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Diners Club Rewards Launches Transferable Points Program

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I often preach the importance of diversifying your loyalty currencies, and one of the best ways to do that is to focus your earnings in transferable points programs. Today TPG Contributor Jason Steele introduces us to a new transfer program from Diners Club International, and explains how we can use it to maximize award travel.

This has already been an exciting year for award travel enthusiasts who like earning points in flexible rewards programs. Earlier this year, Citi ThankYou Rewards became the fourth program to offer airline transfers, joining American Express Membership Rewards, Chase Ultimate Rewards, and Starwood Preferred Guest. There were even changes within those existing programs, such as Ultimate Rewards adding Singapore Airlines as its 11th transfer partner.

Last week the good news continued, as Diners Club International emerged as the fifth major rewards program to allow transfers to frequent flyer and hotel loyalty programs. Diners Club relaunched their credit cards as part of the MasterCard payment network. These cards earn points in the Club Rewards program, which offers points transfers to 14 different airlines, 7 hotel programs, and Amtrak Guest Rewards.

In this post I’ll show you the points and miles opportunities these cards offer, and how you can maximize them.

Diners Club MasterCard
The Diners Club Card Premier and Elite earn points in the Club Rewards program.

Credit Cards and Benefits

Diners Club International currently offers two credit cards in the US market, the Diners Club Premier and Diners Club Elite. Here are their key features:

Diners Club Premier

  • Earn 1 point per dollar spent on all purchases.
  • Access to the Diners Club Airport lounges.
  • Primary rental car collision damage waiver policy.
  • No foreign transaction fees and equipped with an EMV smart chip.
  • $100 annual fee for the primary card.
  • $35 annual fee for additional cards.

Diners Club Elite

  • Earn 3 points per dollar spent at gas stations, grocery stores, and drug stores.
  • Earn 1 point per dollar spent on all other purchases.
  • Access to the Diners Club Airport lounges.
  • Primary rental car collision damage waiver policy.
  • No foreign transaction fees and equipped with an EMV smart chip.
  • Personal Assistant service.
  • $300 annual fee for the primary card.
  • $150 annual fee for additional cards.

What you can do with Diners Club Rewards points

British Airways launched a new price hold option for $10.
Diners Club Rewards transfer to British Airways at 1:1.

Airline mileage transfers
Diners Club Rewards points transfer to the following 14 airlines at a 1:1 ratio in increments of 1,000, except as noted:

Star Alliance

  • Air Canada
  • Eva Airways of Taiwan
  • SAS of Scandinavia
  • South African Airways
  • Thai Airways

SkyTeam

  • Delta Air Lines
  • Korean Air

OneWorld

  • British Airways Avios

Independent

  • Alaska Airlines
  • El Al Airlines of Israel (1,000:20)
  • Frontier Airlines
  • Hawaiian Airlines
  • Iceland Air
  • Southwest Airlines (1,500:1,200)
  • Virgin Atlantic
You can transfer Ultimate Rewards to airline and hotel partners, including Hyatt.
Diners Club Rewards transfer to 7 different hotel partners, including Hyatt.

Hotel point transfers
Diners Club Rewards transfer to the following hotel programs, each at a different ratio:

  • Best Western (1,250:3,300)
  • Choice (1,250:2,400)
  • Hilton (1,250:2,000)
  • Hyatt (1,250:750)
  • Priority Club/Intercontinental Hotel Group (1,250:1,500)
  • Marriott (1,250:1,500)
  • Starwood Preferred Guest (1,250:750).

Amtrak Guest Rewards is also a transfer partner at a 1:1 ratio.

The Diners Club cards come with complimentary access to over 500 airport lounges.

Opportunities with Diners Club Rewards

1. Cheap airport lounge access. The Diners Club Premier card is the least expensive card that offers unlimited airport lounge access. The Diners Club Lounges are mostly independent of airlines. In fact, this program is similar to and contains many of the same lounges as the Priority Pass, Lounge Club, and Airport Angel networks. Primary and additional cardholders receive free unlimited access, but guests must pay a fee of typically $25-$30 each. The network is relatively small in the United States – I count 19 lounges in 14 airports – but includes about 450 lounges in 101 other countries around the world.

2. Access to SAS, South African, and Icelandair miles. These three airlines are unique to this flexible points transfer program, and do not offer a co-branded credit card in the United States. A quick view of their award charts reveals the following options:

  • South African Voyager – I couldn’t find much value on the South African Airlines award chart compared to fellow Star Alliance partner United. However, South African likely offers more award space to members of its own program that it does to those of its partners. This program also partners with US Airways, and you can find some values there. For example, round-trip flights to South America are 40,000 miles in economy and 80,000 miles in business, compared to 60,000 and 100,000 at the low mileage level on the US Airways award chart.
  • IcelandAir. Award flights on this carrier can only be booked with miles from their Saga frequent flier program, as IcelandAir no longer partners with any other carriers or issues a credit card in the United States. So if you want to fly non-stop to Iceland from North America, this is your only choice other than Delta’s seasonal service from New York. That said, their award chart is only attractive for economy awards. Round-trip flights from North America in economy class run between 50,000 and 70,000 points depending on where you’re departing from, but are only 10,000 – 14,000 miles more if you continue on to Europe. This isn’t bad considering that Delta awards are scarce and are priced at the same rate as flights to the rest of Europe. It’s even better when you consider that awards for children aged 0-2 can be booked for 10% of the points, and children aged 2-15 years need only half the points. Unfortunately, their premium economy awards cost twice as much as economy, and their Saga class (which is more like domestic first class in the United States) is triple. 
  • SAS. This Star Alliance carrier’s award chart is reasonable, if not an exceptional bargain. From North America, Star Alliance award flights to Europe in business class are 110,000 miles, but business class awards to South America are only 75,000 miles. That compares favorably to United. which charges 110,000 miles for awards to southern South America.

