Redeeming Chase Ultimate Rewards Points for Maximum Value

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I value Chase Ultimate Rewards at 2.1 cents apiece, and I can get much more than that when I redeem for high-end hotels and premium award flights. However, I routinely get emails from readers who aren’t sure how to maximize their points, so today, TPG Contributor Richard Kerr offers examples of some of the best redemption options.

In TPG’s latest monthly valuations, Chase Ultimate Rewards are considered among the most valuable loyalty points out there, and for good reason. The program offers diverse transfer partners, cash back options, and the ability to book travel through the Ultimate Rewards Travel Portal, making it easy to find worthwhile redemptions. Three different credit card options with attractive perks, benefits, and category spending bonuses also make Ultimate Rewards points easy to come by. In this post, I’ll illustrate some prime examples of how you can get good (and bad) value when you redeem Ultimate Rewards.

Earning Ultimate Rewards

Chase Ultimate Rewards (UR) points are earned with the following credit cards:

Chase Sapphire Preferred Card — This card offers 2x points on all travel and dining purchases, and has no foreign transaction fees. You get a multitude of travel perks like delayed baggage insurance, trip interruption/cancellation insurance, primary CDW car rental insurance, and Chip and Signature technology. To top it all off, I love Chase’s customer service; it’s very easy to reach an agent (instead of going through a long phone menu) when I call the number on the back of my card. I use this card for my everyday spending. There’s currently a sign-up bonus of 50,000 points after you spend $4,000 in the first 3 months.

Ink Plus Business Card — This card earns 5x points on the first $50,000 spent in combined purchases at office supply stores and on cellular, landline, internet and cable TV services each year. You also earn 2x points on the first $50,000 spent in combined purchases at gas stations and hotel stays booked directly with the hotel. The current sign-up bonus is 60,000 points after you spend $5,000 in the first 3 months.

Chase Freedom — The Freedom card is advertised as a cash back card, but it earns Ultimate Rewards points. You can redeem points for cash back at 1 cent apiece, or you can use them like other Ultimate Rewards points if you also have the Ink Plus or Sapphire Preferred.

My first use of Ultimate Rewards was transferring to United and flying to Bali in business class. Photo courtesy of Shutterstock.
My first use of Ultimate Rewards was transferring my points to United and flying to Bali in business class. Photo courtesy of Shutterstock.

If you have 2 or 3 of the above cards, you can combine your points into a single account on the Ultimate Rewards website. If your spouse or domestic partner is also a cardholder, you can also combine your points. (Note that Chase has added new restrictions on transfers of Ultimate Rewards points, and has been warning those who transfer to people outside of their household; I recommend sticking to the rules.)

Redeeming Ultimate Rewards

You have three options for redeeming points:

  1. Cash Back — earn credit on your statement at a flat rate of 1 cent per point.
  2. Ultimate Rewards Travel Redemptions — Book travel through the Ultimate Rewards Travel Center and redeem points to pay for your plane tickets, hotel stays, rental cars, or experiences. As a Sapphire Preferred or Ink Plus cardholder, you’ll get a 20% discount when paying with points, so each point is worth 1.25 cents (e.g., a $100 hotel room would only cost 8,000 points).
  3. Transfer to Travel Partners — You can transfer Ultimate Rewards to 6 airline programs (United, Southwest, British Airways, Korean Air, Singapore, and Virgin Atlantic), and 4 hotel programs (Hyatt, Marriott, Ritz-Carlton, and IHG). All transfer ratios are 1:1, and you must transfer in 1,000 point increments.

The first two redemption options are pretty straightforward. I’d almost never recommend redeeming for cash back, but the Ultimate Rewards Travel Center can be worthwhile if you’re booking a very cheap flight or hotel room, or if you’re redeeming to cover miscellaneous travel expenses. You might also consider this option if you have only a handful of Ultimate Rewards points left, since Chase lets you redeem partially (with the 20% bonus) and cover the balance with cash. Generally I’d rather redeem miles from a card like the Barclaycard Arrival Plus to cover those costs, and save my Ultimate Rewards for some of the more lucrative options below, but you could do worse.

