Should you invest in Starpoints now?

12

Starwood is once again offering 35% off on the purchase of SPG Starpoints through July 20th. This means that it’s possible to buy Starpoints for 2.275 cents each.  And, since Starpoints convert to Marriott Rewards points 1 to 3, that’s equivalent to buying Marriott Rewards points for 0.75 cents each.  Considering that Marriott sells points for 1.25 cents each, this is a relative bargain.

But…

The fact that Starpoints / Marriott Rewards points are available for purchase at a very low relative price does not mean that it makes sense to buy them.  Whether or not buying points makes sense depends entirely upon how you plan to use them.

Let’s look at various uses for Starpoints & Marriott Rewards points to see whether this is really a good deal…

Domestic Round Trip for $455

Many airline programs charge 25,000 miles for a domestic round-trip economy award.  Given that Starpoints transfer to airline miles at a rate of 20K Starpoints to 25K miles, we can estimate the cost to buy a round trip ticket as follows:

  • Buy 20K Starpoints for $455
  • Convert 20K Starpoints to 25K miles
  • Result: Round trip economy ticket for $455

Verdict: Bad Deal

Why: Round trip domestic economy awards are usually available for 25K miles only when the flight is far from full.  When that’s true, it is usually possible to get a good cash price for the same flights.  Last minute flights can be an exception.

Top Tier SPG or Ritz hotel for $455

Mystique, a Luxury Collection Hotel, Santorini

In August, Starpoints will automatically be converted 1 to 3 to rewards points.  And, from August to early 2019, the newly combined Marriott / SPG / Ritz award chart will top out at 60,000 points per night.  This means that during that window it will be possible to book the most expensive SPG and Ritz properties for the equivalent of 20,000 Starpoints per night.  Via this promotion, each free night will cost you $455.  Or, if you take advantage of 5th night free awards, you can average $364 per night for a 5 night stay.

  • Buy 20K Starpoints for $455
  • In August, 20K Starpoints automatically convert to 60K rewards points
  • Between August and early 2019, book top tier hotels for 60K rewards points per night
  • If you have enough points, take advantage of 5th night free awards

Verdict: Bad Deal*

Why: Many top tier properties are routinely available for under $500 per night, especially if you watch for sales.  If you buy Starpoints now with the hope of booking a top tier property that is usually much more than $500, this can offer very good savings, but it still locks you into having to finalize your travel plans before early 2019.

* This would be a good deal if you have specific plans to stay at a hotel that costs much more than $455 per night and if standard rooms are available during your travel dates.

Mid Tier Hotel for $273 per night

Residence Inn New York Central Park

When Marriott unveiled future award pricing for New York City and a few other markets, we were surprised to see that a number of New York City hotels will be available for only 35,000 rewards points per night.  That’s equivalent to 11,667 Starpoints per night.  With the current promotion, you could buy 12,000 Starpoints for $273 and have a few points left over.

  • Buy 12K Starpoints for $273
  • In August, 12K Starpoints automatically convert to 36K rewards points
  • When programs merge in August, book mid tier hotels for 35K rewards points per night
  • If you have enough points, take advantage of 5th night free awards

Verdict: Bad Deal*

Why: Many mid tier properties are routinely available for under $300 per night, especially if you watch for sales.  If you buy Starpoints now with the hope of booking a mid tier property that is usually much more than $300, this can offer very good savings, but only if you don’t come across a better sale before your stay.

* This would be a good deal if you have specific plans to stay at a hotel that costs much more than $273 per night and if standard rooms are available during your travel dates.

Bottom Tier Hotel, 5 Nights for $227.50 ($45.50 per night)

TownePlace Suites Jacksonville NC. Currently a category 1 Marriott hotel

Currently, category 1 and 2 SPG hotels do not qualify for 5th Night Free awards.  But, when the Marriott and SPG programs merge in August, all hotels will be eligible for 5th Night Free awards.  And the lowest category hotels will be available for 7,500 points per night:

If you book 5 nights under the new award chart, you’ll pay 7,500 x 4 = 30,000 rewards points (10,000 Starpoints) for 5 nights.

  • Buy 10K Starpoints for $227.50
  • 10K Starpoints convert to 30K rewards points
  • Book 5 nights at a category 1 hotel for 30K points
    • Before August, this is only possible at category 1 Marriott hotels.
    • When the programs merge in August, this will be possible at category 1 SPG hotels as well
  • Average cost per night: $45.50

Verdict: Good Deal

Why: If you have a real need or desire to stay in a category 1 hotel for 5 nights, chances are good that the paid rate alternative will be quite a bit higher than $45.50 per night after taxes and fees.  Alternatively, for those chasing elite status, this is a fairly low cost way to earn 5 elite nights.

