Beginner Series: Part 5
Intro to flexible points
In this installment of the Freequent Travel beginner series, we will cover how you can redeem your flexible points and miles. Remember that there is no "best way" to redeem, and some ways are better than others in certain situations. In this article, I will cover the most common methods for redeeming transferrable points and provide the estimated range of value per point that you can expect.
Redeeming flexible credit card points
Flexible points are my favorite because, well... they're the most flexible. These are points that are typically earned by a bank that rewards its card members with its own branded points, such as American Express Membership Rewards, Chase Ultimate Rewards, Capital One Miles, and Citi ThankYou points. Each of these banks allows you to redeem these points by:
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redeeming points for cash into a bank account or statement credits towards your credit card bill
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transferring to travel partners via hotel and airline loyalty programs
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redeeming for a fixed value via the bank's travel portal
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redeeming for gift cards
Redeem for cash or statement credits
Value range 0.6 cents per point - 1 cent per point
Banks will allow you to convert the points you earn into cash, whether it's in the form of a check in the mail, a credit towards your credit card statement, or a deposit directly into a checking or savings account. However, depending on the bank, your points will be worth different values. Check out some of the examples below.
You can convert Chase Ultimate Rewards at a rate of 1 cent per point.
1,000 points = $100
You can convert American Express Membership Rewards at a rate of 0.6 cents per point as a credit towards your credit card statement.
1,000 points = $60
You can convert Chase Ultimate Rewards at a rate of 1 cent per point.
1,000 points = $100
Redeem via travel portal
Value range 0.7 cents per point - 1.54 cents per point
Another option to consider is redeeming points for travel purchases via your credit card's travel portal. Chase, American Express, Capital One, and Citi have their own proprietary travel platforms, similar to Expedia or Travelocity, that allow you to book airfare, hotel stays, rental cars, and other travel experiences using either your credit card or your credit card points. When paying with points, keep in mind that you can only use the points you've earned in that bank's rewards program, so you can only use Chase UR points in Chase's travel portal, Citi ThankYou points in Citi's travel portal, etc.
Each of the aforementioned banks has a "Pay With Points" option as well as a "Pay with Points and Cash" option, which simply means that you can use your credit card plus a specified amount of points to offset the cost of your purchase. However, depending on your bank, your value may vary. Some banks, like AMEX, will have point values that vary between 0.7 cents per point with a max of 1.54 cents per point*. Other banks, like Chase, have a minimum redemption value of 1 cent per point and a maximum value of 1.5 cents per point**.
* The American Express Business Platinum Card reimburses 35% of MR points for eligible Pay with Points airfare purchases, giving those points an effective value of 1.54 cents per point.
** The Chase Sapphire Reserve has a flat 1.5 cents per point value when booking travel with UR points via the Chase Travel portal
Here, we see that the W Hotel in Miami Beach, FL is priced differently on the AMEX travel portal (right) vs on the Chase Travel portal (left). However, the real point to note here is that the value per point is different on each site.
Amex values this redemption at 1 cent per point ($1,027 / 102,700 points = 1 cpp)
Chase values this redemption at 1.5 cents per point ($1,156 / 77,064 = 1.5 cpp)
The values are different because I have the privilege of carrying the Chase Sapphire Reserve card, which grants its cardmembers 1.5 cents per Ultimate Reward point when redeemed for travel and paying with points through the Chase Travel portal, but in general you will likely get around 1 cent per point when redeeming in your bank's travel portal.
Transfer to Travel Partners
Value range: 0.6 cents per point - 7+ cents per point
Flexible credit card points allow you to transfer them to travel partners via their loyalty programs. The partners to which you can transfer your points will depend on the type of credit card points you have. For example, suppose you want to be able to transfer points to Delta's SkyMiles program. In that case, you will need an American Express card that earns Membership Rewards points since they are the only points that can be converted into Delta SkyMiles.
In my personal experience, transferrable points are valuable for two main reasons:
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They are more flexible because you can transfer your points to a number of transfer partners (see Example: A below)
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You can find great value for last-minute business class flights (see Example: B below)
become most valuable when transferred to foreign airline miles programs. This is because credit card companies do not offer as lucrative points programs as they do here in the US. On top of that, foreign airlines are typically more competitive as there are more options for travelers, especially in Europe. As a result, foreign airlines such as AirFrance, British Airways, and Singapore Airlines will typically offer relatively cheaper award flights than American domestic airlines do.
Example A: Flexibility
Here, I compare the cost (in miles) of the exact same flight but on different sites.
