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AMEX SPG credit card

Discussion in 'Vistana Signature Experiences (formerly Starwood)' started by slomac, May 1, 2012.

  1. jarta

    jarta TUG Member

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    michael, ... One last thing about credit cards and the concept of "buying."

    I consider that you buy SPs when you give Starwood money or something of demonstrable worth and you get back SPs. As I stated, you can have an effective cost if you trade your annual MFs paid at a place like Lagunamar of around 1.6 cents per SP.

    I think you should consider that there is a reason a lot of vendors don't accept American Express cards for a credit card transaction. That's because AmEx charges higher fees for the transaction than Visa or Mastercard. http://www.fivecentnickel.com/2009/07/03/credit-card-processing-fees/

    If AmEx (or anyone else) charges 3% on the transaction, it gets 3% off the top (without counting renewal fees, interest or late payment fees). In effect, you give AmEX 3% of the purchase price and you get SPs equal to a cost of 3 cents (not 1 cent) per dollar of transaction processed. (The actual numbers are a lot more complicated. Westin 5 Star can run you through it. He says he owns a processing company.)

    And, if you don't think the prices of the vendor for the goods and services are increased to cover the processing fees, you are sadly mistaken. The vendor does not eat the fee with a decreased profit margin. It's passed on to you through a higher price.

    There is no free lunch and, any way you look at it, you are paying something to Amex for those SPs. And, it's a lot more than 1 cent per SP. (Why would AmEx be so generous with the SPs if it was losing money by doing so?)

    http://truecostofcredit.com/372542 Salty
     
    Last edited: May 3, 2012
  2. sptung

    sptung TUG Member

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    I have several active Amex cards when I enrolled. I remember it was $15K within 6 months to get the next 15K bonus and I received the full 25K bonus when I hit $15K within 3 months. I wonder in Feb when you were enrolled if it was $15K or $5K as the way it is currently stated on the website. You may want to call them to check and chock up to $15K before 6 months is up.
     
  3. Ken555

    Ken555 Tug Review Crew: Rookie TUG Member

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    Keep in mind that many would consider the opportunity cost of the money used to purchase the mandatory week which is used in conversion of a week to StarPoints. It's not as simple as assuming the maintenance fee directly converts to StarPoints and is a specific, easy to determine, amount. It's actually quite higher, since Starwood has your money which you spent to purchase the deed. This is why converting is still a developer purchase (or requal) benefit, and not available to all. It's just not as simple as some would make you think. The StarPoints I acquire from AMEX are a direct benefit, and comparable to a cash back card or other direct replacement. I have not purchased a real property deed which use I am converting in lieu of use, such as is done with the conversion of a week to StarPoints.
     
    Last edited: May 4, 2012
  4. jarta

    jarta TUG Member

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    "It's not as simple as assuming the maintenance fee directly converts to StarPoints "

    But, it is just that simple. The maintenance fee directly converts to SPs. By paying the MF and complying with the rules, you have the right to use the week - or rent out the week to someone else to make money - or trade into WKORV from SDO using II and save money - or, if you are in the SVN, bank the StarOptions for use somewhere else - or, again if you are in the SVN, convert to SP.

    Why do renting for a profit and using II to trade receive unanimous approval on this forum as having value but converting is felt to have no value?

    I think it is because only SVN members have the ability to convert and the non-SVN members here are jealous of the great value over MF cost that can be obtained by conversion to SP. So, they pooh-pooh the benefits of converting to SP. After 4 years of demonstrating the value of converting to SP and nobody challenging the math, it's just sour grapes, IMO.

    Off to sunny SoCal this morning to use some converted SPs! Salty
     
  5. Ken555

    Ken555 Tug Review Crew: Rookie TUG Member

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    Nonsense. Of course, others will understand that you quoted out of context. My only point is that you don't even admit that there are other costs other than the MF when everyone else understands that you need to pay Starwood for the deed in order to convert to StarPoints, and that the expense for that deed should be accounted in some fashion. StarPoints acquired thru hotel stays or credit card usage have no similar up front expense, and therefore are as simple as they seem. Converting a timeshare to StarPoints should include some increase in cost of the points for the actual money spent for the deed, without which you wouldn't be able to convert in the first place. Of course, once you have the deed converting is a simple process...after all, Starwood wants you to buy more developer weeks (at huge profit for SVN).

    I wouldn't have replied at all had you only included that there are other associated (and required) expenses which need to be made in order to convert to StarPoints when you mention conversion. Your incomplete statements often discuss the benefit of the conversion without the required developer purchase, which can easily paint a partial picture of truth. I suggest you just be more complete with your summary in future so readers understand fully what is required in order to convert a week to StarPoints.

    And, note that I am not taking about the relative merits of converting the week to timeshare here, only that I believe your posts should be accurate in regards to what is needed, per Starwood, in order to make the conversion in the first place. Your only reference in this thread is:

    Even simply including 1/20th of the initial purchase of the week (or perhaps less, since you could argue it's actually less since you retroed a week with the purchase) would add value to your posts by being more complete and objective than they are now.
     
