Comparing credit cards: Starwood Amex wins

What is the best rewards program credit card? Asking Google this question returns countless pages of cookie-cutter credit card “review” sites which display only the cards of their “partners,” and don’t show you the information you need to make a decision.

Using the values we calculated for airline miles and hotel points, we are able to easily compare credit cards tied to specific rewards programs. We tried to include the flagship card for every major U.S. rewards program in our analysis (no bias for cards that we get credit for people signing up for through us) The results are summarized in the table below:

acruw | comparing credit cards

The list is sorted by the value of rewards received per $ spent on “all other purchases.” Also shown is the value of the initial sign-up bonus (i.e. 25,000 miles for signing up), the annual fee, the value of rewards received per $ spent at the applicable hotel or airline, and the value of rewards received on another category of spending (i.e. more points for spending on Gas, Travel, etc.).

The Starwood American Express card is the clear winner here, but not entirely for reasons reflected on the chart above. What sets it apart is flexibility, demonstrated by comparing cards in the following 3 scenarios:

Using the card to earn hotel nights: If you plan on using your points for hotel stays, then clearly the Starwood card is a good option, providing a value of 2.3 cents per $ spent, as is the Hilton American Express card, which provides nearly the same value for “all other purchases” and even higher value for spending at the hotel and on good “everyday purchases” categories like grocery stores, drugstores, gas stations, restaurants and wireless phone bills.

Using the card to earn free flights:  The Starwood card retains much of its value, even if you use the card for free flights rather than hotel nights (by converting 20,000 SPG points to 25,000 airline miles). In this case, the value per $ spent is 1.8 cents, which is still higher than nearly every airline on the list, and you get flexibility of being able to redeem on multiple airlines. For comparison, the Hilton card value sinks to 1/2 cent if you use the points for free flights. Airtran and Southwest also offer good value as a flights card (the “annual perk” for southwest is 2 bonus Rapid Rewards Credits each card anniversary). Additionally, the Delta Platinum card includes a free companion ticket each year.

Using the card for cash back: Even if you decided to curtail your travel and use the card to simply provide cash back, Starwood remains a viable option, unlike virtually all other rewards program cards. (You can’t redeem for actual cash, however you can get an amazon gift card, which is essentially the same thing).  The value in this case is 1 cent for each dollar spent, on par with most basic cash back cards on the market. You could do better with a cash back focused card, but then you give up the option to redeem points for nights or flights at higher valuations.

If you found this post or the acruw site useful and would like to help us out, we get credit for people who sign-up for the following credit cards through us (this list used to be longer, but apparently some of them expired 12/31/08). Just click the appropriate link below:

• Starwood American Express
• Delta Platinum American Express
• Northwest Visa Signature

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