3. Triple points at gas stations, grocery stores, and drug stores. Those who spend heavily in these categories may find the Diners Club Elite card lucrative. There are other cards (like the Blue Cash Preferred Card from American Express or Penfed Platinum Rewards Visa) that earn more in one category or another, but bonus categories on those cards are sometimes capped, and the overall return depends on how you value the points. For example, if you spend $1,500 each month at grocery stores, you’d max out the 6% return on Blue Cash Preferred after only 4 months, and then earn just 1% the rest of the year (for a net annual return of $480, or around 2.7%). By contrast, you’d earn 3 points per dollar all year with the Diners Club Elite card (for a total of 54,000 points).  If you conservatively value Club Rewards points at 1.5 cents apiece (less than TPG’s latest valuation for Citi ThankYou points), then you’d be getting a return of $810, or 4.5%. Even after factoring in the $300 annual fee, you come out ahead with the Diners Club Elite.

4. Conversion to Starpoints. Since Starwood Preferred Guest is one of the seven hotel programs that cardholders can transfer points to, it opens up a tremendous additional range of options. The transfer ratio is just 1,250 Diners Club Rewards points to 750 Starpoints, which works out to 0.6 Starpoints per Diners Club point. When you figure in Starwood’s 5,000 point bonus for transferring 20,000 points to miles, it works out to 0.75 miles per Diners Club point. While this seems like poor value at first, it becomes intriguing when you again factor in the Diners Club Elite spending bonus at gas stations, grocery stores, and drug stores. On those purchases you’re effectively earning 1.8 Starpoints per dollar, which works out to 2.25 miles per dollar when transferring Starpoints to miles in increments of 20,000. That’s a better earning rate than you’ll get with most airline co-branded cards, and much better than you’ll get with the Starwood Preferred Guest Credit Card from American Express on non-Starwood purchases. Again, you have to factor in the annual fee, but transferability to SPG opens up a lot of possibilities for Club Rewards points.

With a favorable transfer ratio, Diners Club points can be put to good use at Choice Hotels.
With a favorable transfer ratio, Diners Club points can be put to good use at Choice Hotels.

5. Conversions to Choice and Best Western hotels. These budget hotel chains can offer awards at upscale properties at fantastic value in Europe and elsewhere. For example, my family booked a large room at the Comfort Inn Bolivar in Rome for 10,000 Choice points per night. At the 1,250:2,400 ratio, I could have redeemed just 6,250 Diners Club points for 12,000 Choice points, which is pretty good for a room that sleeps four and costs $450 a night. Best Western also offers some excellent properties outside the United States for relatively low rates, and the transfer ratio of 1,250:3,300 works out to 2.64 Best Western points for each Diners Club point.

6. 30% Hawaiian Miles transfer bonus. Through October 31, 2014, cardholders can transfer points to Hawaiian Miles and receive a 30% transfer bonus. While there isn’t much time for new cardholders to utilize this offer, it’s an indication that other transfer bonuses may be offered in the future.

7. Earning The Southwest Companion Pass. Southwest is a transfer partner of both Diners Club and Chase Ultimate Rewards. While points transferred from Chase to Southwest do not qualify toward earning the Southwest Companion Pass, I have read several reports that Diners Club points transferred to Southwest do qualify. Your mileage may vary, but at a 5:4 transfer ratio, this could be a good strategy for earning one of the most covered travel awards.

Analysis

It’s always better for consumers to have more competition, so I welcome Diners Club as the fifth major flexible point transfer program. The Diners Club Premier card is a bargain for those who value its inexpensive lounge access (like travelers based at an airport that’s part of this program) and others who need a go-to card for international travel. The Diners Club Elite card is attractive to those who can max out its 3x bonus categories. While I would like to see a sign-up bonus offered for these cards, or perhaps the first year’s annual fee being waived, it’s nice to know that they’re offered by BMO Harris Bank rather than another major card issuer. It will be interesting to see how these new cards compete in the large market for travel rewards.

Starwood Preferred Guest® Credit Card from American Express

Apply Now
  • Earn 25,000 bonus Starpoints® after you use your new Card to make $3,000 in purchases within the first 3 months.
  • Earn 2 Starpoints® for each dollar of eligible purchases spent on the Card at participating SPG® & Marriott Rewards® hotels. Earn 1 Starpoint for all other purchases.
  • No Foreign Transaction Fees on International purchases.
  • Receive free in-room, premium internet access. Booking requirements apply.
  • Redeem Starpoints® at over 1,300 participating hotels and resorts in over 100 countries and for flights on more than 150 airlines with SPG flights, all with no blackout dates.
  • $0 introductory annual fee for the first year, then $95.
  • Terms and Conditions apply.
  • See Rates & Fees
Intro APR Regular APR Annual Fee Foreign Transaction Fee Credit Rating
N/A 15.49%-19.49% Variable $0 introductory annual fee for the first year, then $95. 0% Excellent Credit