    Last edited: May 4, 2012
  6. mstoyanov

    mstoyanov TUG Member

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    I am sorry jarta but it is not that simple. It will be THAT simple if you could buy WLR for $1 and then only pay MFs to convert to SP but when you have to spend $20k on something that drops to almost $0 you can not ignore depreciation and opportunity cost associated with it. And whether you buy this WLR from developer to convert to points or to rent or to exchange it is the same. What makes it bad financial decision (at least for me) is not what you plan to do with WLR (convert to SP, rent, exchange) but the sunk cost of developer purchase.
    The opportunity cost of $20k loss is at minimum 3% each year (for me it is more than 5% since my investment return is >5%) and that loss is compounded each year. So by wasting $20k on EOY WLR I am also looking at minimum $600 opportunity cost ($1000 for me personally).
    So the true cost for me is more like $2200 for each use year and it is guaranteed to rise (due to MFs increase and compounding on opportunity cost) while the value of points will continue to drop.

    I can easily afford to go all the way to 5* but I will never do it since it doesn't make financial sense for me. And this has nothing to do with "envy" or "jealousy" but simply common sense. Of course everyone is free to spend his/her money the way he/she sees fit but when you try to justify this as a good financial decision then there is no way I am not going to criticize it on the actual financial grounds. Maybe there are other non-financial benefits for you that apply to your personal decisions but please don't try to sell it to me as making sense financially.

    As for people obtaining these points from credit cards - you have a point that cost of CC rewards is passed to consumers as higher prices but unfortunately many(most that I tried) big chain stores does not give you discounts for paying cash. I have tried it for example with Home Depot and Lowes for larger projects and they will not give me 3% discount for paying cash (which is funny because they had no problems giving me 10% for a coupon at the same time). So for us consumers it makes sense to go with credit cards that gets the best benefits and to base our valuation on these accrual rates.



     
    Last edited: May 4, 2012
  7. YYJMSP

    YYJMSP TUG Member

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    In my particular case, my cost per StarPoint is 2.2c just based on the 2012 MFs, or 4.1c if you include amortizing the up-front costs over 20yrs.

    Obviously, a huge difference -- it basically doubles the numbers being thrown around.

    I suspect other owners may have a slightly better ratio, as we have 5 developer + 3 requalified weeks, so we're a little high on the up-front cost.

    So, when they offer you the chance to purchase StarPoints at ~2c, it's a good deal in comparison to converting weeks.
     
  8. LisaRex

    LisaRex TUG Member

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    That (1/20) is the figure I use, too. I have to say that it does make me chuckle to see some posters bragging about their incredible ROI by only using the cost of MFs in their equation:

    Salesman: "You should buy this Lexus SUV because it's really cool, super convenient...and 25% more affordable than taking the bus."

    Customer: "MORE affordable? How's that?"

    Salesman: "It's easy. Just do the math and compare your daily costs. It costs $2, or $4 per day, to take the bus the 10 miles to and from work. For the same $4, you can buy one gallon of gas. This car gets 25 miles to the gallon. By driving, you're getting an ADDITIONAL 5 miles per dollar! That's 25% more!"

    Customer: "Wow. That sounds great. But I don't have to buy the bus. I have to buy the car, in order to take advantage of that great gas mileage. Right? I mean, you're not going to GIVE me the car, are you?"

    Salesman: "No, but once you write us the check for $50,000, or better yet -- put it on terms and finance it over 6 years -- you'll forget all about the upfront money. Out of sight; out of mind!"

    Customer: "Have you included the cost of repairs in your equation...?"

    Salesman: "Listen, the point is that it's not always about MONEY. Sometimes you have to think about your IMAGE. You're too good to ride the bus. This car is not just convenient; it's luxurious! Sooo much nicer than taking a bus. Look, it has leather seats, and personalized climate zones, not to mention really spiffy cup holders."

    Customer: "I do enjoy a good cup holder."

    Salesman: "And if you buy from us, we'll also enroll you in our Elite Club for no additional charge."

    Customer: "That sounds impressive. What is that all about?"

    Salemsan: "Well, for starters, whenever you stop by the dealership for oil changes, you can use this special, dedicated "elite" lane. Plus, all the attendants will start out the conversation by saying, "Welcome back, Mr. Elite Club member."

    Customer: "Finally, the respect I've yearned for, but have never gotten because I'm a cantankerous, ill-mannered contrarian!"

    Salesman: "As an Elite Club member, you'll also be entitled to 10% off our oil changes, which are only marked up 200% vs the ordinary garage down the street."

    Customer: "That's got to add up over the years."

    Salesman: "I know. I mean, with all these savings, we'll be writing you a check soon!"

    Customer: "Let me ask you this. I've seen this very same car advertised in my local paper for only $35,000. Same make, same model, same year.

    Salesman: "Yes, and while that may SEEM like a fantastic deal on paper, do you really want to spend your life driving around in a car that was in someone else's name first?"

    Customer: "Does it really matter? I mean, who would know?"

