Introduction to 'Transferable' Reward Points

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What are “transferable credit card points”?
Transferable credit card points are better than regular frequent flyer miles
Transferable reward points versus fixed-value reward points
Introduction to the different transferable point programs
Comparing the credit card reward programs

The three biggest credit card companies operate their own reward programs. Amex’s is called “Membership Rewards”, Chase’s is called “Ultimate Rewards”, and Citibank’s is called “ThankYou Rewards”. Diner’s Club and Barclays have similar programs, but because you can no longer sign up for new cards, they are only available for existing cardholders.

The points that you earn from these programs can be transferred to the loyalty programs of a bunch of different airline and hotel partners, so that you can redeem them for free airplane tickets and hotel rooms. For example, you can transfer your Chase Ultimate Rewards points into United miles to book an award flight to Europe, into Southwest miles to pay for a quick flight to Las Vegas, or into Hyatt points to book a free hotel room in New York City. They are like frequent flyer points that you can magically use with several different frequent flyer programs.

Transferable reward points, earned directly from the credit card companies, are more valuable than regular frequent flyer miles. For most people, they are the best way to earn rewards from credit card spending.

The points that you earn with the Marriott / SPG hotel program can also be transferred (at favorable rates) to airlines partners. Even though they are technically hotel points, they act enough like transferable credit card points to be part of the same conversation.

Transferable credit card points are better than regular frequent flyer miles

Earning points with Amex’s Membership Rewards, Chase’s Ultimate Rewards, Citibank’s ThankYou Rewards, Barclay's Arrival Premier Card, and Diners Club Rewards is almost always better than earning miles directly with an airline program.

You can take advantage of award space on almost any airline. When you collect points with a specific frequent flyer program, you can redeem them for flights on any of its partner airlines. For example, if you are earning United points, you can redeem them for flights on over two dozen different airlines that partner with United. However, if the award seats to your destination are with American Airlines, or one of American’s Oneworld partners, you are out of luck.

But, with transferable points, you can transfer your points to a frequent flyer program that belongs to any of the three major alliances (and some additional program as well). You can then redeem those frequent flyer points on all those program’s partner airlines. In the end, each type of transferable reward point can be used to book frequent flyer tickets on over 100 different airlines. So, if you have Ultimate Reward points, you can transfer them to United to book one of United’s flights, to British Airways to book a flight on American, or to Air France to book a flight on Delta.

By collecting transferable reward points, you are much more likely to be able to book the flights that work best for your schedule, or take advantage of the only airline that has available award space to your destination.

You can take advantage of whichever award redemption requires the fewest miles. Different frequent flyer programs require different amounts of miles for the same trip, and have different rules and fees. For example, with most airline programs, a round trip to Hawaii is 45,000 points in coach, or 80,000 miles in business/first. But, using Korean Airline’s frequent flyer program. you can fly there (on Delta Airlines) for only 25,000 in coach and 45,000 points in business/first. Rather than spending 45,000 Delta points, you can spend 25,000 Korean airline points, for exactly the same flight!

Transferable point programs let you transfer to whichever of their frequent flyer partners requires the fewest miles, rather than being stuck with the award chart of a single program.

Or maybe you can get better value by using your points for a hotel room instead. It is much easier to find availability for free hotel nights, than for free airplane tickets. For example, even over Christmas break, you could transfer 20,000 points to Hyatt to book the Hyatt Maui, or 12,000 points to book the Hyatt Place Waikiki Beach, and easily get more than 2 cents per point in value—but you are unlikely to be able to take advantage of frequent flyer tickets (at least at normal mileage costs).

Transferable point programs often let you get good value from your points for redemptions other than frequent flyer tickets.

You can easily “top-off” your account balances. Over time, you are likely to build up points in several different reward programs from your paid hotel stays and flights, or perhaps from credit card signup bonuses. However, you might not have enough points to make the award redemptions you want. With transferable credit card points, you can often combine the points from your credit card, with the reward points that are already in your account, to have enough to redeem an award. Transfers can also be used to keep an airline or hotel account active so that you don’t lose your points.
You can get better value if you want to “cash-out” your points. If you decide you can’t find good enough redemptions, you’ll generally get more value out of cashing-out your credit card points than you could by cashing-out frequent flyer miles. For example, you’ll only get about .5 cents per mile if you use your Delta airlines miles to buy Amazon gift cards; but you can get 1.5 cents per point, if you use your Ultimate Reward points to buy travel on Chase’s website (without needing to worry about award availability).

