Should Your Family Go for Gold?
I mentioned in my previous chapter that for most families, cash back rules. But of course, everyone is unique and there are situations when miles or points through regular spending make sense even for an average Joe. Let me describe a family I have in mind that would benefit from flexible points:
You have relatives in another state and can't drive there for whatever reason. You would pay for tickets if you had to.
The route is very expensive with cash, but a bargain with miles, such as British Airways Avios 4,500 miles one-way redemption for short routes. You are confident that you can beat 2CPM (cents per mile) and by that logic, Fidelity Amex card, which pays 2 percent cash back.
You can't or don't want to sign up for new cards.
You have several Starwood hotels in mind that are category 1 or 2 (running 2,000 and 3,000 SPG points on weekends).
You don't want to have more than 1 card for primary usage, choosing to forgo category bonuses for simplicity (that would describe my husband).
If you absolutely insist on earning miles, you will be better off going with flexible points, such as Ultimate Rewards or SPG points, which are earned through Amex Starwood Preferred Guest card. That way, you have a measure of protection in case one program devalues. I already described Ultimate Rewards program in the previous chapter. Here I would like to compare SPG Amex to American Express Premier Rewards Gold card, which earns Membership Rewards.
1) Which one has a lower annual fee? Gold has a fee of $175 and SPG $65. Obviously, Amex SPG is the winner.
2) Which one has more family-friendly (redemption-wise) airlines and hotel partners? SPG partners with British Airways and AAdvantage, both of which allow one-way redemptions. The program also has some low-category hotels going for only 2,000-3,000 points. Gold partners with British Airways (Avios program) and I don't see any good hotel options for a family. Amex SPG wins.
3) How quick are the transfers to airline programs? That's where Gold wins with instant transfers. SPG can take a week or more, a huge downside.
4) How do bonuses on miles transfers compare in both programs? Gold regularly runs bonuses on British Airways transfers, though there is no guarantee they will return in the future. The minimum amount is 1,000 points on each transfer. While SPG gives a 5,000 point bonus, you have to wait till you reach 20,000 points threshold. And that can take a while for low spenders. Still, the bonus with Amex SPG is a certainty, while with Gold it is not. Amex SPG wins.
5) Which one has category bonuses? SPG earns 1 point on everything other than their hotels. Gold earns 1 point on everything and 2 points on groceries and gas. Gold wins.
6) Is there a bonus on reaching a certain amount in spending? Not on SPG card. On Gold, you get 15,000 points once you reach $30,000 in spending. I debated whether to include this point, but there were some years we put close to $30,000 on credit cards because of big purchases or renovations. That bonus would make up for the fee. So Gold wins here.
7) Can you redeem for cash if needed?
Both points can be redeemed for gift cards, though only SPG partners with Amazon, which would be my number 1 choice. In addition, the gift cards redemption ratio is more favorable with SPG program, where you can redeem 14,000 points for a $150 Amazon card. Amex SPG wins.
8) Which point is harder to acquire? Membership Rewards points can be earned from other Amex cards, like Platinum. SPG points can only be earned from SPG card, aside from hotel stays. Amex SPG wins.
9) How much value does 1 point get when it comes to family-friendly redemptions? Once again, because of guaranteed transfer bonus on 20,000 points and low-category hotel redemptions, SPG wins.
Ladies and gentleman, Amex SPG wins, but not for all families. Here is the bottom line:
If you put around $20,000 on credit cards per year or plan to use Category 1 or 2 SPG hotel redemptions, Amex SPG may be a good fit. If you would like to have the option of AAdvantage program and don't need instant transfers, your pick should also be SPG card.
If you spend close to or more than $30,000 per year, spend considerable amount on groceries and gas, insist on instant transfers and don't care about AAdvantage miles or hotel redemptions, go for Gold.
Additionally, American Express has just introduced two new cards. They could work very well for many families looking to collect flexible points. The cards are called Amex EveryDay and Amex EveryDay Preferred. You can read more about them on www.americanexpress.com and in my chapter on “keeper” credit cards.