Credit Card Rewards: Transferable Credit Card Points GUIDE

Transferable Credit Card Rewards

Credit card rewards come in many forms and arguably the most valuable type of rewards are known as transferable points (aka flexible currencies). Credit card issuers and banks offer reward programs through which you can earn points to redeem for rewards, travel discounts and other thinks like merchandise and gift cards. From loyalty programs to cash back points that offer flexible redemption options, there are several different ways to earn and redeem those points. There are several types of transferable rewards program points including Chase Ultimate Rewards, American Express Membership Rewards, Citi Thank You Points and Capital One Miles. Last, Marriott Bonvoy Points are transferable to airlines but don’t have the same flexibility in terms of other redemption options. Basically these programs are credit card rewards points that can be transferred to  travel partners of each bank which include a variety of flight and hotel loyalty programs for award stays and flights.

The value of these points is hugely enhanced by the flexibility available when it comes to redeeming points. The ability to redeem rewards with several partners rather than co-branded or cash back cards which are limited to one or two loyalty programs or straight cash gives you a bunch of options to book the same travel and get the best price possible. I always say that flexibility means more options which means more opportunity to maximize value.

Complete Guide: Chase 5/24 Rule (2020)

Over the next few weeks I’ll be doing some guide type posts and then organizing them into a primer for newbies and a resource for experienced vets, so please let me know what types of posts you’d like to see in this series. The Bougie Miles guide to transferable points, will detail the credit cards you can earn these points with, when it makes sense to transfer points, and a complete list of each program’s airlines and hotels partners (i.e. those which you can transfer your points to.)

What are Transferable Points (AKA Flexible Points) and why do I want them?

Transferable point currencies are credit card rewards points that offer a ton of flexibility when it comes to redeeming them because they allow you to transfer your points to specific partners usually for travel. Maximizing the value of rewards points is typically the goal when redeeming points and it’s much easier to get maximum value from points with a variety of redemption options. Also known as bank points, transferable points can be redeemed for travel, cash back, merchandise, gift cards and transferred to travel partners to book award tickets or stays.

There are 5 Main Types of Transferable Credit Card Points

Chase Ultimate Rewards Points

American Express Membership Rewards Points

Citi Thank You Points

Capital One

Marriott Bonvoy Points

(while these are not as flexible as the others- they are considered a legitimate option for transfer to airlines.)

GUIDE: Amex Business Platinum 35% Pay with Points Airfare Rebate

How to Maximize the Value of Your Points

Maximizing the value of your points can be very complex because of the following reasons:

1. Each bank has Various ways to redeem points (Let’s use Chase as an example)

• Ways to Redeem Ultimate Rewards Points
  • Pay Yourself Back (new way to redeem Ultimate Rewards for a statement credit)
  • Use points to buy merchandise
  • Transfer to Travel Partners to book award stays or flights
  • Book travel through the chase travel portal and pay with Ultimate Rewards Points
  • Get cash back or statement credits
  • Redeem points for Gift Cards
  • Shop with points on Amazon

2. Value of Points and Miles Vary By Transfer Partner

• Not all program specific miles and points are created equal and to further complicate the issue, certain loyalty programs redemption values vary widely depending on how you redeem them.
  • Example: You can transfer Chase Ultimate rewards Points to World of Hyatt and IHG Rewards Club. IHG points are typically considered to be worth around .5 cents a piece, whereas World of Hyatt Points are generally valued around 2 cents a piece- so approximately 4 times as valuable as IHG points. BUT those are only estimates and really depend on how you plan to use them. Sometimes a 4 night IHG stay can yield a higher value per point than a 4 night Hyatt stay because certain IHG credit card holders get 10% of their points back in addition to the 4th night free on award stays.

3. Difference in points values based on the credit cards you hold within each program

• An example of this would be the fact that Chase Sapphire Reserve and Chase Sapphire Preferred cardholders get 50% or 25% (respectively) more value per point when redeeming points through the Chase travel portal than people who only hold no fee cards like the Chase Freedom and Chase Freedom Unlimited.

Should you Buy Points or Pay Cash for your Next Hotel Stay?

Should You Transfer Points to a Partner or Book Through the Travel Portal?

The best way to use your transferable points to book travel comes down to the option that gives you the best flight or hotel stay for the least amount of points. (Of course there are exceptions which I’ll cover in a separate post.) Since this is an introductory big picture type post, we’ll keep it as simple as possible with a straight forward example. In the following example, we’re deciding whether it makes sense to book through the travel portal or transfer Chase points to United to book an award ticket.

United Flight 1871  (EWR-LAX) (Cash Price is $549 on United.com)

• Booking through United: Price in Miles for First Class is 35K (Saver) or 50k (non-saver)
• Booking through the Chase Ultimate Rewards Portal with Points for each card
  • Chase Sapphire Reserve: 36,540 Points (Points are worth 1.5 cents each when used to book travel in the Ultimate Rewards travel Portal)
  • Chase Sapphire Preferred or Chase Ink Preferred: 43,920 (Points are worth 1.25 cents each when used to book travel in the Ultimate Rewards travel Portal)
  • Freedom, Ink Cash, Sapphire: 54,900 (1 cent a piece)

As you can see from the example, transferring points to United Airlines Miles at a 1:1 ratio would be the lowest number of points since there is saver award space available. If there were no saver award space and the ticket was 50k United miles than it would make sense to book through the portal with any of the premium cards. Again, this excludes the value of the miles you would earn on a cash ticket and we’ll cover that in a separate post.)

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