit Card, and in this post I’ll evaluate the updates to help you decide whether these co-branded cards should be added to your travel rewards arsenal.
In a nutshell, there are four major improvements coming to the SPG Amex cards starting August 11, 2015:
- No Foreign Transaction Fees — You can now enjoy international travel without foreign transaction fees from American Express when using the card for purchases abroad.
- Complimentary, Unlimited Boingo Wi-Fi — You’ll get complimentary, unlimited Wi-Fi access when you enroll in the Boingo American Express Preferred Plan. Receive Wi-Fi access on up to four devices to more than a million hotspots worldwide, and pay no Wi-Fi roaming fees.
- Complimentary Premium In-Room Internet Access — You won’t miss a beat while away from family, friends, or the office with complimentary premium in-room internet access at participating Starwood hotels.
- Sheraton Club Access — If you have the Starwood Preferred Guest Business card, you’ll get free access to Sheraton Clubs when you book rates that are eligible to earn Starpoints.
Unfortunately, these changes come at a price (just like the recent changes to the Premier Rewards Gold Card from American Express). With the enhanced product benefits, the annual fee for each card will increase from $65 to $95, also effective August 11, 2015. However, the annual fee is still waived for the first year, and will be $95 thereafter.
These are some welcome changes, but let’s take a closer look at each one and see if the increased annual fee is justified.
No foreign transaction fees
This is a critical change to the SPG Amex cards, and is honestly a bit overdue. Just about every other major hotel chain has at least one co-branded credit card that waives foreign transaction fees:
- Hilton HHonors — Citi Hilton HHonors Reserve Card
- World of Hyatt — The Hyatt Credit Card
- IHG Rewards Club — IHG Rewards Club Select Credit Card
- Marriott Rewards — Marriott Rewards Premier Credit Card
It simply doesn’t make sense that a card like the Chase Sapphire Preferred Card would be the best option when paying for an international Starwood stay. I’m glad to see that this will no longer be the case, but does this justify the additional $30 tacked on to the annual fee?
Like many aspects of the points and miles hobby, it depends how often you travel internationally. If you use your SPG card on a foreign transaction now, you’ll incur a 2.7% fee on the purchase. This means that you would need to spend at least $1,111.11 per year on foreign transactions to “break even” with this new benefit and the increased annual fee (not accounting for the value of the Starpoints you’d earn on those purchases).
Looking past the annual fee consideration, this change may make the SPG Amex a new favorite for non-bonus purchases abroad. I’m currently in the midst of a two-week jaunt through Europe, and have spent a considerable amount of money on my Barclaycard Arrival Plus World Elite Mastercard (which gives me 2x miles on every purchase). However, that 2.27% rate of return is slightly lower than the 2.4% I’d get using the SPG Amex (after August 11 of course).
The added internet access is another big change, and will hopefully be a welcome one for those who frequently encounter Boingo hotspots in airports or other locations. This benefit was also added to The Platinum Card from American Express last year to make up for the loss of access to American and US Airways lounges, but it’s nice to see a card with such a comparatively low annual fee gain the same benefit.
Just like the waived foreign transaction fees, the value of this new benefit is entirely dependent upon your travel patterns. Prices for one-time access to Boingo hotspots varies by location and duration of your Wi-Fi session, but generally you’ll spend at least a few dollars each time you connect. This new benefit appears to be comparable to Boingo’s Global Plan (which costs $39/month by itself), so if you’re a heavy user, you can easily make up the increased annual fee in a month or less.
Premium Internet at SPG properties
This final benefit applies to stays at SPG properties. Back in December, Starwood announced that all SPG members would receive complimentary internet during stays booked through an “official” Starwood channel. Gold and Platinum SPG members are eligible for “premium” internet access at participating hotels, so this addition to the SPG Amex puts cardholders on the same level as elite members when it comes to on-property Wi-Fi.
Like the other two benefits, this one is hard to quantify. It depends not only on how frequently you visit SPG properties, but also on your Internet needs during those stays. I rarely stream movies or use other high-bandwidth applications, so I have never felt like “premium” internet at a hotel was worth much over the “standard” service. In my recent valuation of SPG elite status, I pegged this benefit at $2 per night. Sticking with that logic, the break even point with this new benefit and the increased annual fee is after 15 nights in SPG properties.
The SPG Amex was already quite valuable prior to these new benefits, and is popular among both the TPG team and readers. These new benefits clearly make this card even more attractive, and come on the heels of the new sign-up bonus offer of 25,000 Starpoints after spending $3,000 within the first three months of getting this card. The true value you’ll get out of the changes depends largely on your typical travel and spending patterns, but I think it’s safe to say that for the vast majority of cardholders, the increased annual fee is easy to justify.
What are your thoughts on these changes to the SPG Amex?
This cash back card has a focus on dining and entertainment where you can earn unlimited 4% cash back in those spending categories. You can also earn 2% cash back at grocery stores and 1% cash back on all other purchases.
- Earn a one-time $500 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
- Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
- No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
- No foreign transaction fees
- Access to premium experiences in dining, entertainment and more
- $0 intro annual fee for the first year, $95 after that