One-Way International First Class for $1,365

Cathay Pacific first class

SPG offers point transfers to airline miles at a rate of 20K Starpoints to 25K miles.  If you buy enough Starpoints, you could use the resulting miles to buy first class flights:

  • Buy 60K Starpoints for $682.50 x 2 = $1,365 (See: How to buy more than 30K SPG points)
  • Convert 60K Starpoints to 75K airline miles
  • Many international first class awards are available for 75K miles one-way or less (see this post for examples)
  • Result: One-Way International First Class for $1,365 plus taxes & fees.

Verdict: Good Deal*

Why: A good international First Class flight often costs $8,000 or more round-trip.  Using points in this way would likely represent significant savings, even after accounting for fuel surcharges imposed by many carriers.  Caveat: Finding available first class awards when and where you want them can be tough.

* Even though this is a good deal, investing in travel packages can be a better deal.  See the section two below on round trip flights plus 7 night stays for details.

One-Way International Business Class for $1,365 (with points left over)

ANA Business Class
  • Buy 60K Starpoints for $682.50 x 2 = $1,365 (See: How to buy more than 30K SPG points)
  • Convert 60K Starpoints to 75K airline miles
  • Many international business class awards are available for 60K miles one-way or less (see this post for examples)
  • Result: One-Way International Business Class for $1,365 plus taxes & fees, with points left over for other uses

Verdict: Bad Deal

Why: It is often possible to find round-trip international business class fares for less than $3,000 (i.e. less than $1,500 each way).

Round Trip International Biz or 1st Class, plus 7 Night Hotel Stay for $2,047.50

Qantas Business Class

Marriott Travel Packages offer an intriguing alternative to using Starpoints directly:

  • Buy 90K Starpoints for $682.50 x 3 = $2,047.50 (See: How to buy more than 30K SPG points)
  • Convert 90K Starpoints to 270K Marriott Rewards points
  • Use 270K Marriott Rewards points to book a 7 night category 1-5 travel package resulting in 120K airline miles of various sorts, or 132K United miles plus a 7 night stay certificate.
  • Many round-trip international business class awards, and some round-trip international first class awards, are available for 120K miles or less. See this post for examples.
  • Result: Round-Trip premium international flight plus 7 night hotel stay for $2,047.50 plus taxes and fees.

Verdict: Great Deal

Why: While it’s possible to find similarly priced premium flights, this option gives you the option of flying some of the most luxurious premium cabins in the world.  For example, with Virgin Atlantic miles you could book ANA first class from the US to Tokyo for 110K or 120K miles.  Or, use Alaska miles to book Qantas or Fiji business class to Australia for 110K miles or Cathay Pacific for 120K miles.  Or, use Alaska miles to fly business class to Asia for 100K round-trip on Cathay Pacific or Hainan, or 120K round-trip on JAL.  United charges 140K round-trip (8K more than the miles you would get from the package) for partner business class to Europe, and less for their own flights.  And, significantly, United does not pass along fuel surcharges.  Caveat: Finding available business or first class awards when and where you want them can be tough.

If you need the miles, this deal is good even if you don’t have use for the 7 night stay certificate.  If you can find good use for the 7 night stay, then obviously the deal becomes way better.  For more about Marriott travel packages, see these posts:

Caveats to all of the above

#1: Whether or not something is a good or bad deal depends on your circumstances

I tried my best to indicate above whether or not I think each option is a good or bad deal, but your circumstances are undoubtedly different from those that I imagined.  Please use your own judgment to decide.

#2: Investing in points or miles is never a good idea without a plan for how to use them

Some of the flight options I described above sound amazing and are undoubtedly a great deal if you actually take advantage of them.  In reality, though, maybe you won’t.  If you’re thinking that you might try one of these award flights someday, but you don’t know when someday might be, I’d recommend against buying the points.  Chances are good that the miles will devalue before you go, or you might have other better options when the time comes.

#3 There are cheaper ways to get the needed points and miles

Buying points and miles at a discount is probably best for those who live outside of the US or for those who are unable to qualify for good credit card signup offers in the US.  For those in the US with good credit, a few credit card welcome bonuses could easily get you all of the points you need.

