Starwood American Express Card Hikes Annual Fee To $65

The annual fee for the Starwood American Express card is going up from $45 to $65. Is it worth the price to pay for the right to use a credit card?

Fans of the card enjoy that the card gives you a hotel point for every dollar spent and those points can be exchanged for hotel nights, or for frequent flyer miles. And if you exchange the points in big blocks, you can get basically 1.25 miles for every buck. But is it still worth it after the $20 increase? NYT columnist Ron Leiber thinks so. As long as the system works for your spending pattern, the rewards program is pretty flexible compared to other credit cards. In addition, the card is adding two new features this year: 5 free nights of extra credit to help you qualify for elite status, and a 3rd free night at Sheratons after paying for two nights.

Personally I’m not into rewards programs because I think they’re psychological traps designed to lure you into spending more money. On some mental level, you’re justifying extra spending because you think of it as “earning your way” towards something. But I know not everyone agrees with me.

The Starwood American Express Card’s Higher Annual Fee [NYT]

Comments

Edit Your Comment

  1. obits3 says:

    Just say no…

  2. RyGuy1152 says:

    No way! Not when there are so many great (free) rewards cards out there.

  3. APFPilot says:

    I pay for the american express card that i use for work but because the points are worthwhile and i like the idea of no preset limit.

    • YouDidWhatNow? says:

      …go on and try to charge a new Bugatti and see how that “no preset limit” works out.

      Or just give it to me and I’ll let you know where the limit is.

      • sleze69 says:

        My father used to charge huge business dinners to his Amex Platinum card all the time. Those were $20k a pop. I am sure that the Amex Black Card could buy your Bugatti…assuming the dealership accepted it.

      • JMILLER says:

        There is not a PRESET amount on it. There is a limit, it is just not preset. The limit varies on many factors.

  4. Preyfar says:

    I have a Starwood AmEx card for my business, and I get about 6-9 free hotel stays a year. This is great for me because I tend to go to conventions, and can us my stays for free and save a lot of money. Better yet, whenever I stay at a Starwood hotel and use my Starwood points via AmEx, they give me free gift baskets filled with random (and really wierd) stuff like Starwood rubber duckies, chocolates, mints, even meal coupons at the hotel restaurants and in one case $25 off of room service.

    Couple that in with all the money saved by not spending a penny at hotels that charge $200+ a night… if you’re the right kind of person, $65 a year is worth it.

    I’d rather have the cash back, but I’ve been pleased with the Starwood card. The hotels treat me like a freakin’ VIP.

    • careycat says:

      Starwood Hotels treat me like a VIP too w/that card. And I’m not a business customer, nor a Starwood / Amex employee!

    • usa_gatekeeper says:

      It also doesn’t hurt when the card holder is able to expense the annual fee, letting his or her company pay (expense) it while personally enjoying the benefit.

    • UnicornMaster says:

      Agreed. The extra $20 is worth it for this card that is rated THE BEST in rewards cards. I can get 5 free nights before you can buy a flight on a wednesday afternoon.

      Also, if you’re disciplined and pay with the card every time you can and pay off the card every month, the bonuses are all free and you only spend money on things you would have purchased anyway. It’s a good habit and I don’t think about the points I’m making, just making purchasing decisions on a case by case basis.

  5. pantheonoutcast says:

    I didn’t know there was a “right to use a credit card.” What Amendment is that?

  6. unlikelee says:

    we use as a pseudo “debit card”, pay it off every month, and for our yearly vacations our hotels end up being free..so even though they raised it $20 per year, the free hotels on vacations are really valuable to us when we travle.

  7. common_sense84 says:

    Why would anyone have a credit card with an annual fee? What a scam.

    • SOhp101 says:

      Because anyone that travels a lot knows that the decent credit cards that reward with air miles/hotel points ALL charge an annual fee. If you don’t travel, you’re absolutely right.

    • azntg says:

      Non-rewards credit cards with an annual fee = scam designed to separate money from those desperate for credit of any kind or those who simply don’t know better.

      On the other hand, not all rewards credit cards with an annual fee are scams. Sometimes, the perks offered can be worth more than the AF (and is not replicated by a rewards credit card with no AF)

    • jbandsma says:

      My Amex gold has an annual fee but no interest rate and no preset limit. What I pay for the fee is a whole heck of a lot less than I’d pay in interest.

  8. madanthony says:

    It’s not useful to me, because I don’t travel that much, but if you travel a lot, it would seem pretty easy to add up how much you would have spent on hotel rooms, subtract the fee, and see if that seems like more than you would get with a comparable card.

    I use Amex Blue Cash, which gives between 0.5% and 5% depending on how much you’ve spent in the year and type of store. I usually get back about $200 each year.

    As far as making me spend more, no. I don’t spend to get cash back, it’s just a bonus for buying stuff I’d buy anyway, like groceries. I also like being able to do chargebacks, getting the float between when I buy and when I have to pay my bill, and being able to keep track of my spending on an itemized statement rather than have to track cash.

