Okto

Now I'm thoroughly confused. Let's assume the case mentioned above of never staying at a Starwood property. Let's further assume that I spend $30K/year, and I'm debating whether I should go with the SPG card or the Premier Rewards Gold Card.
If my $30K/year spend is made of up of $3000/year in airplane tickets, $1000/month ($12,000/year) on groceries and gas, and the rest on everything else:

MR Points:
30,000 base points
+6,000 bonus points on airfare
+12,000 bonus points on groceries/gas
+15,000 bonus points for spending $30K/year
=63,000 points (>2 points per $1 spend)

Starwood Points:
30,000 base points
+ 7,500 bonus points (25% bonus when transferring to airlines)
=37,500 points

I'm new to the SPG program, so my question to the experts is: Do you still think that the added flexibility provided by SPG is worth the point difference vs MR if one's objective is to redeem for award flights?

Thanks,

divemistressofthedark

It depends on what you want, and on your spend pattern. Are you willing to buy things online? Are you willing to be really careful about always using the same card at the gas station and grocery - or you're only looking to carry one card?

What's your airline and hotel preference? Is your travel national or international? Will you be spending more or traveling more depending on the season? Are you going to be staying in hotels a lot, or relying mostly on CC spend?

There are a lot of variables to sort out, and the various card currencies and reciprocalities really do matter.

When it comes to earn and redemption, 37,500 SPG is not the same animal as 63,000 MR. Think of the different rewards programs as currencies with different exhange rates, and rates that vary depending on which currency you're using.

Let's say you're at a bazaar in Tunisia. Something you want costs either US$100 or 1000 Mexican pesos. It matters not what US$100 is worth in pesos - only what it cost you get each pot of money, how much you'll have left over in each if you spend from one of them, and whether your dollars or pesos will get you a deluxe model or something that's plain vanilla. Also, could you convert your money through, say, Chinese yuan, then spend the yuan to get something better and have a little left over? Are there special things you could do to make the yuan conversion possible? Could you convert the dollars and pesos to British pounds, then convert the pounds to yuan, and wind up with a huge pile of money that would be worth a lot more than either dollars and pesos on their own?

Just trying to make this all a little easier to understand, sorry if am failing miserably.

Edited to add: It's possible a person would be willing to tailor his or her own travel preferences to chains that offer greater value, but there are still some issues to consider. Starwood properties just don't exist a lot of places where Hilton, Marriott, Choice Hotels, Hyatt have a presence. This is a consideration for me, since I live in the southern U.S. and travel to a lot of ruralish areas. If you live in NYC, SF, DC, Chicago, or another major metro, it won't be so much for you. Also, airlines: Southwest doesn't fly to entire states of the U.S., so if you're looking for a good general carrier, it may not work for you.

Sorry to make this all so confusing, but I hope we've shown that investing time to figure all this out can really reap dividends.

S.Bling

I may be wrong, but my understanding of SPG is 20kSPG --> 25kmiles (in blocks of 20k for the 5k bonus). So your 30k SPG base points would get:
20,000 base points = 25,000 miles
10,000 base points = 10,000 miles
=== 35,000 miles (not 37,500).

Someone else can correct me if this is mistaken.

lifeandmylens

I am still learning about the spg card, but I think SBling is right on this one, although I am not sure, I think it's a 5k bonus on 20k point transfers, ie not flat 25%.

And the annual fee is higher on the rewards gold - so after factoring that in, and assuming 1 cent per point, it's about $150 in favor of the gold card for your example. But then factor in the redemption ratios/values for the points to an airline and you might be closer to even I am not sure. What I do know is I evaluated them both, (and actually I have them both my wife has the premier rewards gold and I just got the spg), but anyway the MR points for me are basically:

use them for gift cards
transfer to southwest
use them for travel

Since the gift cards and the travel don't seem to have a good redemption ratio, I am left with southwest (because of my travel destinations and departures most of the other transfer partners don't have nonstop flights that I like). I would prefer to transfer them to AA, but I don't think I could. And if I had too many points I could buy amazon gift cards at slightly more than 1% redemption with spg.

Another big factor is if you do stay at any spg properties the spg card seems like a great deal with points being so valuable with them. If I'm not mistaken, sometimes the redemption value here is over 2%.

I guess like the others said figure out what your spending patterns are, how you will use the points with either card, figure out the redemption ratios and then get the one that suits you best.

Okto

I prefer to use as few cards as possible so I can concentrate all my spend and, hopefully, maximize point accrual for rewards that actually are valuable.



Continuing with my original message, let's simplify the discussion by assuming no staying at Starwood properties and I'm mostly interested in award flights.





I completely agree and I realize that I used the wrong wording in my original message. Understanding that SPG points and MR points are different currencies, I'll try to ask this a little differently: If my intention is to redeem for award flights, are the 37,500 SPG points worth more, the same or less than 63,000 MR points ?

S.Bling

Firstly, I believe you mean "are the 30,000 SPG points worth more", not 37,500.

