Chase Launches Starbucks Card: Is It Worth the $49 Annual Fee?

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Since launching, the Starbucks® Rewards Visa® Card has updated its sign-up bonus and ongoing rewards. See NerdWallet’s full review for updated information.

With the new Starbucks® Rewards Visa® Card, you can earn a sign-up bonus worth 10 Caramel Macchiatos and 10 slices of iced lemon pound cake. That would be a pretty sweet deal — literally — if you can stomach the card’s $0 intro for the first year, then $49 annual fee.

On Feb. 1, 2018, Chase announced details of its co-branded card for the popular coffee chain. Based on Starbucks' existing loyalty program, the Starbucks® Rewards Visa® Card offers instant Gold status and pays out in Stars (rather than points or miles). Once you have 125 Stars, you can turn them into a free drink or food item of your choosing, as long as it’s on the menu.

For hardcore Starbucks fans, carrying the card is kind of like paying to be part of a swanky super-fan club with seemingly endless freebies, a way to finally get something back for all of that “latte factor” spending. For less enthusiastic customers, it’s not worth the cost.

Here’s what the card offers:

Sign-up bonus: 2,500 Stars after spending $500 on purchases in the first 3 months from account opening (equal to 20 food or beverage items)

Annual fee: $0 intro for the first year, then $49

Extra bonus: 250 Stars when you use theStarbucks® Rewards Visa® Card to load a registered Starbucks Card in the Starbucks mobile app for the first time

Ongoing rewards:

• 1 Star for every $4 spent outside of Starbucks stores

• 1 Star for every $1 digitally loaded to your registered Starbucks Card in the Starbucks mobile app using theStarbucks® Rewards Visa® Card; with the 2 Stars per $1 spent that you earn when paying with that registered card, that adds up to 3 Stars per $1 spent

Other benefits:

• Instant Gold Status, which comes with added benefits

• 8 annual Barista Picks: Each year, you’ll get eight drinks or food items free; these are selected for you.

The annual free Barista Picks on this card alone could make up for much of the annual fee, if you take full advantage of it. The ongoing rewards system is also solid: Assuming you redeem your Stars for food and drink items worth $5 each, you’d be getting 4 cents out of each Star. That’s a good value — but only if you're OK with redeeming rewards for Starbucks food or drink items, the only redemption option available. For some people, that’s a big if.

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Here’s what makes this program a little unusual: To earn the full amount of rewards possible at Starbucks, you also have to load your Starbucks Card — a separate registered card linked to the rewards program — with cash from your Starbucks® Rewards Visa® Card through the mobile app, then pay with the registered card at the counter. That requires some extra legwork on your part.

Aside from the annual fee, there are two other downsides to this card worth considering:

• The rewards can only be redeemed for Starbucks food or drink items.

• The Stars expire six months after the month in which they’re earned, according to the program rules. If you want to get your full money’s worth of that sign-up bonus, redeem quickly.

This card isn’t worthwhile for those who visit Starbucks just once in a while, or those who prefer to redeem rewards for cash back or travel. But for Starbucks fans who prefer earning rewards in food-and-drink form and want VIP treatment at their favorite store, this card is a solid deal.