    Salesman: "The oil change people would know because there's a little crown icon next to your name if you're an Elite Club member."

    Customer: "Mmmm."

    Salesman: "Wait a minute. I haven't even begun to explain about our Elite Exchange program, where we ask you to give up your Lexus SUV for a week, in exchange for 3 days in a Mini Cooper."

    Customer: "It's going to take a lot of sugar to turn that sour lemon into lemonade."

    Salesman: "Well, let me just say..." (waggles his eyebrows) ...that the Mini Cooper is in Paris!"

    Customer: "I love Paris!"

    :cheer:
     
  9. pianodinosaur

    pianodinosaur Tug Review Crew: Rookie TUG Member

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    I have an SPG AmEx. It comes in very handy when I want to stay at a Starwood resort for a meeting. We do not own a Starwood TimeShare nor have we ever exchanged into one but that may change. I have had my card since 2004 and now have about 100,000 points. We are planning our first redemption next year.
     
  10. Ken555

    Ken555 Tug Review Crew: Rookie TUG Member

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    Nicely said
     
  11. DavidnRobin

    DavidnRobin TUG Member

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    Agree - and (LR) I really enjoyed reading the Lexus analogy.

    In addition with the SVO cost factor for ROI (as said) - it cost more to travel that just airfare and lodging - including having the available time-off (since time=$ for folks that work and have limited vacation). Plus, SP value depends on how may you already have or need to use (which depends on the ability to use them - versus other methods - like using FF miles, other hotel points, or cash).

    It is correct that SPs likely cannot be bought from SVO for less than 1.85cents/SP - this is why I do not buy them and pass on these great 'deals' - (especially the standard 10% discount off of 3.5c/SP) and accumulate them using the AMEX-SPG card instead (~300K now). An analysis done on SPG FT - put the value of 1.35c/SP for airlines with a 1:1 exchange under normal conditions, and I tend to agree with that.

    If I did have a need - I would considering purchasing SPs for <=2c/SP, but only if I could find usefulness in redeeming them (vs. other methods of obtaining flights or hotels - miles/cash/etc.). However - I [meaning... ME] only put a nominal use value of ~2.25 cents per SP, and if I get more value (which I often do)... then, gravy. My value of 2.25c/SP prevents the natural tendency of using fuzzy math to justify their worth - and also agrees with a low-end consensus use value from experienced SPG FT travelers.

    IMO - YMMV

    PS - pianodinosaur - careful not to let the SPs expire.
     
  12. jarta

    jarta TUG Member

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    pianodinosaur, ... Those who don't use SPs creatively pooh-pooh their value in use all the time. They are so clueless they don't even realize that SPs earned by hotel stays and credit card use (like yours) never expire. Don't be frightened by the naysayers who do not use and, therefore, do not know. Enjoy spending the SPs - any time you decide to. Salty
     
    Last edited: May 4, 2012
  13. MichaelColey

    MichaelColey TUG Review Crew: Expert TUG Member

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    A classic, Lisa! Love it!
     
  14. J&JFamily

    J&JFamily TUG Member

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    Excellent Summary

    Priceless!!! :D
     
  15. Lulubelle

    Lulubelle TUG Member

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    I just wanted to say that I love my Starwood Amex. I have accumulated many points over the years and used it for several Sheraton/Westin stays. Regardless of the analogies, it works for me. ;)
     
  16. DeniseM

    DeniseM Moderator

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    Hi Lulubelle - No one here will disagree with you about credit card points, but many of us feel that converting one's timeshare to points is a poor value.
     
  17. DeniseM

    DeniseM Moderator

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    Lisa - You are a hoot! :hysterical:

     
  18. ValleyGirl

    ValleyGirl TUG Member

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    Me Too

    Wanting to add my 2 cents, trying very hard not to quote and thereby ruffle feathers, gain another valuable increase in my "total post #" and caveating with the obligatory IMO!:cool:

    I feel the above discussion looks at the SP cost/value issue from different sides of the door (one side labeled "Entrance" and the other "Exit").

    I believe the math fully supports never buying/"Entrance" a TS from a developer and using all the salesperson's fuzzy math/reasoning to overcome your objections and thereby allowing for an emotional decision. That said - I agree with the 1/20th purchase price added for cost/value when trying to determine the cost of exchanging a week for SPs in the general sense.

    "On The Other Hand" (Ref - Nationwide commercial)
    If one already owns a timeshare, and is already obligated to pay mx fees then:
    When one finds they cannot use their week/"Exit", cannot sched a convienent time, wish to give a vacation at a different location to a family member then banking, exchanging for SPs, deposit to II, or renting provide different alternatives for valuing your decision and Salty's valuation is also accurate.

    The CC issue seems to go down a similar trail - again if you are going to use a CC and there is no difference in price whether you use cash or credit - then you simply use the CC that provides you with the most value. For most on this BB that would be AMEX SPG.

    I will hold myself back from a further discussion of exchanging for Airline Miles!:ignore:
     
    Last edited: May 6, 2012

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