My Thoughts on the SPG Cash and Points Devaluation and AMEX Hilton Devaluation

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American Express is not doing too hot right now.  First they laid off 5,400 people, then they announced the SPG cash and points devaluation and the removal of 6X drugstores category bonus on the American Express Hilton and Hilton Surpass credit cards as the View from the Wing discusses here.

SPG Cash and Points Devaluation

Many bloggers such as ThePointsGuy and MommyPoints state that the change is not too bad.  I disagree, the change to the program devalues the SPG cash and points rewards.  These two SPG cash and points rewards were my favorite and the best value for my points because I don’t need to stay in a very fancy hotel and I like to save my SPG points for transfers to airlines.

New SPG Cash and Points Chart

New SPG Cash and Points Chart

Category 4 (my favorite C&P Redemption)
Old: 4,000 Starpoints + $60
New: 5,000 Starpoints + $75

Category 5 (my favorite C&P Redemption)
Old: 4,800 Starpoints + $90
New: 6,000 Starpoints + $110

Since I value SPG points at 2 cents each conservatively, a Category 4 hotel has gone up by (1,000 SPG @ 2 cents + $15) $35 and a Category 5 has gone up by $44 (1,200 SPG @ 2 cents + $20).  It’s getting too expensive for me and I don’t like wasting SPG points so easily.

Both of these bloggers are well known and provide great information, but they are compensated by American Express so I don’t believe they give an unbiased opinion.  They state that more properties will have more cash and points availability because rates become more expensive.  This may be true because people may be turned off by the increased rates and instead book the free night points rate.  Don’t forget that the cash outlay portion is taxed so it becomes even more expensive.

AMEX Hilton Devaluation

Secondly, Hilton AMEX is doing away with the 6X points on drugstores.  This is a huge blow to people who are collecting Hilton points from buying Vanilla Reload cards at CVS.  Through this method, you can buy Hilton points very only $0.0013 cents per point.

  • Vanilla Reload: $503.95
  • Points Earned: 3,024
  • Cost: $0.0013 cents per point ($3.95/3,024 points)
  • Cost for a top tier Hilton property @ 50,000 points = $65 (“Cost” * 5,000)
  • 4 Nights at top tier Hilton property using AXON rewards @ 145,000 points = $189.40

The best value for buying cheap Hilton points is definitely the AXON 4-night stay at a Category 7 hotel.  It would only cost $189 to stay 4 nights at almost any Hilton in the world, the Hilton Trafalgar in London or Conrad Hong Kong/Tokyo/Koh Samui/Singapore.  By the end of May, the bonus will be done with and people will have to find alternative methods to earning Hilton points other than credit card churning.  Get it while it lasts, but of course be smart about it.

While American Express is hurting, Chase is dominating the credit card field with its great credit cards and sign up bonuses.  With the exception of the 100K AMEX Platinum bonus(expired), American Express consistently has weaker signup offers than Chase.  Don’t get me wrong, American Express has great promotions such as Small Business Saturdays, different AMEX sync promotions and great purchase protection.  I still have the AMEX Business SPG card, AMEX Hilton card, and a Costco AMEX card.  I did cancel my AMEX Platinum after I received $600 in American Airline gift cards and cancel my personal AMEX SPG card because there is no point in having two AMEX SPG cards if you aren’t chasing Platinum status.  Also, keeping the AMEX Platinum is not worthwhile for me because I’ve only used the lounge access about 2-3 times a year and I already have SPG Gold status from staying at a few SPG hotels a year.

In a nutshell, be wary of point devaluations and spend those points.  The SPG Cash and Points devaluation and AMEX Hilton devaluations are a sign of things soon to come.  My suspicion is that the American Express AXON rewards will be devalued sometime in the future because they are great value.  Four nights at a top-tier hotel for 145,000 points is a great deal if you can buy cheap points at $0.0013 per point.  The points and miles game is constantly changing.  American Express is still a great company to deal with, but make sure you do your own research to decide if each credit card is for you.   Flyertalk is a great place to research because there are no credit card affiliate links that give biased opinions (I also am not compensated by Chase or AMEX).  It is good to get an unbiased opinion on credit cards if you are new to the points and miles game.

