Is Starwood Still the Best Travel Rewards Card?

The Starwood Preferred Guest credit card, issued by American Express, can fairly be called the darling of the travel rewards world.

The card was a perennial winner of the Freddie awards. It was recently chosen as the Best Travel Rewards Card for Domestic Use in the SmarterTravel Editors' Choice Awards. And I've regularly recommended the card, both in my Up Front blogs and in one-on-one conversations with fellow travelers.

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Among the card's signature benefits:

  • Points can be converted into miles in more than 30 airline programs, usually on a 1:1 basis.
  • There's a 5,000-point bonus when transferring 20,000 points. So transferring 20,000 Starwood points to American, for example, nets 25,000 AAdvantage miles.
  • Points can also be redeemed for stays at more than 940 hotels.
  • The annual fee is a very reasonable $45, waived the first year.

Changes Ahead

It's always dangerous making changes to a product with a proven track record and a loyal following. But American Express has chosen to do just that, adding four tweaks that will take effect on October 14.

First, the card's annual fee will increase from the current $45 to $65. It will still be waived for the first year, however.

Second, cardholders will no longer receive the annual 50 percent discount certificate (the so-called SPG50).

Third, cardholders will receive five nights per year credited toward earning elite status, making Gold status available after 20 nights (instead of 25) and Platinum after 45 nights (instead of 50).

And fourth, cardholders will receive a third night free after two paid nights at participating Sheraton hotels. (Among the restrictions: Bookings are non-refundable, and only available Thursday through Sunday.)

Still the Best?

For the great majority of travelers, the loss of the discount certificate is a non-event, and the new benefits are irrelevant for most and of only modest value to a few.

What remains is the fee increase. In fact, the other changes were likely made to deflect attention from the price hike.

So, with the card benefits remaining, on balance, pretty much unchanged, and the cost to enjoy those benefits rising by 44 percent, is the card still a buy?

In a word, yes. The card easily delivers $65 a year in value.

The current Starwood sign-up offer generates as many as 25,000 points—10,000 after the card is used for the first time, another 15,000 points if the cardholder charges at least $15,000 during the first six months.

The enrollment bonus alone, transferred to an airline program or redeemed for a hotel stay, more than offsets the higher annual fee. The transfer flexibility and bonuses add further value to the card. And the more you travel, the greater the card's potential payoff.

Bottom line: American Express has stopped short of killing the proverbial goose that's been laying golden eggs. But they haven't done it any favors, either. In future, they should just leave that goose alone.

This article originally appeared on FrequentFlier.com.

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