Credit Cards Not Earning Their Keep

Two years ago, the Starwood Preferred Guest Card from Amex was having an amazing deal: 35,000 signup points (worth at least $945) and $95 annual waived for the first year.  The card offers other great perks including the ability to reach elite status faster, no foreign transaction fees, and potential to earn valuable Starpoints.  Read more about how SPG is funding our trip.  

 

The Dilemma

However, Paige and I are not insane “churners” (people who open as many credit cards as possible to get the benefits and dump the cards shortly after).  All credit cards can lose steam.  While we initially loved the card, we haven’t made the card worth its $95 fee in year two.  Since we’re committed to the Chase trifecta, we mostly use this card at SPG properties (which is not often).  Thus, I weighed my options on what to do with this card (from best case to worst case):

  1. Call the Amex Retention Department.  Keep the card and try to get an offer that, at minimum, covers the annual fee.
  2. Switch to a no-fee Amex.  By doing so, you keep your credit open and earn points (although fewer) with a no-fee card.
  3. Cancel the card.  This is the most straightforward option, but it lowers your available credit and, potentially, your credit score.

 

The Result

Option 1 was a success and I got an excellent redemption offer!  How did I do it?  I said I wanted to cancel my card and told them why.  First, the Marriott-Starwood merger was making me unsure about the future of the SPG loyalty program.  Second, I was able to earn more valuable points with my Chase cards.  I told them I loved Amex and their customer service, but was not getting the value of my annual fee.

Once I told them my reasons, they quickly gave the option between two retention offers!  They offered either a $100 statement credit or 7,000 points if I spend $1,500 in the next 90 days (worth at least $189).  I took the points; it was a no brainer.  Since we’re staying at some SPG hotels and will have a number of non-travel and dining purchases, I know I can hit the $1,500.

After spending less than 5 minutes on the phone, I walked away with at least $94 and I got to keep the card!

 

 

Comments

  1. PFT

    Hot take… I think you made the wrong choice.

    The opportunity cost of not spending $1500 travel/dining dollars on your Chase Sapphire card is 4500 points, or $99 (Paige says each Chase point is worth 2.2 cents in her post on 10/16).

    So I see their options as $100 statement credit, or something worth $90 ($189 of value minus $99 of opportunity cost).

    Unless you were going to use the SPG card anyway, in which case the opportunity cost is lower.

    1. Post
      Author
      BZ

      We were going to use the SPG for $1,500 worth anyway. We have a few SPG properties on the horizon (getting 2 points per dollar on SPG versus 3 on Chase) and have a few other “no category” spends (1 point per dollar, no matter the card being used).

      The math is definitely close and probably could use a bit more analysis, but I think it was the right move.

  2. Raige

    As Ben wrote in that post, we’re only using this card for $1,500 at SPG (and non-travel and dining places).

    Option 1: $1,500 with SPG card at SPG properties
    3,000 Starpoints + 7,000 Starpoints for retention = 10,000 Starpoints
    $270 in points – $95 annual fee = $175 value

    Option 2: $1,500 with Chase card at SPG properties
    4,500 Chase points
    $99 in points + $100 credit – $95 annual fee = $104 value

    And if we’re spending the SPG card on non-travel and dining (cannot use the Freedom unlimited abroad due to foreign transaction fees), then it’s an even better deal.

  3. PFT

    Never forget that this was the year takes became more important than reality…

    But if the SPG points are worth $270, no argument at all. Ben said $189!

    The “no category” spends are still worth more on the Chase card (1.5 multiple) but the opportunity cost shrinks the more you spend there. I assumed most of what you would do abroad would count as travel/dining, but what do I know? And I completely agree if you’re going to spend it at SPG hotels anyway.

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