Should you care about the 30,000 Starpoint signup bonus?

 It's no surprise that the travel-hacking blogosphere has lit up this week with links to the Starwood American Express personal and business cards, which through September 3, 2013 offer 10,000 Starpoints after first purchase and 20,000 additional Starpoints after spending $5,000 within 6 months. The card usually has a signup bonus of 25,000 Starpoints, so this is a 20% increase over the standard signup bonus.

I've never had a Starwood American Express, so I'm eligible for both signup bonuses, but I'll probably take a pass this year (the increased signup bonus is typically offered once a year). Since this promotion is getting so much play on other blogs, this is a good time to breakdown who this card might be right for. For more detail on all the information below, check out all the Starwood redemption options I explain here.

Hotel Stays

There's no question that Starwood, along with Hyatt and Club Carlson, has devalued their award chart least among the major chains, although the changes to Cash & Points rates did not win them any new fans.

Category 4 properties can cost many hundreds of dollars per night, but cost just 10,000 Starpoints, which could make this signup bonus worth well over $1,000 if used solely for Starwood reservations you were going to make anyway.

Elite Status

Indeed, if you regularly book paid stays with your own money at Starwood properties, then this card is a no brainer, because you probably value elite status highly. Starwood is exceptional among major hotel programs for awarding elite stay and night credit for award stays, so with the 35,000 Starpoints you'll have after meeting the minimum spending requirement, you could make 8 one-night reservations at Category 1 or Category 2 hotels. Those 8 stays, plus the 2 elite stay and 5 elite night credits you are credited with just for having the card, would already get you to Gold elite status (10 stays or 25 nights).

If you direct a majority of your paid stays towards Starwood properties, then elite status could make these cards worth carrying, thanks to the 50% earning bonus elites earn: 3 Starpoints per dollar spent on paid stays, instead of 2 Starpoints per dollar. Plus you'll earn 2 Starpoints per dollar spent on the card at Starwood properties, bringing your haul to around 5 Starpoints per dollar (slightly less, since you won't earn base Starpoints on taxes charged by the hotel), plus any promotions.

Airline Transfers

Like flexible Chase Ultimate Rewards and American Express Membership Rewards points, Starpoints can be transferred to many airlines at a 1 : 1 ratio, with a 5,000 Starpoint bonus at the 20,000, 40,000, and 60,000 Starpoint levels. This naturally creates the temptation to use this card to manufacture spend in order to secure award tickets. Even better, the Starwood American Express has an annual fee of just $65, compared to the $95 annual fee of Chase's flexible Ultimate Rewards cards, or $175 annual fee of the flexible American Express Membership Rewards cards.

You can find Starwood's airline transfer partners here.  The most important programs to note are Alaska MileagePlan, American AAdvantage, Delta Skymiles, and US Airways Dividend Miles. That gives you coverage in all four major alliances and partnerships, at least until US Airways leaves the Star Alliance for oneworld.

Flight Redemptions

Many Starwood loyalists prefer to transfer their Starpoints to frequent flyer programs to redeem for premium cabin tickets. However, Starpoints do have value beyond Starwood stays and airline transfers, so I always try to mention Starwood Flight Redemptions awards, which allow you to redeem Starpoints for paid airline tickets. 35,000 Starpoints can translate into one paid ticket costing up to $215 (15,000 Starpoints) and another ticket up to $280 (20,000 Starpoints), making this signup bonus worth up to $495 in paid tickets, plus the value of the frequent flyer miles you'll earn for those flights.

That's why even if you don't ever intend to stay at a Starwood hotel or book a premium international flight using frequent flyer miles, you may still want to consider this card since the points are between $315 and $495 in paid airfare. 

Drawbacks and Alternatives

Unfortunately, there's a drawback to this card: the Starwood American Express doesn't have any category bonuses except Starwood hotels, which would also be bonused by the Chase Sapphire Preferred (travel bonus) and Chase Ink (hotel bonus) cards. That makes it difficult to justify abandoning a flexible Chase card in favor of a Starwood American Express purely for the sake of manufacturing spend, since the bonus categories of those Chase cards (especially when combined with a Chase Freedom) can be so much more lucrative.

For example, if you have access to PayPal Cash or Vanilla Reload Network cards at a 7-11 that is coded as a "gas station," a Chase Ink card would allow you to purchase Ultimate Rewards points at a cost of 0.39 cents each, compared to 0.78 cents each with the Starwood American Express. That difference means you can pay for the $30 difference in annual fees after just $3,000 in manufactured gas station spending annually.

I consider Alaska MileagePlan miles to be wildly lucrative, since they can be used for Delta or American award tickets (among many other partners). But if you're interested primarily in earning Alaska miles, you can do so with the Bank of America Alaska Airlines Visa Signature credit card (with its annual companion ticket) or with a Bank of America debit card which gives you virtually unlimited free miles earning potential.

Conclusion

Of the three flexible awards currencies, Starpoints are probably the most valuable – each – because of the redemption options outlined above. However, that doesn't mean that the Starwood American Express is the most valuable credit credit to manufacture spend on: depending on your spend pattern, that distinction probably belongs to the Chase Sapphire Preferred or Ink Bold/Plus. Still, "second most valuable" is a strong endorsement, and this is the right card for a lot of people, especially with the current, higher signup bonus.

Right now I'm happily manufacturing spend at 5% cash back with the now-expired Citi ThankYou Preferred offer; 2.22% cash back with the Barclaycard Arrival World MasterCard, during my first, fee-free year; up to 4% cash back with my US Bank Flexperks Travel card; and 1.4 Skymiles and 0.4 Medallion Qualification Miles per dollar with the Delta Platinum Business American Express card. And frankly, that's about all I can fit into my current schedule. In January and April, respectively, I'll lose the first two opportunities and move that manufactured spending onto other cards. At that point I'll definitely consider making the Starwood American Express one of my workhorse cards for manufactured spend.