Today we’re wrapping up our introduction to earning miles without flying by looking at credit cards you’d use every day.
Much of the year my credit card spending is tied up with cards that I’m trying to hit a minimum spend on so I can earn a bonus (right now, I’m finishing up the spend on my Chase Sapphire Preferred card, and I’ll be starting the $1,500 spend for my Citi AA Visa card soon). But when I’m not working on a bonus, my daily card is the Starwood Preferred Guest Amex (apply here for personal card and here for business card). You do not actually need a business to apply for the business card – a sole proprietorship (ie, you being yourself) counts. Your spouse can also get his/her own cards and bonuses associated with each. The nice thing there is that Starwood has “household accounts” allowing you to transfer miles freely between accounts as long as you and your spouse have the same address. Right now, Starwood is offering a bonus of 10,000 miles for getting the card and 20,000 additional miles once you spend $4,500 in 3 months (first year fee waived, $65 thereafter). Assuming you’re plowing spend onto that, between you and your spouse you can earn 120,000 Starwood points with $18,000 in spend. That may seem like a crazy amount to you – don’t worry about it if it is. That 10,000 mile bonus is still pretty good, plus there are other reasons to get the card.
Why am I a fan of the Starwood card? First off, earning Starwood points through stays at Starwood hotels is a bear. If you’re not an elite member (and if you spend $30k/yr on this card they’ll give you Gold status, which isn’t worth much, but there ya go), you’ll earn 2 points for every dollar spent for stays at Starwood hotels, meaning a $150 hotel room earns you 300 points. Good luck getting a free room when a decent room at a “category 4” Westin costs 10,000 points a night. However, with even a modest amount of spend you’ll be getting free nights pretty quickly since you earn 1 point for each dollar of spend on the card.
Secondly, and perhaps most impressively, Starwood points transfer into airline frequent flyer programs at a 1:1 ratio (except for Continental, which gives a sad 1:2 – ie, half – ratio) and LAN which offers a 2:1 ratio, but that’s primarily because their program is in kilometers, not miles (read details on maximizing the LAN transfer here). Moreover, they give a 5,000 point bonus for 20,000 mile transfers, meaning that if you transfer 20,000 miles to, for example, Alaska Airlines, you’ll actually get 25,000 miles in the account. Doing the math, you’ll see that you’re actually earning 1.25 airline miles for every dollar of spend. Great, right?
On the hotel redemption side, Starwood has a really wide range of hotels including nicer ones on the low end (Aloft/Element) and amazing ones on the high end. With the Cash and Points program you can find yourself in a Category 4 (ie, a regular Westin, roughly) for just $60 + 4,000 points instead of 10,000 points. It’s a great deal.
There are a couple of minor drawbacks to the SPG card: if you travel internationally they do charge you a foreign transaction fee. That is, frankly, annoying. Also, if you do a transfer from points to an airline program it can (though not always) take days or, in a few cases, weeks for those points to show up. That may not matter, but if you’re looking at a quick trip, that’s not going to work for you.
Other folks I respect (ie, here) love the American Express Premier Rewards Gold card (see here). It offers a 15,000 point bonus with Membership Rewards after a $1,000 spend in months. Annual fee is $175, though it’s waived the first year. People like that it earns double points on gas and groceries and triple points on airfare. If you are able to buy your business travel flights on your own credit card, this may be a good option for you as a day-to-day card (ie, my occasional $5,000 business class ticket to Europe would earn me 15,000 Membership Rewards points just from the purchase). I find the $175 annual fee to be excessive for my spending habits (I’m actually not permitted to put my business travel on a personal card).
The Membership Rewards points, though, are a great program because of the flexibility of the points. Sure, you can transfer them on to gift cards (generally at a 100 points – to – $1 ratio), but the real benefits come from the flexibility to transfer points into great programs like Aeroplan and ANA (that Air Canada and the former All Nippon Airways, respectively). People love Aeroplan because they offer some pretty great redemption options (90,000 miles for business class to Europe, though they’ve recently changed their award chart to be less valuable) – see here for details, and they love ANA because with their distance-based rewards you can get some great values (63,000 ANA miles for a business class ticket on Virgin to London which until recently did not require Virgin’s outrageous fuel surcharges). That flexibility is quite valuable, as you have a much wider range of airlines to choose from when making a reward booking.
Finally, The Points Guy has been saying that the Chase Sapphire Preferred card is the best for everyday spend because foreign fees are waived, you have the flexibility to spend the Chase points on airfare on a 1:1.25 basis (ie, 10,000 points gets you $125 worth of airfare), or you can transfer on a 1:1 basis to Continental, and because you get a 7% bonus on all your spend at the end of the year. That all said, I still think SPG is more valuable because of the flexibility to use those points at Starwood hotels or on a bunch of different airlines. However, if you travel internationally a lot, the Chase card may make more sense because they are not charging you a ridiculous 3% fee on foreign transactions. You’ll have to do the math yourself to determine whether it’s worth it to you.