Enroll by July 31 for Starwood American Express 30,000 points

I have to wonder if SPG and American Express raised the cardmember bonus points offer from 10,000 to 30,000 points in anticipation of the new Hyatt Visa card to be launched in the next couple of months? This sure makes me wonder what kind of initial membership bonus will be forthcoming for the Hyatt Gold Passport Visa card later this year.

The current American Express deal for SPG members is sign up for a new American Express personal or business card by July 6 and spend $1,000 during the first three months of card membership to receive a 30,000 points bonus.

Update: July 15 – Lucky reports this offer has been extended to July 31. Links are provided on his One Mile at a Time blog here.

30,000 Starpoints exchange into 35,000 airline miles with almost two dozen airline partners.

But, that is not the best value for Starpoints in my opinion unless you are getting a high value premium class award ticket with the miles. There are several hotel loyalty programs – Carlson goldpoints plus, Hyatt Gold Passport, Marriott Rewards, and Wyndham Rewards with similar or better points-to-miles exchange rates than Starwood Preferred Guest.

30,000 points will get you one free night at Starwood’s über-luxury Category 7 hotel resorts like the St. Regis New York or Mystique on the Greek Island of Santorini.

But in my analyses I find the better value is generally to pay for a free night and save your 30,000 points for higher value opportunities.

I am writing about this deal because I see a high value opportunity for someone who may not typically stay at Starwood Hotels. 30,000 Starpoints can easily provide over $1,000 in real hotel savings and as long as you do not find yourself leaving a balance on your card that gobbles up the points value through interest payments, then you have a good opportunity to open up cheap access to Starwood Hotels using your 30,000 points sign-up bonus.

I generally do not write about credit card bonuses. My interest is getting people into hotels and not into bank card debt. We all hear the advice about paying off your card every month and you will have minimal expense from a credit card. That is great advice until you find yourself suddenly unemployed or you have an emergency, charge up the credit card to help with the emergency finance need and find yourself unable to pay off the balance the next month. Credit cards would not be propping up bank balance sheets if everyone could pay off their cards every month. The debt cycle keeps these cards highly profitable for the banks.

You can’t even buy 30,000 points for your account for $1,000

The value of 30,000 points is $1,050 based on the purchase price of Starpoints from SPG, however, the annual purchase limit imposed by SPG is 20,000 Starpoints in a calendar year. Lucky on his One Mile at a Time blog last week listed point values for several airline and hotel programs and he suggested the value of Starpoints is $25 per 1,000 points. This is a figure I support in general based on the ability to easily get that value when redeeming points.

That is still a $750 value for this credit card sign-up bonus.

The Real Value Opportunity for 30,000 Starpoints

I generally try to get $50 per 1,000 points value when making room redemptions and that is most easily achieved through SPG Cash & Points awards. These awards require only 40% of the points for a free night and a cash supplement saves 60% of the points cost.

There are many category 4 Starwood Hotels that will post room rates around $300 after tax that can be purchased with $60 cash and 4,000 points. The cash and points award will have a value of $240 for the 4,000 points redeemed for a free night. This is $60 equivalent value per 1,000 points and significantly more than the $25 per 1,000 points value suggested by Lucky.

The main drawback of Cash & Points awards are limited availability. Most Starwood Hotels are available on any given night in any given location for a standard free night award, but Cash & Points awards may only be available for about half of these hotels – sometimes more and sometimes less.

The other disadvantage of Cash & Points is no elite qualifying credit is given for the stay and the SPG member does not earn points on the Cash portion of the award night payment. Incidental spending does earn points and you need to contact the hotel if the stay does not post and you should have earned points from incidental spending.

Here are some sample Cash & Points values:

Le Meridien Vienna

• December 6-9, 2010 = 179 EUR/night or about US$220
• Category 4 hotel Cash & Points Award = $60 + 4,000 points ($180 + 12,000 points for 3 nights)
• $660 – $180 = $480 saved with 12,000 points.
• SPG Points Value = $40/1,000 points. 

Hotel Des Indes, The Hague, Netherlands

• May 16-19, 2011 = 255EUR/night or about US$318
• Category 5 hotel Cash & Points Award = $90 + 4,800 points ($270 + 14,400 points for 3 nights)
• $954 – $270 = $684 saved with 14,400 points.
• SPG points value = $47.50/1,000 points.

Westin Grand Cape Town, South Africa

• February 7-10, 2011 = 1,722 ZAR/night or about US$222
• Category 3 hotel Cash & Points Award = $45 + 2,800 points ($135 + 8,400 points for 3 nights)
• $666 – $135 = $531 saved with 8,400 points.
• SPG points value = $63.21/1,000 points.

Do you get the picture now?

30,000 points has the potential, when used with discretion, to save nearly $1,900 in hotel room rates at a hotel like the Westin Cape Town. That is a great sign-up bonus for a credit card that has no membership fee for the first year and $45 per year thereafter. 

Just don’t fall into the credit card interest payment trap.