Having said that, in many circumstances the 63,000 MR points are worth more than 30,000 SPG points if your intention is to convert either of those balances to FQTV points/miles.

An exception would be if you wanted to transfer miles to one of the many (mostly international) airlines which MR does not participate with:
Air Berlin
Air New Zealand
Alaska Airlines
American Airlines
Asiana Airlines
Cathay Pacific
Emirates
JAL (Japan)
LAN (Lanpass)
Lufthansa / Swiss / LOT (Miles and More)
Qatar Airways
Saudi Arabian Airlines
Thai Airways
United
US Airways
Varig (Brazil)


The ones that jump out are AA and UA, as well as US. Three very large USA-based airlines that you cannot transfer MR points to.

Mind you, if you wanted to fly United, I wouldn't transfer to them, as you lose 50% of your points (their ratio is 2 SPG points per UA mile)
To redeem with UA, either transfer SPG to US Airways and then redeem on UA
or
transfer MR to Continental and then redeem on UA (don't transfer SPG to CO, as you lose 50% of your points, like with UA)

FWIW.

mia

The example omits the signup bonuses for both cards, and the 15,000 Starpoint bonus for spending $15,000 on the SPG card. I realize this may be intentional because the SPG threshold offer doesn't apply after the first year, but I suspect many will not renew the Premier Rewards Gold at $175 if there is an attractive offer elsewhere.

MR Points:
30,000 base points
+15,000 bonus points for new account
+ 6,000 bonus points on airfare
+12,000 bonus points on groceries/gas
+15,000 bonus points for spending $30K/year
=78,000 miles

Starwood Points:
30,000 base points
+10,000 bonus points for new account
+15,000 bonus points for spending $15K in six months
+13,750 bonus points (25% bonus when transferring to airlines)
=68,750 miles

The Premier Rewards Gold still looks better, but this will diminish if spending increases because SPG's 25% bonus isn't capped while the threshold bonuses are fixed amounts.


Correct, but in practice you would probably carry the 10,000 Starpoints into the next year and transfer them after accumulating another block of 20,000.

Okto

You are correct once again. Please excuse my "density".


Yes, I see how this can be an issue depending on route and airline award seat availability. Thanks for your insights.

beltway

This is unnecessarily binary. As divemistressOTD points out, there's the issue of whether you're disciplined enough to apply your spending to various cards with category multipliers. An example, using your spending figures:

$12K on gas/groc/drug = $600 of very flexible cash (Assoc Bank card w/5% cashback), which unlike miles can earn interest while held
{Since cashback is capped/annum, it's a good idea to get a second account (e.g., for spouse) and switch mid-year.}


$3K on airfare = 9000 MR points (Amex MR) OR 6-9K points in a specific airline program (using any of various affinity cards from Chase, etc.), including programs unavailable through Amex MR

$15K general spend = 15K SPG points (transferable to most airlines at 1:1.25 or usable for hotel stays)


And if you use Amex MR, don't forget to factor in the additional expense of the annual fee (what, $175?)

It really does depend on what you want out of a program (hotel stays? flexible use? int'l air travel in F on a specific carrier?), and whether you have other sources of miles/points (such as business travel paid for directly by your employer).

Okto

I omitted the signup bonuses intentionally because it only added confusion to essence of the question I had in mind. I am trying to think medium-term (3-5 years out) when it comes to credit cards/reward points. I'm definitely not opposed for signing up for promotional offers, but at the same time I find it hard to extract good value out of reward programs if every year I shift all my spend to a new product.

Regarding the $175 fee for the Premier Rewards card, it's certainly more than the $45 SPG fee, but it was actually the 15,000 bonus points for $30K/year spend that sold me on it. Compared to the $150 I was paying for the old Rewards Plus Gold card (that did not earn any bonus remotely close to this), this one is almost "free".



True, if we assume the spending increases in the 1X category. If the added spend is in the 2X or 3X category, the Premier would probably still hold up well.

Okto

Yes, it probably is. Please think of it as me taking baby steps in understanding this world of points and miles. I'm certainly not trying to convince anybody of anything; just trying to form a clearer picture in my head.


Being disciplined to apply my spending to different cards wouldn't be the issue - I can handle that. What I fear is accruing points/miles from different sources and not being able to then combine them in an effective way. Perhaps my fear is unfounded and I just need to learn more. That's why I'm here

Using the example you presented, I would end the year with $600 in cash, 9000 MR points and 15000 SPG points, minus $220 in card fees ($175 for Amex MR, $45 for SPG).

Combining all spend on AMEX MR would yield 63,000 MR points at a cost of $175. I'm just trying to understand if this is better value or not when redeeming for award flights.

I also realize, as you pointed out, that instead of AMEX MR cards, one could use an airline affinity card, yielding an equivalent number of miles with a lower (or non-existent) annual fee. But wouldn't this further reduce flexibility?


