A New Option For A Favorite Program

The American Express Starwood rewards card is a favorite among rewards card holders in the know. With a range of easily redeemed hotel awards, and airline mileage awards that can be redeemed at dozens of airlines, this card offers the ultimate in non-cash reward flexibility.

Now, the Starwood Preferred Guest program has begun offering an option to redeem Starwood points for directly for flights, rather than for miles.

The way their program works, is that Starwood points, earned at a rate of one per dollar spent on all purchases with your Starwood Amex, can be redeemed directly for flights. The amount of miles required is directly related to the cost of the ticket. The first $150 dollars of the ticket require 10,000 Starpoints, with an additional 5,000 Starpoints for ever $65 dollars.

Do the math and you will find that you directly receive an airline ticket valued at ratio is 1.5 cents per point/mile for the first 10,000 points and 1.3 cents per point/mile thereafter. Business and first class international tickets are available, so the sky is the limit on what you might spend.

How Does The Value Stack Up?

Many cash rewards cards, like Capitol One, offer up to 1.25 cents per mile in cash back for most purchase, sometimes more in specific categories. At 1 cent, or 1.25 cents cash back per dollar spent, it is really a toss up as to whether you should use your Starwood Amex to accumulate Starpoints to redeem directly to flights. In this game, the tie always goes to the flexibility of cash. I would use a cash back card rather save Starpoints to be directly redeemed for flights.

As a direct comparison, we’ve previously observed that redeeming mileage for domestic and coach travel, yields 2-4 cents per mile, and a whoping 4-6 cents per mile when redeemed for business or first class travel. Throw in the 25% bonus miles offered by Starwood when you redeem 20,000 Starwood points for airline miles, and the option of redeeming Starpoints for flights looses a lot of it’s luster. Finally, you often have the option of changing award tickets purchased with airline miles, while tickets purchased directly with Starpoints are subject to all of the standard change fees.

Who Should Redeem Starpoints Directly For Flights?

While I can only commend Starwood for providing more reward options, in the long run, redeeming Starpoints for airline miles is a much more economical option, especially for premium international travel. Still, I can construct a scenario where this would be a usefull option. I did notice that you can redeem Starpoints for travel on airlines like Airtran and Frontier that are not included in the list of airlines programs you can transfer your Starpoints to. You can also purchase tickets from airlines like United and Continental that have a poor, 2:1 Starpoint to mile redemtion options. If I needed a flight exclusive to one of these airlines, I would spend my Starpoints before I paid cash.

It also appears that tickets purchased with Starpoints are themselves elegible for earning additional miles, a factor for many seeking to attain elevated status, athough Amex cautions you to verify this directly with your airline.

This entry was posted on Monday, September 15th, 2008 at 22:30 and is filed under Maximize your Credit Card Rewards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.