Home Credit Cards Sorry Starbucks, I Love You But I’m (Still) Not Going To Sign Up For Your Credit Card

Sorry Starbucks, I Love You But I’m (Still) Not Going To Sign Up For Your Credit Card

by joeheg

Starbucks and Chase offer the co-branded Starbucks Rewards™ Visa® Card. This credit card links directly to your Starbucks Rewards account and lets your earn stars for your purchases.

Starbucks Visa

Starbucks is still constantly emailing me offers to get this card. I’m sure if you’re a Starbucks Rewards member, you’ve also received these messages. If you’re a regular visitor to Starbucks, it may seem to make perfect sense to get this card. You drink their coffee anyway; why not earn free drinks for your everyday spending, right?

I’m an admitted Starbucks-a-holic. Every morning shift I work, I’ll stop by for an iced coffee with sugar-free vanilla syrup (no classic) and 2% milk. I was quite proud when the baristas at my store would make my coffee for me without having to order (which is now unnecessary since I pre-order with the app). My old Starbucks wished me goodbye on my last visit when I was transferred to a new work location and wouldn’t be a regular anymore. It was an appropriate farewell – a note on my coffee and a Starbucks gift card. 🙂

I’m obviously the target audience for the Starbucks Rewards Visa card, right? The problem is that before I’m going to apply for any card, I’m going to do the math and see exactly what it offers.

Starbucks Rewards Visa Card

Annual Fee

The Starbucks Rewards Visa has a $49 annual fee and they are currently waiving the fee for the first year.

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Earn 300 Stars Instantly

You’ll get a bonus right away with this card as you’ll earn 300 Bonus Stars the first time you use your Starbucks Rewards Visa Card to digitally load your registered Starbucks card in your app.

Sign Up Benefits

The current sign-up bonus for this card is 4,500 stars after spending $500 on purchases in the first three months from account opening.

Starbucks junkies know Starbucks Rewards has tiers. What’re 4,500 stars worth in dollars? Looking at the reward levels’ sweet spots, it’s possible to get around 7 cents per star value. That’s a $315 bonus, much better than the $200 value the card had when it was first introduced but not as good as the 6,500 point offer they’ll occasionally put out there.

This card is subject to the Chase 5/24 rule so if you’re signed up for 5 or more cards in the past two years; you’re not getting this one. For answers to some of the most common questions about 5/24, check out this article.

Spending Categories

Starbucks

You’re told that you can receive up to three stars per dollar for purchases in Starbucks stores on the sign-up page. Here’s the actual earning rate:

Earn 1 Star for every $1 you digitally load to your registered Starbucks Card on your App with your Starbucks Rewards™ Visa® Card in addition to the 2 Stars per $1 you already get when you pay with your registered Starbucks card or your registered Starbucks Card on your App as a Starbucks Rewards™ Member. That’s a total of 3 Stars for every $1 you spend at Starbucks® stores.

As a reminder, EVERYONE gets two stars per dollar for Starbucks purchases in the Starbucks Rewards program. This card gives you 1 extra star for every dollar loaded to your Starbucks account (via the app) from the Starbucks Visa. So you are getting one extra star per dollar. Remember a single star is worth around 7 cents. So reloading your Starbucks card with the Starbucks Visa can earn up to 7% back.

Other Purchases

  • Earn 1 Star per $2 you spend at grocery stores, on local transit and commuting, and on internet, cable, and phone services
  • Earn 1 Star per $4 you spend outside of Starbucks stores

Using the same formula as above, that means you’ll earn a maximum of 3.5 cents back on every dollar for spending at grocery stores, local transit and commuting, and on internet, cable and phone services. You’ll earn 1.75 cents back for all other purchases.

To get that return, you have to get maximum value from your stars EVERY SINGLE TIME. If you use them for a lunch sandwich and only get 3.5 cents per star value, your rewards just lost 50% in value. See the problem? Maybe there’s another value to be had with the card.

Barista Picks

This is a benefit specific to the Starbucks Visa card and there’s no way to tell how valuable it is.

Explore our favorite food and drink items with a variety of free Barista Picks curated just for cardmembers. They’ll be delivered to your email and App 8 times a year for you to redeem at participating Starbucks® stores.

Eight times per year, Starbucks will add a free item for you to redeem in your account. However, there’s no way to see what the value of this may be. Will they give you a cookie or a Frappuccino? Even if you say this item will average $6 in value, that means you’re breaking even on the $49 annual fee.

Foreign Transaction Fee

The Starbucks Rewards Visa charges a 3% fee for foreign purchases so it’s best to leave this card at home when traveling overseas.

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Other Benefits

You’ll also get other Visa benefits when making charges with the Starbucks Rewards Visa card. Here’s a list from the card’s website:

Auto Rental Collision Damage Waiver

Decline the rental company’s collision insurance and charge the entire rental cost to your card. Coverage is provided for theft and collision damage for most cars in the U.S. and abroad. In the U.S., coverage is secondary to your personal insurance.

Extended Warranty Protection

Extends the time period of the U.S. manufacturer’s warranty by an additional year, on eligible warranties of three years or less.

Purchase Protection

Covers your new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.

Trip Cancellation / Interruption Insurance

You can be reimbursed up to $1,500 per person and $6,000 per trip for your pre-paid, non-refundable passenger fares, if your trip is canceled or cut short by sickness, severe weather and other covered situations

Final Thoughts

So what does this all mean? Chase and Starbucks are constantly tweaking the Starbucks Rewards card. Even with the improvements, I’d say that you’d be lucky to get 2% back on the money you spend on this card. You get eight free items throughout the year but you have no idea what they are. You can get a signup bonus worth $315.

In comparison, you can sign up for the Sapphire Preferred card and get 60,000 Ultimate Rewards points after spending $4000 in the first three months from account opening. Those points are worth at least $750 and the annual fee is waived for the first year. This card also earns 2 Ultimate Rewards points for spending on restaurants (which INCLUDES STARBUCKS STORES AND AUTO RELOADS)!!!!! You’ll earn two stars per dollar plus two Ultimate Rewards points. I think that’s worth more than three stars with the Starbucks card.

If that would be too much of a stretch to spend $4000 in three months, you can still sign up for a card that will earn you 2% back on all purchases without having to pay an annual fee. The Fidelity Rewards Visa card earns 2% back on all purchases.

While the approximate 2% return on all purchases and extra for Starbucks purchases makes this card a decent value, I can’t recommend it. If you’re reading this webpage and have gotten this far down my article, you’re not in the game to get a free coffee (or twenty). You want to be able to travel better using your miles and points. Don’t waste a credit card sign up on this card and sign up for cards that will get you closer to your travel goals instead.

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This post first appeared on Your Mileage May Vary

3 comments

Ryan August 3, 2019 - 4:49 pm

Not a valuable card. Yes, 7 cents per point is POSSIBLE, but its usually worth about 4 cents. This is not a good deal at all.

Reply
Blasio February 17, 2021 - 5:50 pm

The barista pick is more of a suggestion. If you don’t like the pick you can get any other drink (any size you want) or food item on the menu. It basically guarantees you 8 things of your choice throughout the year and as someone whose drinks run just under $10 after customization, it’s worth the yearly fee. Also, for the past two years I’ve had the card, in the month of December, members get two drinks for free on the weekends. Definitely been Worth it!

Reply
Jenny July 2, 2021 - 7:58 pm

I resisted for a long time, but there are months where I spend 100 bucks. I’ll try it out for a year. I mean after the year’s over I haven’t really lost out on anything and hopefully the credit inquiry will be gone.

Reply

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