  9. crazedhare says:

    I do not participate in points schemes. My single credit card (picked because of interest rate available at the time) happens to offer points, but it is no annual fee. I can, and do, exchange the points for cash. I then pay that cash toward any outstanding balance. I would never get a card for points, and I don’t sign up for the spam-generating rewards clubs either. Ben, I often disagree with you but I totally agree on the anti-points thing.

    • LinebackerU says:

      You avoid the money pit that is an annual fee, but dive right into the hole of carrying a month-to-month balance.

      • crazedhare says:

        Yeah, sorry. Next time my husband has to quit his job because I nearly died in childbirth and someone who can walk has to care for the child while I’m in the ICU, and then 2 months later the child gets cancer requiring a family move out of state to a pediatric oncology hospital, but then dies 7 months later, I’ll be sure to pick up my finances a little quicker. You know, so that what I do with my money doesn’t inconvenience *you*.

        Yes, this is literally true.

        • sonneillon says:

          WOAH! calm down. I think he’s just saying that if you are avoiding a yearly charge by keeping an annual balance you are in essence doing the same thing. Yeah it is a shame what happened but I don’t think he necessarily deserved that stiff rebuke in this instance.

          • crazedhare says:

            Yeah, sorry, I disagree. Someone wants to be a judgmental dick, they can come walk a mile in my shoes before they do it.

            Why don’t you try and see how you feel?

            • LinebackerU says:

              Don’t care what you do with your finances, but you seemed to be giving financial advice in your first post (advice to look for a low interest rate and to carry a balance, while avoiding paying a yearly fee for a rewards card). It’s poor advice.

  10. YouDidWhatNow? says:

    Can’t comment on this one specifically, but in general you’re just nuts if you don’t sign up for every membership program you might possibly ever use. Every hotel, every airline.

    Just get the points. If you never use them…then fine. But there’s no point (ha!) in not taking advantage of the programs.

    …so long as they’re free, I guess. I have a membership with practically every hotel and airline there is, but those are all free. Get your points. Use them or don’t – but at least you’re giving yourself the chance that way.

  11. ericschmidt says:

    Absolutely no offense intended, but you might keep in mind that the average reader here is not quite your typical Starwood American Express customer, in terms of who reads/contributes to this blog, or has time to do so, and what the average story here is about. So no doubt the comments on this story will be biased in a certain way…

  12. Jacquilynne says:

    I could see the justification that some loyalty programs prompt you to spend more money — I know I’ve bought groceries I otherwise might not have because they had Airmiles attached to them — but I just don’t see it with a credit card. The logical connection is just too remote — I don’t think ‘oh, if I spend this money AND I put it on my credit card AND I spend a bunch of other money, I will eventually get a free plane ticket’ is that convincing, even on a subconscious level.

    I suppose using your credit card instead of cash might make people spend more money than they would otherwise, but that’s more of a result of the disconnect to how much money they’ve already spent vs. how much they have left. It would be true of a non-rewards card, as well.

    • madanthony says:

      I think the whole “spending more on credit than cash” depends on the person. I put pretty much everything on my credit card and pay it off every month, and I tend to log in pretty regularly to see what I’ve spent, so all the little stuff adds up into one figure I keep track of. With cash, which I pretty much only use when I have to, I don’t really keep track of it as closely, it just kind of flows in and out.

  13. sponica says:

    I sort of see how rewards programs are a trap, and both of my credit cards are rewards cards. One became rewards suddenly overnight it seemed (it’s cash rewards, if there’s no balance at the end of the year I get money…if there is a balance, it goes to that.). The other card is the Disney rewards card…which is nice to have if you do like to stay on the resort because the package is interest free for 6 months if charged to the Disney rewards Visa. While interest rates are irrelevant if you pay in full every month, sometimes things don’t go that way and it’s nice to have a cushion.

  14. artgoddess80 says:

    I’d rather not pay $65 a month to give Amex the pleasure of charging me interest on my purchases. No fees please. I use Discover which gives you cash back and hardly any restrictions.

  15. TehLlama says:

    If card issuing companies issued markers that indicate how much you’d have to spend in order to break even, very few people would use cards with annual fees, though the fewer that would opt in for those would likely be even more satisfied with their cardholding experience.

    I run no-fee cash back cards – while never the most direct rewards, these aren’t any direct cost to me, and that ‘measly’ 1% back actually adds up to decent money when daily expenditures are on them (bear in mind this is only worth it if you’re not carrying a balance – these cards generally have APR’s that would make you want to break out the astroglide). I do think probably half the people with starwood cards have made a very smart choice, and for the vast majority of those the $20 difference per annum isn’t going to be a significant change.

  16. Entchen says:

    I was dead set against paying for a credit card until recently. I crunched the numbers and realized that the $40/year card with 2% cash back for grocery purchases and 1% on all other purchases would give me more cash back than I was earning on my free cash-back card. Subtracting the $40 fee, my annual cash back bonus will be about $100 more per year compared to the free card. I wouldn’t want to pay to take part in a points program, however: if I couldn’t travel x number of times in a year, the points might go to waste.

