Choosing a travel rewards program

| July 3, 2009 | 9 Comments

beachpiggybank Choosing a travel rewards program

Choosing a travel rewards program...

Update (March 31, 2010) — It’s here—and according to American Express—more rewarding than ever! The new SPG Credit Card from American Express is now in Canada. Along with a number of travel benefits, the SPG Credit Card from American Express provides you with the only way to earn Starpoints on a credit card in Canada. Check out our post on the new card here.

Update (December 17, 2009) — The Starwood Preferred Guest (SPG) program and American Express have just announced a new credit card for Canadian residents: the Starwood Preferred Guest Credit Card from American Express. The new card will launch in the first few months of 2010 and will provide new benefits, including an accelerated points-earning feature. Check out our post here.

Update (September 2, 2009) — As of August 31, 2009 SPG will no longer offer the SPG MasterCard from MBNA in Canada. SPG is creating an ‘exciting new credit card’ that will be announced soon on spg.com—and it will be available to those in Canada. Check out our post on the announcment here.


Tim (from Tim’s Adventures) is the only other travelblogger that I’ve come across who obsesses over the best route to developing a rewards program strategyas much as I do! He’s spent countless hours pondering this exact question!

According to Tim, the first thing one should do before considering applying for a rewards card is to determine what your goals are for the rewards you are trying to earn. For Kathryn and I, this determination was a foregone conclusion. We wanted to find a program that provided the highest redemption rate—one which we could use to help defray the cost of our upcoming round-the-world trip.

However, with the huge number of rewards programs out there, it’s hard not to second-guess your choice. The fact of the matter is that some rewards programs are better—some much better—than others. Luckily, travel programs tend to offer the richest returns, but again, only if you choose the card that fits your spending habits and use it to your advantage. If you’re an infrequent traveller than another type of program might be a better fit.

So which card did we choose? The MBNA Starwood Preferred Guest (SPG) Mastercard. It fit our spending profile perfectly. We travel frequently enough to rack up points and are always certain to pay our balance off in full each month. What’s more, the card boasts no annual fee!

mbnaspg Choosing a travel rewards program

Starwood runs the Sheraton, W and Westin chains, among others, but its array of branded credit cards give you a lot more in the way of options for redeeming points than just hotel stays.

This card’s flexibility, plus a very good redemption rate, was a determining factor which influenced our decision. What pushed us over the top, however, was the fact that you can transfer your earned ‘Starpoints’ into most airlines’ frequent flyer programs at pretty favourable exchange rates. That means you can be airline agnostic, more or less! Furthermore, it means you are not pushed to the back of the line, forced to fly standby or stuck with routes that only pass through Gary, Indiana.

So how many points do you get for using the SPG credit card?

  • You get 1 point for every C$2.00 spent
  • 5000 bonus points upon first purchase
  • 5000 bonus points for your first stay (that you pay for)
  • 5000 bonus points for every C$10,000 that you spend for up to 15,000 bonus points (C$30k spent).

You earn one ‘Starpoint’ for each C$2.00 spent (and you get 5,000 points upon first purchase), earning bonuses at for every C$10,000 spent. Essentially, you earn ‘Starpoint’s at a ratio of 1:1 for every dollar spent—up to C$30,000.  These are better earn rates than most other cards.

If you choose to redeem your ‘Starpoints’ for Starwood hotel rooms—of which there are literally thousandsa cross the globe—the redemption rate typically translates into C$0.03–0.05 cents per point—an excellent exchange rate unmatched by any rewards program.

FrugralTrader at Million Dollar Journey figures that the card, at best, can offer a 4.8% return on the money that you spend. Pretty significant—especially if you spend more than C$30,000/year on the card. Over three years, we might be looking at a points balance of 100,000 or ~C$4,500.

