Chase and Starbucks Launch First Co-Branded Credit Card
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
The Starbucks credit card has finally arrived. On Thursday, Starbucks and Chase launched the co-branded Starbucks Rewards Visa Card, a card that allows you to earn Starbucks Rewards stars on non-Starbucks purchases.
First, the basics. The card comes with a sign-up bonus of 2,500 stars after you spend $500 on purchases in the first three months. Note that the $500 in spend doesn’t have to be spent at Starbucks — it’s cumulative purchases on the card at any retailer. Then, once you load your Starbucks Rewards Visa Card to your Starbucks card in the Starbucks app for the first time, you’ll get a bonus of 250 stars.
When it comes to spend, the bonus earning structure breaks down as such:
- You’ll earn 1 star for every $4 spent outside of Starbucks
- You’ll earn 1 star for every $1 digitally loaded on your Starbucks card in the app, in addition to the 2 stars per dollar when paying with your in-app Starbucks card
So, you’ll want to be sure that if you’re purchasing something at Starbucks, you’re using the credit card to load money digitally onto your app-based Starbucks card in order to get the maximum 3 bonus stars per dollar spent.
The card also comes with automatic Gold status in the Starbucks Rewards program. With Gold status, you’ll get a free birthday reward, the ability to order ahead, free in-store refills, access to member events, paying by phone, double-star days, a personalized gold card and a reward for every 125 stars. As a benefit of the credit card, you’ll also get eight complimentary curated barista picks annually, which are automatically loaded on your app and based on your beverage preferences.
The Starbucks credit card comes with a $49 annual fee, which is not waived for the first year. You will also be charged foreign transaction fees if making purchases with the card while abroad.
The stars you’re earning with every purchase made with the Starbucks Rewards Visa cannot be transferred to any partners. Instead, they’re redeemable only for Starbucks purchases. Because the card comes with automatic Starbucks Rewards Gold status, you’ll be able to redeem for a free reward with every 125 stars. The 125-star can be used toward any eligible food or beverage item in store — which could be anything from a tall coffee to a more extravagant Venti Frap.
So, based on the sign-up bonus alone (2,500 stars after you spend $500 in the first three months), you’ll get 20 free food or beverage items. Then, when you load your in-app Starbucks credit card, you’ll earn an additional 250 stars, which is the equivalent of two more free food or drink items.
It’s worth noting that you can’t redeem stars at every Starbucks store. You can redeem the stars and take full advantage of the card’s full benefits, such as the barista-curated drinks, at more than 8,000 participating Starbucks locations — and they’re all in the US. While you can’t redeem stars at every Starbucks location, you can earn stars at anywhere in the world that Visa is accepted. Just keep in mind that the card does not waive foreign transaction fees.
Is It Worth It?
If you’re a frequent Starbucks customer, the sign-up bonus may seem especially appealing — 20 free drinks or food items. However, the card might not be all that worth it once you’ve hit the minimum spend. If you use the card for only non-Starbucks purchases, you’ll need to spend $500 in order to get one free drink or food item. And, with a card like the Chase Sapphire Reserve earning you 3x points on the same dining purchases, you could be accumulating more valuable points elsewhere.
If you value each redemption (125 stars) at $5, you’re getting about a 1% return on non-Starbucks spend. Keep in mind also that the card comes with a $49 annual fee. After you earn the sign-up bonus (2,500 stars) and load your in-app Starbucks card for the first time (250 stars), it’ll be hard to break even on the cost of the annual fee with your rewards:
- $500 in non-Starbucks purchases at a rate of 1 star per $4 spent = 125 stars (redeemable for about $5)
- About $42 on Starbucks purchases at a rate of 3 stars per $1 spent = 125 stars (redeemable for about $5)
Based on our soft valuation of 125 stars being worth $5, you’d need to spend about $420 on Starbucks purchases, earning 3 stars per dollar in order to break even on the $49 annual fee. Even more outrageous, you’d need to spend about $5,000 on non-Starbucks purchases in order to break even on the $49 annual fee.
That being said, if you’re a frequent Starbucks customer, the card could be worth it for the complimentary Gold status, sign-up bonus and constant earning. Plus, the eight complimentary barista picks annually add some more value. However, we don’t recommend using this credit card for non-Starbucks purchases. Earning only 1 star for every $4 spent on non-Starbucks purchases is a pretty unfavorable rate no matter how you look at it.
Welcome to The Points Guy!