For example, here are the currently available Marriott point offers (click on any card link to go to a detailed Frequent Miler page about that card):

And here are the top transferable points offers (press Next for more). Click on any card link to go to a detailed Frequent Miler page about that card:

Card Offer
Chase Freedom
Chase Freedom Unlimited
$200 Cash Back + 5% back at groceries stores
Get 20,000 UR points (worth $200 cash back) after spending $500 in the first 3 months + 5x Ultimate Rewards points (worth 5% cash back) on grocery purchases for 1st year (on up to $12K in purchases, excludes Target & Walmart)

No Annual Fee

Citi Rewards+ Card
15K points
15K points after $1K spend in 3 months

No Annual Fee

Citi Rewards+ Student Card
2.5K points
2.5K after $500 spend in 3 months

No Annual Fee

Citi Double Cash Card

Recent better offer: None

And here are the top airline miles offers. Click on any card link to go to a detailed Frequent Miler page about that card:

Card Offer
AAdvantage® AviatorTM Business MasterCard®
Up to 75K miles
Up to 75K miles: 65k miles after $1K in purchases within 90 days and 10K miles when a purchase is made on an employee card that is added to the account at the time of application or within 30 days of the account open date

$95 Annual Fee

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Recent better offer: Up to 75K miles: 65k miles after $1K in purchases within 90 days and 10K miles when a purchase is made on an employee card that is added to the account at the time of application or within 30 days of the account open date

Chase Southwest Airlines Rapid Rewards® Plus Card
65K points
65K points after $2K spend in the first 3 months

$69 Annual Fee

This card is known to be subject to Chase's 5/24 rule.

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Recent better offer: Up to 75K points: 40K points after $1K spend in the first 3 months plus 35K after $5K spend in 6 months [Expired 2/10/20]

CitiBusiness AAdvantage Platinum Select World MasterCard
65K miles
65K after $4K spend in first 4 months

No Annual Fee First Year, Then $99

Recent better offer: 75K after $5K in the first 5 months (Expired 1/16/20)

Chase United Explorer Card
60K Miles
60K miles after $3K spend in first 3 months
(Offer Expires 9/30/2020)

No Annual Fee First Year, Then $95

AAdvantage Aviator Red World Elite MasterCard
60K miles
60k miles after 1st purchase within 90 days and payment of the $99 AF

$99 Annual Fee

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Alternate offer: There is an in-flight offer for 60K after first purchase with the 1st year fee waived. See this link; code 999999 may work for the promo code.

Recent better offer: None. This is the best we've seen.

Chase Iberia Visa Signature® Card
Up to 100K bonus Avios
Get 50K Avios after $3K spend in first 3 months + 50K more Avios after $20K spend in first year

$95 Annual Fee

Chase Aer Lingus Visa Signature® Card
Up to 100K bonus Avios
Get 50K Avios after $3K spend in first 3 months + 50K more Avios after $20K spend in first year

$95 Annual Fee

Chase British Airways Visa Signature® Card
Up to 100K bonus Avios
Get 50K Avios after $3K spend in first 3 months + 50K more Avios after $20K spend in first year

$95 Annual Fee

Citi AAdvantage Platinum Select World Elite Mastercard
50K miles
50K miles after $2,500 spend in the first 3 months

No Annual Fee First Year, Then $99

JetBlue Business Card
Up to 60K miles
Up to 60K: 50K after $1K spend in 90 days and earn 10K after a purchase is made on an employee card. Note that this offer may only show up on the mobile version of the site.

$99 Annual Fee

Lufthansa Miles & More® Premier World MasterCard® issued by Barclays
Up to 75K miles
Up to 75K miles: 50K after $3K spend in 90 days + 25K miles after $20K spend in first year

$89 Annual Fee

BOA Alaska Airlines Visa Signature
40K + $100
40K + $100 Statement Credit + $99 (+ taxes/fees) companion fare after $2K spend in 3 month

$75 Annual Fee

Virgin Atlantic World Elite Mastercard
Up to 35K miles
30K after $1K spend in first 90 days + 5K for adding 2 authorized users

$90 Annual Fee

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Recent better offer: 75K: 20K after first purchase + 50K after $12K in 6 months + 5K for adding 2 authorized users

The Hawaiian Airlines® Business MasterCard® issued by Barclays
Up to 60K miles
50K after $1K in the first 90 days + 10K after a purchase is made on an employee card

$99 Annual Fee

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Recent better offer: 60K after $1K in the first 90 days + 10K after first purchase on an employee card [Expired 8/19]

The Hawaiian Airlines® World Elite MasterCard® issued by Barclays
60K miles
6after $2K spend in 90 days

$99 Annual Fee

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Alternate offer: You may be able to get 60K miles after 1st purchase via paper application distributed in-flight.

Recent better offer: 50K after $2K spend in 90 days + 25K after $6K total in first 12 months

Korean Air SKYPASS Visa issued by US Bank
30K miles
30K miles after $3K spend in 90 days

$95 Annual Fee

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Recent better offer: 40K after $2.5K spend targeted (last reported 2/26/2016)

30K: 15K after first purchase + 15K after $2k spend in 90 days

25K: 15K after first purchase, 10K after $2K spend in first 3 months (expired 1/18)

American Airlines AAdvantage MileUp Card
10K miles + $50
Earn 10K AA miles + $50 statement credit after $500 spend in 3 months

No Annual Fee

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