We take our credit cards seriously here at LevelUpHouse – we pay our balance in full each month and we love watching rewards pile up.

We were Chase Freedom customers for years. Those were good times: a nice, fat $250 cash back check arrived every so often and reinforced our love.  Then the nerf hammer fell and Chase began that revolving categories BS.

Oh, is it finally “gasoline season”? Great, because I’d been holding off on fueling my car…  

But we don’t take credit cards seriously enough to play “the game”. Lots of people like to get fancy with milking rewards from multiple different cards, but we keep it simpler: one card for “everything”, and another for backup.

Three years ago, we selected the Starwood Preferred Guest (SPG) American Express card because it kept coming out on top in our research for a new rewards credit card. It’s been three years, and we’ve put nearly $100k worth of purchases onto this card.

How’d it do?

Starwood Preferred Guest credit card from American Express Review

It sucks. There’s no sugar-coating it: the rewards are disappointing and limited. The rewards are the whole point of getting the SPG AmEx card. There is no other advantage unique to this card – all other perks can be found elsewhere.

After three years of commitment to this card it’s pretty disappointing to find that my 94,000 Starpoints aren’t good for anything I actually want to buy. It’s all awkwardly timed flights, expensive hotels, and gift cards to stores I don’t shop at.

So we’re giving SPG AmEx the big middle finger this month, and I wrote this review in honor of its eviction from my wallet. We’ll be switching to the Fidelity Investment Rewards card (read more about our new Fidelity card at the end of this review).

Here’s why we’re switching from the SPG AmEx to the Fidelity Investment Rewards AmEx:

Poor flight redemption options

SPG’s flight redemption options are a mixed bag. I’ve tried to use points to book trips a few times in the last three years, but the flights offered all sucked for some reason or another.  Poor departure times and stops in other cities are common.

I don’t travel often, but when I do, I don’t stop in LA on my way to Chicago.

At Starwood’s points:miles conversion rate, we can get 2 “free” round-trip flights every 3 years. Flying from Seattle to Chicago costs somewhere between 25,000 and 45,000 Starpoints (depending on which airline I select). Let’s say I fly Alaska Airlines, which is the cheapest non-stop available at 30,000 points. To fly me and my husband to Chicago on points alone would require 60k points – two-thirds of what we accumulated in three years.

That’s a lot of spending for one measly flight each.

Pricey luxury hotels = !savings

The hotels offered by SPG are by and large a huge disappointment. They’re expensive, they’re in cities, and they’re not where I would normally stay.

Maybe this one’s my fault: maybe I should have known that SPG only deals in high-end hotels? I was all excited to book some hotels using points on our West Coast Road Trip, but there weren’t any SPG hotels in the little towns we stopped in!

• “Fifth night free” doesn’t cut it with me. In eight years of traveling for vacations, the only time I’ve stayed at one hotel for more than one night was when I went to Disney (and there aren’t any Disney-owned properties in SPG’s hotel offerings).
• Using points to get 50% off the rack rate of a luxury hotel doesn’t save me money. It still costs more than staying at a budget hotel!

Gift card redemption options are lacking

Let’s say you decide to cash in your Starpoints for a gift card to a retailer. Not only do gift cards get the worst Starpoint to dollar conversion rate, the merchants available are almost exclusively high-end retailers. There isn’t much for high level frugalists like me in here – no Home Depot, Safeway, Target – so forget about using your rewards for everyday necessities.

Starpoints conversion rate:

• $25 card = 2800 Starpoints
• $50 card = 5000 Starpoints
• $100 card = 9500 Starpoints
• $150 card = 14,000 Starpoints

You can get a gift card to these retailers:

• Amazon
• Banana Republic
• Blisscertificates (I have no idea who this retailer is)
• Brookstone
• Chateau Ste. Michelle
• Conde Nast Publications
• GAP
• MPI (I couldn’t identify this retailer)
• Nordstrom
• PCMA (I couldn’t identify this retailer)
• Pottery Barn
• Starbucks
• Williams-Sonoma
• iTunes

SPG’s gift card options are almost exclusively high-end yuppie retailers. I don’t shop at these places. Going out of my way to shop at these retailers isn’t “saving money”, it’s spending money I wasn’t going to spend in the first place.

The only retailer on this list that I do shop at is Amazon.com, so that’s where my Starpoints went – into a pile of Amazon.com gift cards, at a poor conversion rate. That’s pretty disappointing.

The gift cards get left on your porch!

I cashed in a bunch of my StarPoints and waited a few weeks for them to arrive. Why can’t the SPG gift cards be awarded digitally?

The physical cards come in a slim FedEx envelope, which has to be signed for. Do most people with this card have a butler attending to deliveries? Because I don’t. I’m at work, earning the money I spend on this card.

So I signed the FedEx form and took the gamble of leaving the gift cards out on my porch all day because the alternative is driving 45 minutes out of my way to Issaquah during business hours to pick the cards up at the FedEx distribution point.

Hey, SPG – get with the times! I don’t want hundreds of dollars in gift cards sitting on my front porch, and I don’t want to drive 30 miles out of my way to pick them up, either!

Starpoints Are Just Really F***ing Confusing

Starpoints, miles system, etc are all built to confuse people. When money is abstracted into “points” and “miles”, people can’t rely their sense of what things are worth. Classic example: why does it take 25,000 miles to fly from Seattle to Chicago? That’s more than the distance around the EQUATOR!

The upsells to buy more points are everywhere. If the points I have are already borderline useless to me, why would I want to turn more perfectly good real money into more Starpoints “play money”!?

Good riddance, Starwood.

New “Everything” Card: Fidelity Investment Rewards

The Fidelity American Express rewards card will be our new card henceforth.

This card’s premise is simple: spend money as usual, and Fidelity gives you a whopping 2% cash back in the form of a deposit directly into your Fidelity investment account. You don’t even have to do anything once you’ve set your account up. If you spend 2,000 on your credit card, you’ll get $40.

I like getting money for doing nothing, don’t you?

Behold the Fidelity card’s badassery:

• No ever-changing categories (eat it, Chase Freedom)
• No confusing redemption options (take that, SPG AmEx)
• No annual fee (SWEET!)
• Cash back money goes into your investment account!! There it’ll sit just being awesome, earning more money for you without any effort on your part.
• You’re free to remove the cash, too, but I think anything that helps put money into savings and investment accounts is a good thing.

There’s a Visa version of the Fidelity Investment Rewards card, but it only offers 1.5% cash back. We’re going AmEx again and keeping our Chase Freedom as a backup for the one-off places that don’t take AmEx.

American Express also offers some built-in consumer protections, which we like but have never actually used:

1. Purchase Protection: If something you just bought gets broken or stolen, if you’re still within the 90 days of your purchase AmEx offers some protection. Coverage is limited up to $1,000 per occurrence, up to $50,000 per cardmember account per calendar year.
2. Extended Warranty: American Express extends the warranties on things bought with the card, up to a value of $10,000 (not to exceed $50,000 per cardmember account per calendar year). One great example: an iPhone comes with a 1-year warranty. Buying it on AmEx gets your phone covered for two years.
3. Car/Roadside Assistance: Book your U.S. car rental with American Express and the car is insured in event of accident. (Which is why we decline coverage at the rental car desk.)

So that’s our new credit card – the Fidelity Investment Rewards card. I’ll update later this year and let you know how it’s going.