That is really the drawback here. However, the 15,000 bonus points help offset that cost and bring it more inline with the $45/year SPG card. It is actually the SPG card that is catching my attention.
Thanks.

beltway

Having a good points balance (say, 50-100K) in each of several programs can be a real plus, especially if you expect to burn miles/points in bits and pieces (e.g., for domestic coach or the occasional free hotel night). On the other hand, if you're hoping to score award tickets for a family of 4 to Europe or Asia, you don't have much choice except to concentrate on a single program. (That, or wait for a special opportunity to buy miles, transfer them, or earn them via special partner promotions like this USAir free-for-all.)

It depends. Continental miles don't (yet) expire, and as of late last year can be redeemed for travel on any carrier in Star Alliance, the biggest of the global alliances. (Ditto for USAir. Although those miles expire, US's partner award chart -- even after the latest revisions -- has some real bargains.) OTOH, United is notorious for "StarNet blocking" (limiting use of UA miles for awards on partner airlines).

See the FT forums for each of these airlines for more on these issues.

divemistressofthedark

Woohoo! I finished my work and can play on FT some more

You know, I'd really consider getting both cards. You could try PR Gold free for a year and see if it works for you in combination with MR. Try this strategy on for size:

PR Gold for your grocery and gas spend - oh, and you'll get 3:1 on any airline ticket you buy, by the way, along with options for trip insurance like baggage protection - up to $500 if your bags are 24 hours late, $250 if your flight is delayed past 9 PM, etc. (I've had great luck with this insurance, for the record. Minimal hassle, claims paid nearly instantly, helpful call center staff, etc.)

PR Gold is also your card of choice for anything you can buy from a major retailer online through Bonuspointsmall.com. One of my favorite tactics is 3:1 through Bonuspointsmall at Bestbuy.com, selecting "pick up at local store," then cruising down to the local outlet that same day. Of course, opportunities arise with retailers as well - since I buy so much from Best Buy, I recently was upgraded to its Premier Reward Zone. Now I get 3:1 on the Amex and a 25% Reward Zone bonus. Hub and I average about $25 per month in bonus certificates from Best Buy these days.

Use SPG for nongas, nongrocery major purchases you can't make online - car repairs, appliances, dinners out, etc.

Completely agree. Also, if you're a bit short on the SPG side, you can always top up SPG with MR. It's a respectable rate for points you've earned using airline ticket purchase or Bonuspointsmall - 3:1 - but please do note that the reverse isn't true. SPG>MR was formerly available, albeit with a huge point devaluation, but now I don't even see the option to perform that transfer on SPG.com.

Since each cache is its own currency, you'll have to think before you redeem: MR either "costs" the same as SPG, with the multipliers, or it's less valuable for transfer through SPG to SPG partners. (3:1 through the Bonus Mall or for airfare is the same as the 1:1 you'd get on SPG for everyday spend if you're going to transfer MR>SPG at 3 MR:1 SPG.)

On the other hand, your earn will be easier on MR for 1:1 transfer to Delta (DL), since you'll be getting those double and triple multipliers. You'd definitely want to transfer MR>DL, rather than SPG>DL - even though both SPG and MR are 1:1 to DL - because you've earned the points through MR two to three times more easily.

The only drawback I can think of to a couple different pots of points is that you have to be able to "afford" roundtrip award travel using points. One-way flights on DL and CO, two MR partners, "cost" the same in points as do roundtrip tickets. Southwest (WN) was a major exception to this: one way tickets were half the RR points - but as they'll no longer participate in MR, it's a moot point.

Frontier (F9) is still a good option for MR, though, since its redemption is so low - 1:1 transfer and only 20,000 points for a free roundtrip. This is true particularly if you don't mind transferring through Denver or spending some time there - it's one of my favorite vacation spots, personally. For the record, I haven't ever had any availability issues with F9, and I've run the MR>F9 Early Returns transfer many times. Although, granted, I live in a smaller metro.

You can also redeem MR for merchandise, concert tickets, even fine dining. The redemption rate isn't generally good but you may find some occasion to use one of the programs. Also, MR's been expanding its members-only concert presales outside the NYC/Los Angeles axis, a real boon for we live-music aficionados.

Again, you can always try this strategy for only $45, since PR Gold's free the first year. (You will get a hard inquiry on your credit rating for both, though, so don't do this if you're planning another major purchase in the next couple of months.) Nothing would stop you from cancelling either card once you determined what would work for you. But then, you could keep them both, if you decide the flexibility offered through using them in combination is a match for you.

Good luck! DD

beltway

Note: re the 15K MR bonus for spending $30K in a year, I don't think you can expect to see that until a few weeks after you hit the target. That means that if you're reaching $30K in December, get ready to pay the annual fee in order to avoid forfeiting the bonus that hasn't yet posted.

Okto

Yes, after thinking about this for the better part of the day, I think this is a good idea. After all, my spend will easily exceed $30K for the year and putting the non-2X and non-3X purchases on the SPG will help accrue more flexible points, and yield the 25% bonus when transferring to airlines.