AirFrance flight 1 departing JFK - NY on 10/22 at 4:30pm and landing in CDG - Paris at 5:55am
This flight was found via delta.com
AirFrance flight 1 departing JFK - NY on 10/22 at 4:30pm and landing in CDG - Paris at 5:55am
This flight can be booked via airfance.com
In this example, the same flight is displayed on two different sites, delta.com and airfrance.com. This is called a codeshare flight, which is a flight that is operated by one airline (AirFrance, in this case) but marketed and sold by another airline (Deltas, in this case). When airlines are part of an alliance (in this case, SkyTeam), they often market each other's flights to offer more options to customers. In some of these cases, one of the partners will price the flight cheaper.
Example B: High-value redemptions
Here, I compare the cost in dollars vs miles of a flight I booked to Naples, Italy using AirFrance Flying Blue points, which I transferred from American Express. On June 21st, I was looking to book a flight to Naples on August 12th, which is pretty close-in considering it was less than two months out AND it was peak summer time in Italy. When flying to Europe, I prefer to fly business class if it's an overnight flight so that I feel well-rested and energized when I arrive at my European destination. So when checking the AirFrance site, I stumbled across the itinerary below.
A business class flight departing JFK on Aug 12th and connecting in Paris was priced at a whopping $8,498 for 2 passengers.
(yikes!)
When choosing to pay with miles, that same itinerary costs only 100,000 miles + taxes of $484 total for two passengers.
When you do the math, the value per point comes out to about 8.01 cents per point.
(Cash Price $8,498 - Taxes $484) ÷ 100,000 = 8.01 cents/point
That's massive value, considering that your points will typically get 1 cent per point (sometimes 1.5) when redeemed through a bank's travel portal. Now, is this always the case? No, but these types of deals are not as rare as you may think. If you're savvy enough and understand the game, you can also find some of these "sweet spots" and maximize the value of your hard-earned points.
Lounge access is included when you book a business class ticket with just about any airline. Lounges are great because they often offer great amenities such as free wifi, free beverages, free snacks, generally cleaner bathrooms, and more open space to relax.
Pictured above is the AirFrance lounge in Terminal 1 at JFK Airport.
Lay-flat seats, complimentary meals and beverages (including alcohol), extra large screen, and goody bags filled with the essentials (lip balm, sleep mask, slippers, under-eye masks, etc.) were all included with the business class ticket.
Redeem for Gift Cards
Value range 0.7 cents per point - 1.25 cents per point
Your points can also be redeemed for gift cards across several retailers, depending on your bank. Redeeming gift cards is usually not advised, but if you do, then Chase seems to be your best bet. Banks like American Express and Capital One have varying levels of point redemptions that can dip below 1 cent per point, but Chase makes it very clear on its gift card redemption page that your points are worth at least 1 cent per point.
My 154,833 Ultimate Rewards points are worth at least $1,548.33 through the Chase redemption portal, and Chase makes it very clear at the top of the page. When you scroll down to the "On Sale" section, you see that you can get more value with anywhere between 10%-20% off with certain retailers, increasing the potential value of your points.
American Express and Capital One points tend to range in value from 0.6 cents per point and cap out at 1 cent per point.
While I personally would not use any of my credit card points for gift card redemptions, a case CAN be made for using Chase Ultimate Rewards points for such redemptions ONLY in the event that:
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You are able to get a discount of 20% or more (thereby getting 1.25 cents per point)
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You were already going to spend with that retailer
Unless these two conditions are met, then I would suggest holding off on using them for gift cards.
Key Points
Racking up flexible points is arguably the best way to get the most value out of your points. Remember, your point values may vary based on how you redeem them, which is totally up to you and your situation. As I always say, there is no "best way to redeem" -- everyone has different goals and different circumstances, but if your goal is to use your points for travel, then you will MOST likely get the best value with transfer partners. I will wrap this post with my personal ranking of the most valuable redemption options, in order of average value per point:
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Transfer points to Travel Partners (max value of 7+ cents per point)
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Redeem via Travel Portal (max value of 1.54 cents per point)
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Redeem for Cash or Credits (max value of 1 cent per point)
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Redeem for Gift Cards (max value of 1.25 cents per point, but high value is limited to Chase gift card redemptions)
If you want to chat with me about how to get maximum value, feel free to contact me or schedule a 1:1 to book your next trip.
The Chase Sapphire Preferred® Card
Current Welcome Offer
100,000 Membership Rewards Points after spending $4,000 in the first 3 months of card membership
The American Express® Gold Card
Current welcome offer
90,000 Membership Rewards Points after spending $6,000 in the first 6 months of card membership
The American Express® Platinum Card
Current welcome offer
125,000 Membership Rewards Points after spending $8,000 in the first 3 months of card membership
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