 

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17 comments for “My Thoughts on the SPG Cash and Points Devaluation and AMEX Hilton Devaluation

  1. Sean
    January 21, 2013 at 7:42 am

    Thank you for the unbiased post. You confirmed what I suspected about some of the other bloggers.

    • January 21, 2013 at 10:11 am

      Sure np. Spg is getting devalued but its still a good program.

  2. Drew
    January 21, 2013 at 7:47 am

    amex hilton will still work at grocery stores, where you can find reloads, of the non vanilla variety.

    • January 21, 2013 at 10:47 am

      That’s a good point. Haven’t had the time to check supermarkets.

  3. Brian
    January 21, 2013 at 8:05 am

    After the Amex Hilton drops the drug store bonus category, do you have any recommendation of which card to use at drug stores? Chase Freedom and Citi Dividend currently have drugstores as a bonus category, but I’m not aware of any other cards which offer a good replacement for the Amex Hilton in this aspect. Thanks.

    • January 21, 2013 at 10:51 am

      Amex blue has 6x cash back but 75 annual fee. The citi card 5X is a good choice too. I would focus more on chase ink 5X.

      • David
        January 21, 2013 at 12:15 pm

        Is there an Ink card with 5X at drugstores?

        • January 21, 2013 at 12:54 pm

          No. You would buy visa gift cards at office store first.

        • May 1, 2014 at 5:15 am

          Nice answer back in return of this query with firm arguments
          and explaining the whole thing about that.

  4. Robert Hanson
    January 21, 2013 at 9:56 am

    I doubt that bloggers like MP are directly influenced by AMEX compensation. But in the back of their minds, there has to be a concern that if you make a cc seem like it’s no longer a good value, fewer people will apply thru your link, and that’s going to mean less income. And every blogger, with links or not, needs the points and miles game to still seem worth playing to keep their reader’s interest.

    On the other hand, I remember when I first became aware of travel blogs a few years back, I was dismayed to find out the “best deals”, ie coins from the Mint, churning Citi AA cards every 3 months, etc had just ended. I had missed out ! Yet I still found many ways to amass huge amounts of miles and points, and continue to do so. :D

    So yes it’s sad when a great deal gets devalued, but you just need to look around for what’s still working, and remember that new deals come along all the time. And to keep up with it all, we need great blogs like this one, so thanks for keeping us informed.

    • January 21, 2013 at 12:52 pm

      Sure no problem. I also work full time so sometimes I can’t keep up. Just want to make it a point to spend your points!

  5. David
    January 21, 2013 at 12:25 pm

    I think this is a “wait and see” scenario b/c increased standard availability and C&P options for suites and upgraded rooms may make it an actual enhancement. But we’ll have to wait and see if there is increased availability, and if it is easily searchable online.

    Since losing my SPG Plat last year, it’s cut down my SPG redemptions options, since I’d rather use my Hilton Gold or Hyatt Diamond for elite benefits on award stays. I don’t think I’d make a Hilton AXON res without at least Gold status, and for SPG, it’s no different. I don’t see it as a “win” to just redeem for a standard room, as free breakfast, suite upgrades and lounge access has been what really makes a hotel stay memorable. (at least for me/our travel group)

    Also, this may make it possible to have 3 registered guests in a room on a SPG award, which is currently not possible without assistance from the property.

    • January 21, 2013 at 12:58 pm

      I agree we will have to wait and see. What we know for sure is that it definitely makes SPG Platinum status more expensive. Hyatt diamond definitely has a wow factor to it, hyatt diamond is just expensive to obtain unless you do a challenge or your work is paying for it.

  6. Mike h
    January 21, 2013 at 3:13 pm

    You mentioned that “They announced… Point devaluation”. Did amex ” announce” it, or is it just a blogger reporting a private comversation?

    • January 21, 2013 at 6:32 pm

      Of course they didn’t announce devaluation. They hide it by focusing on the plus side, which is more types if redemption and higher rates.

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