Anne Andrus from Six in the World put it thusly:

We stayed for free or at discounted rates at Starwood Hotels using frequent guest points for a total of 45 nights. In some locations this saved us a bundle, in others just a little. In any event, our budget for lodging, which we rarely exceeded was $100/night.

One of the nicest things about redeeming  ’Starpoints’ for accomodation, is that the program encourages you to redeem free nights using a combination of cash and points. Hence, cash and points awards are always a better deal than the comparable points-only redemptions.

Thus, according to some back-of-the-envelope calculations, ~12% of our accomodations budget would be composed of Starwood properties, provided that we are able to maintain our current earnings rate. Looks like the Starwood Preferred Guest program is helping to transform us from backpackers to flashpackers! It’s likely to win me some bonus points, too—as Kathryn isn’t too fond of the cheaper hostel alternatives (refer to her recent blog post enititled ‘The Lumpiest Mattress in Penang‘).

So, is this card right for you? Perhaps. As long as you evaluate your needs and how you actually use the credit cards already at your disposal. Chasing ‘Starpoints’ esentially requires that you pay your balance in full each month; otherwise, you’re going to run up against some pretty high interest rates. Hence, carrying a balance will incurs interest charges that offsets any point value!

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About the Author ()

For nearly ten years now, Daniel of Two Go Round-The-World has explored how travel captures our imagination and engages our deepest emotions. One half of the duo that maintains the widely read Two Go Round-The-World blog, Daniel treats his subjects not only as works of art but also as symbols of the cultural and political forces that inspire them. Check him out on Google+.

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Sites That Link to this Post

  1. Travel Credit Cards | THINKchua | July 22, 2009
  2. The Value of Starwoods SPG points Part 1 | Tim's Adventures | July 24, 2009
  1. Tim Morrison says:


    Hey Dan,
    Great article and thanks for linking to one my posts. The Starwoods US credit card is the one I use as my personal rewards card.

    • Daniel says:


      Hey Tim—no, thank you. You’ve got a triumvirate of pretty cool articles on credit cards and reward programs. I happened across them as I was doing a little online research for the article above. I think that you mentioned in your piece that its the Starwood Preferred Guest Credit Card from American Express. In my opeinion, it’s superior to the MBNA card mentioned above, albeit only available to US residents, with only one drawback—it’s an American Express, which isn’t quite as widely available as a MasterCard or Visa. Anyway, thanks for posting. Have subscribed to your updates via RSS, too!

  2. Dave and Deb says:


    Hey guy, great post. Does your card have a yearly fee? One of my petpeeves is paying a CC company any yearly fee. I still love my aeroplan You are definitely doing a great job researching before you leave, making me think about what we should be checking out. Thanks

    • Daniel says:


      There’s a couple of great advantages to this card. First, I hate to pay—and absolutely refuse to pay—an annual fee. So no worries there! There is absolutely no annual fee. That’s what makes the ‘earn rate’ so good. Secondly MBNA’s online access is pretty darn good, making remote management of your account fairly easy.

    • Leatrice says:


      Dag nabbit good stuff you whppiresanppers!

  3. Chua says:


    I will (somewhat) kindly disagree with your findings. I don’t know the options in Canada, but for an American I do not recommend this card for travelers. I have spoken to Tim on this and still don’t see the SPG card the same way you both do. I started writing my reasons in the comment box, but it didn’t fit so I had to post it at http://www.thinkchua.com

  4. Neil says:


    I find that in most of the world, $50 per night can get me a very nice room at a nice hotel, guesthouse, B&B, or whatever. And I’ve never found the fancy hotel atmosphere to be something I enjoy.

    Saying that you get 4.8% back is only relevant if you would have spent the money to stay at a Starwood or similarly priced property. If you would have stayed a nice local place for half (or less) or the cost, your actual reward value accordingly divided in 1/2 (or less).

    I usually go for plane tickets. One free plane ticket is worth 20 nights or more of free accommodation (and I find most years I can earn at least one free ticket, if not two).

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