On February 1, Chase and Starbucks announced a new credit card, the Starbucks Rewards Visa Card. In an attempt to cater to the coffee chain’s biggest fans, the card can help users rack up Starbucks rewards points, called stars.
“We want to give cardmembers who can’t live without their Starbucks beverage an easy way to earn more Rewards,” said Jennifer Roberts, head of Digital Products for Chase, in a press release. “The Starbucks Rewards Visa Card lets them earn Stars on every purchase they make, so their next cup is that much more rewarding.”
Is the Starbucks Rewards Visa Card worth it for regulars?
But even if you’re a regular at your local corner Starbucks, the card simply isn’t worth the trouble. Here’s a breakdown of what you get and what it costs:
- Receive 6,500 stars after you spend $500 in the first three months, worth 20 food or drink rewards.
- Get 250 bonus stars the first time you use your credit card to load money on your registered Starbucks Card in your Starbucks app.
- Earn up to 3 stars per $1 spent at Starbucks stores and 1 star for every $4 spent everywhere else.
- Get eight curated barista picks throughout the year.
- Get automatic Starbucks gold status.
- Pay an annual fee of $49 per year.
Here’s the thing. Even if the card didn’t charge an annual fee, it would still be a dud. That’s because the 3X rewards rate on Starbucks purchases is a bit deceiving.
You see, you’re already getting two stars per dollar spent when you use your registered Starbucks Card (not to be confused with the credit card) to make Starbucks purchases. The only difference is that you get one extra star per dollar when you use your credit card to load money onto your Starbucks Card.
Now, to be fair, that’s not terrible. If 125 stars get you a $5 food or drink reward, that’s a 4% rewards rate on Starbucks purchases. And if you’re spending $4 on non-Starbucks purchases to get one star, that’s a 1% rewards rate. But there’s another caveat: You can only use your rewards at Starbucks. There’s no flexibility. And you’re also paying an annual fee worth roughly 10 food or drink rewards, setting you back every year.
Instead of applying for this card, check out some of the best cash-back credit cards on the market, which can offer you better rewards for both Starbucks purchases and non-Starbucks purchases alike. Check out SuperMoney’s credit card reviews page to compare different cards to see which one works best for you.
Ben Luthi is a personal finance writer and a credit cards expert who loves helping consumers and business owners make better financial decisions. His work has been featured in Time, MarketWatch, Yahoo! Finance, U.S. News & World Report, CNBC, Success Magazine, USA Today, The Huffington Post and many more.