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Evaluating Value: Starwood Preferred Guest Credit Card

With the Starwood Preferred Guest Credit Card, you can earn 25,000 bonus Starpoints after you spend $3,000 on purchases in the first three months. Starpoints do not have a fixed value so it’s up to you to find the best redemption possible. Luckily, there are a variety of ways to redeem your bonus Starpoints to get the most value. That makes the Starwood Preferred Guest Credit Card my number two recommendation for new points & miles enthusiasts. 

I signed up for the Starwood Preferred Guest Credit Card in August 2014. It was my second points & miles credit card after the British Airways Visa. Today, I’m going to tell you how I used my sign-up bonus, how much value I got out of the sign-up bonus, and why I still have it today.

Evaluating Value Ground Rules

When evaluating value, I only include the sign-up bonus, the amount of points earned from the minimum spending requirement, and any additional benefits or bonus points earned through perks exclusive to the SPG program. Everyone’s spending habits are different so I don’t want to confuse the issue with all Starpoints I’ve ever earned.

This means that after hitting the $3,000 minimum spending requirement, I had at least 28,000 bonus Starpoints. I intended to cancel my card this year, but I was offered a retention bonus of 7,000 bonus Starpoints after spending an additional $1,000. I took the bonus so for this card I had 36,000 bonus Starpoints total. (After paying the annual fee for a few years, which I’ll discuss later.)

How I Used My Bonus Starpoints

I used bonus Starpoints in two ways: a transfer to an airline partner and a hotel stay.

For the airline partner, I chose British Airways. Redeeming British Airways Avios for Alaska Airlines or American Airlines flights to Hawaii from California is one of the best uses of points & miles. And I’ve used it a lot. I transferred my bonus Starpoints for a round trip flight from Oakland to Maui.

For the same trip from Oakland to Maui, I also redeemed my bonus Starpoints for two nights at the Westin Ka’anapali Ocean Resort villas using a cash & points rate as I discussed in my Maui Trip Report.

How Much Value I Got From My Bonus Starpoints

Flights from Oakland to Maui on Alaska Airlines in September were about $350. I transferred 20,000 bonus Starpoints to British Airways and used the resulting 25,000 Avios to book the flight. I saved $350 on this redemption giving those 20,000 bonus points a value of 1.75 cents.

The standard rate for our stay the the Westin Ka’anapali Ocean Resort Villas was about $360 per night. We paid with a cash & points rate of 10,000 points plus $180 per night. We saved $360 on this redemption giving those 20,000 bonus points a value of 1.8 cents. (As only a portion of those points came from my total bonus Starpoints, I calculate the remaining bonus as $288 value for 16,000 bonus Starpoints.)

As you can see, I redeemed those 36,000 bonus Starpoints for over $600! But I did pay some annual fees. Three to be exact so that brings the value of my bonus points down to about $350.

Why I Kept the Starwood Preferred Guest Credit Card

The answer to this question is simple too: lack of attention. It took me a while to figure out that I should cancel my points & miles credit cards rather than pay the annual fee for so many years. It also took me a while to figure out how to maximize my SPG redemptions. This example is a little deceptive because I redeemed a lot of Starpoints for hotel stays here and there before my trip to Maui, but I put a lot of my spending on this card before I had the Chase Sapphire Preferred. I also kept this card for one final  year because of the retention bonus. I doubt I will keep it open again.

For comparison, Reese had a completely different, and much improved, redemption strategy. When Reese got his Starwood Preferred Guest Credit Card, there was an elevated sign-up bonus so he earned about 40,000 bonus Starpoints. He transferred those points to Alaska Airlines and redeemed them for two one way tickets from LAX to Orlando on Virgin America. We saved $1,300 and our redemption value was 3.25 cents per Starpoint! That’s a huge improvement over the measly $350 in value I got out of my card. And Reese hasn’t (and won’t) pay an annual fee because he’ll cancel it first.

Between the two of us, we managed to net an incredible value from these bonus Starpoints but it took some trial and error to get it right. How will you use yours?