When Will AmEx Stop Issuing SPG Cards?
Sep 22, 2016, 2:06 pm
#16
Join Date: Mar 2014
Posts: 322
Looks like they took a page out of Hyatt's credit card... perhaps they found it made more sense to the average user to award them a benefit which is easily translated - points values (especially such a low number) are meaningless to the uninitiated. "This Chase card will get me 40,000 points vs. this SPG card with only 25,000 points!" While the old offer is still available, I'm glad I applied and got my spending going on the original offers - especially since I was able to take advantage of the 2500 bonus points for an AU.
Sep 22, 2016, 6:03 pm
#17
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Join Date: Aug 2009
Location: Left Coast
Posts: 862
There's a corroboration regarding the 2018 date in this article, but from a different angle:
But unsurprisingly, it seems SPG is not terribly significant to AmEx:
Hyperzulu may be correct; maybe this is a trial balloon to see if nights are more effective at getting new customers. But when these kinds of co-branding contracts are signed, doesn't the issuing bank typically agree to buy a fixed quantity of points/miles/whatever, which they can then distribute as they see fit? So in other words, would AmEx have a certain amount of SPG points that they need to dispose of before 2018?
Anyway, there seems to be little incentive for AmEx to boost the signup bonus. Another perspective with some interesting numbers:
Originally Posted by Motley Fool Writer
Starwood Hotels, another major co-branding partner, was acquired by Marriott in April of this year. Marriott currently partners with JPMorgan Chase for its co-branded credit cards, giving the megabank an inside track to take the Starwood business away from Amex when its contract is renegotiated in 2018.
Originally Posted by Business Travel News
Should Marriott terminate Starwood's relationship with Amex in favor of Marriott's co-branded program with JPMorgan Chase, Amex stands to lose its second largest co-branded partnership after Delta. Amex's Starwood portfolio of cards is worth 2 percent of Amex's 2015 billed business and 4 percent of 2015 loans.
[...]
The Starwood portfolio is not as large as the Costco portfolio, which represented about 8 percent of Amex's 2015 billed business and 19 percent of loans. But Starwood is "meaningful enough to hurt given other challenges faced by [Amex]," including its ongoing trial with the U.S. Department of Justice, according to a research note by RBC Capital Markets analyst Jason Arnold.
[...]
The Starwood portfolio is not as large as the Costco portfolio, which represented about 8 percent of Amex's 2015 billed business and 19 percent of loans. But Starwood is "meaningful enough to hurt given other challenges faced by [Amex]," including its ongoing trial with the U.S. Department of Justice, according to a research note by RBC Capital Markets analyst Jason Arnold.
Anyway, there seems to be little incentive for AmEx to boost the signup bonus. Another perspective with some interesting numbers:
Originally Posted by credit suisse
Why Credit Suisse sees it differently: "We rate AXP underperform as we see: 1) Increased competition for co-brands has raised the cost of these contracts 20% or more (Delta/Starwood) while others with well over 10% of spend have left Amex (Costco US and Canada, JetBlue). 2) Rising rewards costs. 3) MDRS are under pressure and will decline in 2016 and beyond. 4) Amex is exposed to rising rates (3% of EPS for a 100bp increase) while competitors benefit and will likely market more aggressively in their card businesses 5) While the company is reducing expenses and buying back stock, these efforts are already in the estimates."
Last edited by zippy the pinhead; Sep 22, 2016 at 6:07 pm Reason: Added link & info
Sep 22, 2016, 7:23 pm
#19
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Which are still available (see post 14 for a link).
But of course if you were hoping for 30k or 35k for the same trouble (say, because you missed out on last spring's surprisingly-timed 35k offer), it's a letdown. (Especially if all you can apply for is the business version, and that mean you need to do $5k spend in 3 months, not just $3k.)
But of course if you were hoping for 30k or 35k for the same trouble (say, because you missed out on last spring's surprisingly-timed 35k offer), it's a letdown. (Especially if all you can apply for is the business version, and that mean you need to do $5k spend in 3 months, not just $3k.)
Sep 22, 2016, 7:30 pm
#20
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Which are still available (see post 14 for a link).
But of course if you were hoping for 30k or 35k for the same trouble (say, because you missed out on last spring's surprisingly-timed 35k offer), it's a letdown. (Especially if all you can apply for is the business version, and that mean you need to do $5k spend in 3 months, not just $3k.)
But of course if you were hoping for 30k or 35k for the same trouble (say, because you missed out on last spring's surprisingly-timed 35k offer), it's a letdown. (Especially if all you can apply for is the business version, and that mean you need to do $5k spend in 3 months, not just $3k.)
Sep 25, 2016, 8:09 am
#21
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Sep 25, 2016, 8:19 am
#22
Join Date: Nov 2012
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So is the new two free nights SPG card considered a "new" product and therefore exempt from Amex's once per lifetime restrictions?
Sep 25, 2016, 8:24 am
#23
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Sep 25, 2016, 8:32 am
#24
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Signup bonus changes never = new product
This is the fourth change in 12 months, 25k, 30k, 35k, 2 nights.
Sep 26, 2016, 1:02 pm
#25
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Dec 27, 2016, 2:51 pm
#26
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Returning to the original question, it appears American Express will continue to issue SPG cards at least through all of 2017:
https://skift.com/2016/12/13/expedia...ime-they-meet/
Laura Paugh, Marriott International’s senior vice president of investor relations, on Dec. 6 at the Barclays Eat, Sleep Play – It’s Not All Discretionary conference in New York....“Marriott last year did about $120 million of branding fees associated with our credit cards,” Paugh said. “Starwood did roughly $30 million or so associated with their credit cards, as you know, in 2015. Marriott uses a JP Morgan Chase card. Starwood has an American Express card. We have agreements with both of the credit card companies that permitted us to link our loyalty programs and we’ve got some marketing programs associated with both of those that permit people to accelerate the points they’re earning right now. We’re already seeing improvements in card usage. We still need to negotiate with both of them and that’s still something that we’re working towards. I wouldn’t expect to see anything before probably the latter part of ’17 at the earliest.”
Dec 27, 2016, 3:01 pm
#27
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Dec 29, 2016, 5:13 pm
#28
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FWIW, there's precedent for two separate card issuers for one reward program - both Citi and Barclays issue AA cards.
Dec 29, 2016, 5:17 pm
#29
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...also American Express and Citi issue HHonors cards, but I think it is prudent to assume that Marriott will choose one partner, and be pleasantly surprised if they choose to keep both
Dec 29, 2016, 7:33 pm
#30
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In any case, with US and AA it was simple: They both used airline miles which were equivalently valued. So it was relatively seamless for Barclay to convert its US card to an AA card.
SPG and Marriott are quite different. SPG is an outlier hotel program whose points are valued similarly to airline miles. Marriott is a more typical hotel program who points are on a completely different calibration than airline miles. (We know specfically than a 1:3 conversion ratio has been established between them.)
So the question is which program will survive. Assuming it's the Marriott program that survives, Amex would have to replace the SPG card with a completely new Marriott card to continue with the new program.
The thought of Amex converting an SPG card 1:3 into a Marriott card "on the fly" brings back one (simpler) reference memory: Diners Club USA used to earn 2 points per dollar and require 2 points to convert to 1 mile, and then one day (back when Citi was still running it) they "recalibrated" and went to earning 1 points per dollar and requiring only 1 point to convert to 1 mile.
Is there any other precedent of cards "recalibrating" instantly while people continue to use them?