How Much Do Point Valuations Influence Which Card You Use?
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TPG reader Derek emailed me to ask about earning points:
"I have the Starwood Amex and Chase Freedom Unlimited, and am trying to decide whether to keep the Starwood card in my portfolio. Starpoints are worth the most in your valuations, but is the Freedom Unlimited card more valuable since it earns more points per dollar spent?"
Each month, I publish valuations of points and miles from the most popular loyalty programs, including airlines, hotels, banks and more. The goal of those posts is to help you get a sense of how much your points are worth when you redeem them, but also to guide you when you're deciding which points to earn in the first place. That depends just as much on the earning rate as it does on the individual values.
Starpoints have long been my most highly valued loyalty currency — I list them at 2.7 cents apiece in my latest valuations. Ultimate Rewards points are a bit lower (but still among the highest) at 2.1 cents apiece. Clearly, I think Starpoints are worth more on a per-point basis, but that doesn't mean earning them is always the best choice. Again, the earning rate is critical.
The Starwood Preferred Guest Card from American Express from Amex earns 1 Starpoint per dollar on purchases outside of the brand, while the Chase Freedom Unlimited card earns a flat 1.5 Ultimate Rewards points per dollar on all purchases. With those numbers in mind, Derek's question just boils down to multiplication. I'd value 1.5 Ultimate Rewards points at about 3.15 cents — more than one Starpoint. That means when all else is equal, I'd rather use the Freedom Unlimited card for everyday (non-bonus) spending.
Of course, things aren't always equal, and you might rather earn Starpoints in some scenarios — like if you need to pad your account for a lucrative SPG award, or if you're saving up for a Marriott Hotel + Air package. Similarly, you might prefer to earn Ultimate Rewards points even at a lower earning rate if you're saving up for a high-value redemption like a trip to the Park Hyatt Maldives.
The underlying idea here is that my valuations are mine, and they don't necessarily have to be yours. Think of them as general guidelines rather than ironclad truth. In my opinion, Freedom Unlimited is the better option, but everyone uses points differently. Decide what makes the most sense for you based on how you spend your money and where you want to go.
In any case, you should think about keeping the Starwood Amex even if it isn't your best option for everyday spending. The card offers a variety of benefits like Boingo Wi-Fi access and annual elite credits (which come in handy if you're hoping to qualify for Starwood status). Make sure you look at the whole picture before you close your account.
If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.