The main drawback to transferable reward points is that you can’t always take advantage of “Anytime” awards on your most-frequently-used airline. When you want to fly on a specific airline with your transferable reward points, you will often have to transfer to one of their partners, because the airline you want to use isn’t a direct partner of your credit card company. You will then need to redeem a “partner award”, which only has access to regularly-priced award availability.

Transferable reward points versus fixed-value reward points

Don’t confuse transferable reward points, like Amex’s Membership Rewards, with fixed-value points that you get from credit cards like the Barclays Arrival Plus card. The points you get from the Barclays, Bank of America, and U.S. Bank credit cards can indeed be used to book flights on any airline. But, you get a fixed amount of value, every time you use your points.

Essentially, these credit card companies are just giving you cash back, but making you use the cash to pay for travel. For example, the Arrival Plus card is going to give you 2 points per dollar, and let you use those points to purchase travel at 1 cent each, with 5% rebate. It is the same as earning 2.05% cash back.

Transferable reward points can sometimes be used in that way, but they can also be transferred into actual airline and hotel reward points, and then redeemed for frequent flyer tickets and award nights. While there isn’t always award availability (especially for airplane tickets), you can get much more value from using these points in this way.

For example, if a ticket to Hawaii costs $600, you will need 60,000 Arrival Plus points to pay for the ticket, which you could earn by spending $30,000 on the Arrival Plus card. Or you could book it with 25,000 Singapore Airline miles, by transferring 25,000 Ultimate Reward points, which you could earn by spending less than $17,000 on the Chase Freedom Unlimited card.

If you are booking business class tickets, the disparity is even greater. A $4,000 business class ticket would require 400,000 Arrival points, or $200,000 in credit card spending. Booking it as a frequent flyer ticket might require 80,000 Ultimate Reward points or under $55,000 in spending. Or even less, if you are able to take advantage of bonus rewards on travel or restaurant spending.

Only true “transferable” reward points let you combine your points with your existing miles, and get extra value from your points by finding good frequent flyer (and hotel) redemption opportunities.

Introduction to the different transferable point programs

Ultimate Rewards

We think Chase’s Ultimate Rewards is the best of the transferable credit card programs, especially for people who are just starting out. Ultimate Rewards Guide.

The Ultimate Rewards Program has a small, but good group of airline partners. Their partners include United Airlines for Star Alliance awards without fuel surcharges and British Airways for low-award-cost short-distance Oneworld flights.
But what really differentiates the Ultimate Rewards program is that you can redeem your points for good values on something other than hard-to-take-advantage-of frequent flyer tickets. With Ultimate Reward points, you can always get good value, with very little effort, by booking award nights at Hyatt hotels, purchasing fixed-value award tickets with Southwest or JetBlue, or purchasing any other travel through the Chase website. In contrast, frequent flyer tickets are the only good option that are normally available with Membership Reward or ThankYou points.

The reason that we unequivocally recommend Ultimate Rewards program is that you don’t have to mess around with trying to find a good opportunity to book frequent flyer tickets, if you don’t want to. But, in contrast to earning straight cash back, you retain the upside of using your points for frequent flyer tickets.

Along with Membership Rewards, Ultimate Rewards is the best program for earning points. Ultimate Rewards has the best cards for travel and restaurant rewards and for everyday spending (for most people). You can also receive lucrative signup bonuses from several different cards.
However, if you already gotten a few new credit cards in the past couple of years, you may not be able to take advantage of the program. You will be blocked from getting any of the Ultimate Rewards cards by the Chase 5/24 rule. Your only option for taking advantage of the Ultimate Rewards program would be to hold-off getting any other cards, until you are back under the 5/24 limit.

Membership Rewards

Amex’s Membership Rewards is a the best program for anyone who is comfortable with using their credit card points for frequent flyer rewards. Membership Rewards Guide.

The main drawback with the Membership Rewards program is that there are usually no decent redemption options, other than transferring to frequent flyer programs. Unless you find a good frequent flyer award ticket opportunity, you can only expect to get 1–1.25 cents in value for your points. Even though you can transfer to hotel partners, the value that you’ll get for your Membership points, when used in this way, is usually pretty low.

So, if you don’t place a super-high value on premium-class award tickets, don’t want to get frustrated about the lack of good opportunities to get good value from your frequent flyer miles, and don’t want to deal with the extra complexities of booking award travel, you aren’t going to get as much value out of Membership Rewards, as you would from Ultimate Rewards.