  17. flip says:

    Since when does a CC company “reward” you?

    They’re rewarding you for getting a job well done lining their pockets with your money. You know, the interest you pay.

    • frank64 says:

      Really it is the merchant fees they are giving you the cut on. The interest would just be icing.

    • athensguy says:

      Your crystal ball must be a little blurry if it thinks I’m paying interest on my CCs.

      Now, my mortgage on the other hand…I’m working on it but it will be years.

  18. nosense22 says:

    Only if you travel a lot, are really loyal (or likely have an employer who pays for your hotel). Then it’s worth it, because your freebies are worth $65 a year, likely more (SPG probably knows this).

  19. Max5695 says:

    I agree that rewards cards do encourage some people to spend more in the belief that it will earn them greater rewards. Credit cards in general make people spend more. If you don’t have enough cash, you would skip buying stuff that you might buy on impulse.

    When credit card companies raise their annual fees, it could lead to other companies raising their fees.

    If you have a credit card that suddenly imposes an annual fee, you need to complain. Threaten to cancel your card. Often credit card companies don’t want to lose customers and you can get the annual fee waived. If we say nothing when credit card companies raise annual fees, they will simply get more bold and make annual fee increases more common.

    If you don’t like the annual fee, cancel the card. There are plenty of other rewards credit cards that don’t charge fees. Many credit unions offer rewards cards that have no fees and have very competitive rewards. You just need to shop around.

  20. UniTonsil says:

    Hmmm…I actually have had the Starwood American Express card for many years and have never paid an annual fee. Maybe I opened the account during a promotional period where it there was no annual fee? So far, I’ve found the points to be extremely easy to redeem. The 1000 points for 50% off has been great for me. I only travel for leisure and have flexible travel dates, so the blackout dates don’t hinder my points redemption much.

  21. slappysquirrel says:

    My husband used to travel a lot for business and the Starwood card was REALLY worth it then. Now that he doesn’t travel as much the payoff is less, but Amex did come in really handy when we had an accident in a rental car we’d rented on their card, so we’re remaining faithful.

  22. careycat says:

    This is one of my favorite cards. I have no issue w/the annual fee, I’ve managed to get many rewards plus if you stay at starwood hotels as much as you can, it gives you extra “clout”.

    American Express actually intervened during an issue I had at a Starwood Hotel. They were phenomenal.

  23. JMILLER says:

    It is obvious rewards cards cause greater spending. That is the whole purpose of a reward card. Credit cards and debit cards also make people spend more. Places accept credit and debit cards BECAUSE the statistics show those that use a card spend substantially higher than those that use cash. It is the basic sales pitch every cc processor used to get companies like McDonalds to accept them. I bet if you looked at cash sales versus credit card sales you would see a higher average with cards. The same could be said for rewards. The problem becomes when the rewards become so commoditized (airline miles) that all the business is doing, is keeping the program to avoid defection, not actually increase business. I also would say the airline model of rewarding people is stupid. Why reward based on miles, reward based on money spent. If I fly from Detroit to Pittsburgh it costs me more than Detroit to LA. Yet LA gives me a larger reward. Not a smart business model.

  24. dg says:

    Fees on credit cards is the ultimate BOHICA trick. A total scam. The credit card company makes money on EVERY transaction you use the card for – Amex makes more because, unlike Visa or MC, they don’t share the transaction with a bank.

    And then if you’re stupid enough to carry a balance, you pay interest at a jacked up rate as well – making them MORE money.

    So why, oh why, would you want to pay for carrying a card? Tell them “No thanks”, and move to a no annual fee card.

  25. duffbeer703 says:

    Annual fee AMEX cards are usually a great value if you fit the demographic. If you’re the type of person who frequents Westin hotels and the W enough that a loyalty program makes sense, the $20 doesn’t matter.

    Ditto for the AMEX Platinum, which costs like $500, but gives you access to airport lounges that are invaluable if you’re stuck in airports frequently.

    If you’re paying for some cheesy “get credit now” credit cards with a $500 limit, that’s a ripoff, on the other hand.

  26. duffbeer703 says:

    Annual fee AMEX cards are usually a great value if you fit the demographic. If you’re the type of person who frequents Westin hotels and the W enough that a loyalty program makes sense, the $20 doesn’t matter.

    Ditto for the AMEX Platinum, which costs like $500, but gives you access to airport lounges that are invaluable if you’re stuck in airports frequently.

    If you’re paying for some cheesy “get credit now” credit cards with a $500 limit, that’s a ripoff, on the other hand.

  27. Captain Packrat says:

    The best credit card rewards program has to be the American Express Costco TrueEarnings card. 3% back on gasoline purchases (4% if you have a business account), 3% back on restaurants, 2% back on travel and 1% back on everything else. And there’s no annual fee as long as you’re a Costco member.