A lot of people ask me why I don’t use American Express Starwood Preferred Guest Credit Cards for manufactured spending as much, even though its such a valuable currency. The reason I don’t do it is because American Express isn’t the most ms-friendly bank. There’s no doubt that SPG points are some of the most valuable points out there right now. They can be transferred to airline miles at a favorable ratio, they can be redeemed for free SPG nights at a reasonable rate, but more importantly, SPG points can be transferred to Marriott Rewards at a 1:3 ratio. That may not sound like a big deal, but this transfer ratio makes Marriott Flight & Hotel awards and free nights much more attainable. So you would think putting tons of manufactured spending on the Starwood credit cards would be a great idea, right? Wrong.
American Express is notorious for their financial review, which can be triggered by abnormally large amounts of spending. If you’re spending twice your stated annual income on Giftcards.com orders, for example, you may get audited by American Express. Or maybe they’ll skip the financial review completely and just shut you down. That happens. So do credit card sign-up bonus claw-backs. You really don’t want to mess with American Express, especially since they are the only issuers of the Starwood credit cards. That’s a really valuable relationship you don’t want to lose while the Starwood Preferred Guest program still exists.
“But SPG and Marriott will merge and the Amex card will go away. Shouldn’t I milk it while I can?” We don’t know for sure when the Starwood-Marriott merger will complete. We also don’t know what will happen to the Amex Starwood credit cards. They may get converted to a Membership Rewards-earning credit card or Amex may issue a Marriott card, similar to how Barclay handled the American Airlines-US Airways merger. Either way, if you’ve had your SPG credit card for a while, it’s probably not a good idea to get it shut down, since it will negatively impact your credit.
While I’m generally more careful about how much I MS these days, I’ve always been especially careful with Chase and American Express. Both banks have been known to shut people down for excessive manufactured spending and have even clawed back sign-up bonuses as a result. So while it’s unfortunate that I can’t really go all out with the Starwood Card (which happens to be one of the best credit cards for manufactured spending in terms of returns), I’m in this game for long-term gain and that means having to earn SPG points in smaller increments than I’d like.
Having said this, I want to get your take on how you’re using the Starwood credit cards for manufactured spending. How much spending do you put on these cards and are you at all worried about getting shut-down?
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