If you do plan to redeem for flights, Membership Rewards is better than Ultimate Rewards. Membership Rewards has many more transfer partners, making it more likely you can take advantage of a “sweet spot”, where you can book an award for less than the normal number of points. Unlike Ultimate Rewards, it doesn’t partner with United, which are two of the best programs. On the other hand, Membership rewards partners directly with Delta. If you live in Delta territory, this is a plus, as you can use your points for non-saver-level awards.
On the plus side, Membership Rewards frequently runs promotions where you can get a bonus when you transfer to selected airline partners. If you take advantage of these, you can get significantly more value for your points, sometimes getting as many as 1.5 miles for each membership reward point. However, unless the promotion coincides with a trip you are booking, transferring your points ahead of time, to advantage of a higher transfer rate, means you are locked in with that partner. Take Advantage of Transfer Bonuses to Get More Value from Your Reward Points.

Membership rewards is the easiest program to build up points with signup bonuses, and they offer very good earning rates in many categories. Amex cards offer the best possible reward rates on airfare, groceries, and gas. If you are willing to put up with some quirks, you can earn 1.5 points per dollar on everyday spending (just like you can with Chase). And if you are willing and able to get a business card, you can earn 2 points per dollar on every day spending. There are also many more options for earning lucrative signup bonuses than there are with Chase, and no 5/24 rule to slow you down.

Membership Rewards with business cards

If you have any sort of a small business, even one that hasn’t made any money yet, you are eligible to sign up for the small-business credit cards. If you can do so, the Membership Rewards program becomes considerably more valuable. Unlock Extra Reward Points with Business Credit Cards.

Amex Platinum Card Guide

You can also get the Amex Blue Business Plus card to earn 2x points on all purchases. This is better than the 1.5x Ultimate Reward points that you can earn with one of the Chase Unlimited cards. Get a Great General Purpose Reward Card and Use It for All of Your Spending.
If you get the Platinum Business card, you gain the option to "cash-out" your Membership Reward points at 1.54 cents each. Whenever you purchase tickets from Amex Travel on your favorite airline, or for any business or first-class seats, you can use your points at 1 cent each, and get a 35% refund on the points you used. For example, if you want to purchase a ticket for $320, you would use need to use 32,000 points. But, then you would get 11,200 of those points back. When you do the math, this works out to 1.54 cents in value per point.
This alters the dynamics of the Membership Rewards program, and makes it more universally appealing. With this option, you can always guarantee a floor of 1.54 cents in value per point, when you want to avoid the hassles involved with trying to find a good frequent flyer redemption. You now have an extremely reliable way to get solid value from your points, and still have the upside of getting even more value from a great award ticket opportunity. It is not quite as high as the non-frequent-flyer-ticket options from Ultimate Rewards, but it starts coming close.
This flexibility comes with additional costs associated with the Business Platinum card. The annual fee for this card is $450. It does come with a $250 credit that can be used for incidental expenses, such as inflight food, on a single airline of your choice. While it can be hard to fully use this credit, it can partially offset the annual fee. The Business Platinum card also comes with many very useful perks and benefits (shared with the regular Platinum card), so it might be a card you want anyways. But, if you don’t want those benefits, or you are going to have them anyway, as a by-product of signing up for the different versions of the Platinum card to earn signup bonuses, it can be expensive to take advantage of its additional redemption flexibility. Which Premium Reward Card is Right for You?

ThankYou Rewards

Citibank’s ThankYou Rewards isn’t nearly as good as the Ultimate Rewards or Membership Rewards program. ThankYou points are still very valuable, and worth collecting, just not as valuable as Ultimate Reward and Membership Reward points. It falters in several different ways. ThankYou Rewards Guide

They have a smaller and less valuable set of airline partners, although they still have a least one reasonable choice in each of the major alliances.

Like the Membership Rewards program, frequent flyer tickets are the only good option for redeeming your points. You are unlikely to be able to get good value redeeming points with their hotel partners. You can always use your points to pay for airline tickets at a rate of 1-1.25 cents each. The older option to redeem at 1.66 cents on American Airlines flights is no longer available.
On the earning side, they are held back by only having a few ThankYou rewards cards. With only a few cards, it is harder to collect a bunch of different signup bonuses, and there aren’t good options for earning rewards on some bonus categories. The Prestige card does offer great rates on travel, and is the only card that offers bonus points on “entertainment”, and they have some good options for stuff you buy from online merchants.
ThankYou points are tied to the specific credit card that earned them. If you cancel that card, you only have 30 days to use them, or transfer them to a partner program. With Chase and Amex, you can keep using your points as long as you have at least one card still active in the program, and there are no-annual-fee cards for you to take advantage of.

