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.
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.