Marriott

Marriott has the most valuable points of any of the transferable points programs, but it is the hardest program to earn points with. In addition, you'll earn less "miles" for any credit card spending.

Marriott gives you 25,000 miles for every 60,000 points. With the other programs you'll almost always get 1 mile per point. Even if you can earn twice as many Marriott points as your spending, you'll be getting less miles per dollar.
Marriott has, by far, the largest and best collection of transfer partners. You can book on the widest range of airlines, better take advantage of non-saver award availability, and always take advantage of the best available redemption rates.
The other major downside of their airline program is that it can take days, or sometimes even weeks, for points to transfer. Award availability might disappear before your points have had a chance to transfer. Even worse, you could wind up in a situation where your points are stranded in a specific airline program.
The main drawback of the Marriott program is that is hard to earn points (compared to the other transferable point programs). You can earn a bunch of points by signing up for various SPG and Marriott credit cards, but none of them offer competitive earning rates for your spending, and there are a set of limitations that make it hard to quickly accumulate sign-up bonuses.

Capital One points

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In 2018, Capital One expanded its points program to allow for point transfers to over a dozen airline partners. This option isn't available for all the Capital One cards, just the two different versions of the Venture (personal) and Spark (business) cards. Capital One Miles Guide.

Like the Ultimate Rewards program, the Capital One program doesn't effectively lock you into using your points for frequent flyer miles. You can still receive 1 cent per point, or 2 cents per dollar, when you use your points to purchase any sort of value. Of course, like the other transferable points programs, you are likely to get higher value by converting your points to miles.
Capital One miles DON'T transfer on a 1:1 basis. You'll only receive 750 miles for every 1,000 points. But, because you'll earn 2 points per dollar, you are still receiving 1.5 miles per dollar, which is essentially the same as the Chase Freedom Unlimited or Amex Everyday Preferred card. With Singapore Airlines and Emirates you'll only receive 500 miles for every 1,000 points, or 1 mile per dollar.
Capital One's program isn't as attractive as the other transferable points programs. Capital One's set of airline partners isn't as valuable and their are no good options for earning bonus category rewards (other than on prepaid hotels through Hotels.com). If you want to avoid the hassles of frequent flyer tickets, Capital One will give you more value than Membership Rewards or ThankYou Rewards, it doesn't provide as much value as Ultimate Rewards.
We recommend earning points with signup offers (if you can), but we would use other cards for ongoing spending. You'll earn more valuable rewards with the Chase Unlimited combo or other everyday credit cards, and much more valuable rewards on certain categories with cards like the Sapphire Reserve or Citi Prestige. With the points transfer option, Capital One "miles" are more valuable. So their signup bonuses are more valuable, but unfortunately it is still hard to get approved for their cards.

Comparing the credit card reward programs

Not every transferable point program is equal. If you decide to collect credit-card signup bonuses, you’ll eventually collect points with each of these programs. However, you will still want to focus on one of these programs for the rewards you earn from most of your normal credit card spending.

	Chase Ultimate Rewards	Amex Membership Rewards	Citi ThankYou Rewards	Starwood Preferred Guest
Acquiring Points
Reward rates for credit card spending	Great	Great	Good	Okay
Ease at building up points with signup bonuses	Good	Great	Okay	Poor
Airline Partners
Overall Quality	Good	Good	Less Good	The Best
Number of airline partners	7	17	12	35
Time it takes to transfer points	Instant	Instant for most	Usually 1-2 days	Usually 2-14 days
US Partners	United Southwest	Delta Hawaiian JetBlue	JetBlue	Alaska American Delta Hawaiian United
“Cash” Value (Travel Portal, Gift Card)
Base	1.00	1.00	1.00	1.00
With the right card	1.50	1.54	1.25	1.43
Other
Good option for hotel redemptions	Yes (Hyatt)	No	No	Yes (Starwood / Marriott)
Cheapest card to keep points alive (and transferable)	$95 (Sapphire Preferred)	$0 (Amex EveryDay)	Must keep card	$0 (No card needed)