The transfer partners are where the Ultimate Rewards program really shines. To help you get a sense of the value you should hope to get from your points, I’ll look at examples of both good and bad redemptions. This isn’t meant to be a comprehensive evaluation of every transfer option; I just want to demonstrate how a little strategic planning can help you maximize your award travel. Let’s look at transfers to 7 different partners: 4 airlines, and  2 hotels.

1. United Airlines MileagePlus

Good Redemption — I often utilize United’s  stopover and open jaw rules to visit multiple destinations in one trip (for no additional miles). The United MileagePlus award chart offers round-trip flights in economy from the US to Europe (like Newark to Frankfurt) for 60,000 miles. By adding stopovers and open jaws, I could depart from Newark and see Frankfurt, Istanbul, and London, and return to Newark on a single trip for the same cost of 60,000 miles. That same itinerary could cost over $3,000 (as shown below), which gives me a redemption value of around 5 cents per mile.

Learn United's stopover and open jaw rules to see multiple destinations for no extra miles.
Learn United’s stopover and open jaw rules to see multiple destinations at no additional cost.

Bad Redemption — With United’s separate award chart for partner airlines, premium awards on Star Alliance and other United partners are now too costly. A one-way business award to Europe on a partner airline will cost you 70,000 miles, and a one-way first class award would cost a massive 110,000 miles. As I’ll discuss in a moment, there are better ways to use Chase Ultimate Rewards points if you want to fly in business class to Europe.

2. British Airways Executive Club

Good Redemption — You can redeem 4,500 Avios for free economy flights on routes that are less than 650 miles. I have flown out of Haneda Airport in Tokyo on Oneworld partner Japan Airlines almost 15 times since moving to Japan. Japan Airlines domestic flights routinely cost $300-$600, but I can redeem 9,000 Avios and $2 for free round-trip flights anywhere in Honshu and Hokkaido. That’s a redemption value of at least 3.3 cents per point, and sometimes as high as 6.6 cents.

In the US, you can similarly save yourself 11,000 Ultimate Rewards points by redeeming Avios for short-haul round-trip flights on American and US Airways. (United would charge 20,000 miles for the same routes.)

I can fly the popular Tokyo-Sapporo route in peak ski season for only 4,500 avios and $2.
I can fly the popular Tokyo-Sapporo route in peak ski season for only 4,500 avios and $2 each way.

Bad Redemption — Almost anytime you redeem Avios on long-haul flights, you’re going to be hit with steep fuel surcharges, which can destroy whatever savings you get by booking an award in the first place. To avoid fuel surcharges, look for flights on American Airlines and Iberia on long-haul routes.

British Airways also recently announced an upcoming devaluation that will dramatically increase the cost of premium awards beginning on April 28, 2015. Unfortunately, those awards will be prohibitively expensive moving forward, but economy awards will continue to offer excellent value.

Flying British Airways with Avios usually entails steep fuel surcharges.
Flying British Airways with Avios usually entails steep fuel surcharges.

3. Singapore KrisFlyer

Good Redemption — You can redeem 57,500 miles to fly New York to Frankfurt, or 51,000 miles to fly Singapore to Tokyo in Singapore’s A380 suites. I flew Singapore to Narita this past January, and 51,000 Chase Ultimate Rewards points was a heck of a deal for that experience. Even as a member of Star Alliance, Singapore doesn’t generally release its first class space to partner airlines, and even if those awards were available, Singapore offers a 15% discount to Krisflyer members who book directly through the program.

Booking KrisFlyer awards online gets you a 15% discount, meaning SIN-NRT in an A380 Suite will only cost 51,000 miles.

Bad Redemption — KrisFlyer’s partner award chart isn’t very attractive to US flyers for many long-haul flights. North America to Japan will cost you 175,000 miles round-trip in business class, and Europe will cost you a more reasonable (but still beatable) 130,000 miles round-trip in business. Singapore also levies some heavy fuel surcharges on award flights, but did recently announce plans to lower them in response to the plummeting world oil market.

4. Korean Air SKYPASS

Good Redemption — With the return of Korean Air SKYPASS as a Chase transfer partner, I though it’d be good to show you a great value option. Korean charges only 80,000 miles to fly from North America to Europe round-trip in Business on SkyTeam partners. Just yesterday I booked a round-trip, business class San Francisco-Paris-Zurich award Air France for 80,000 Ultimate Rewards points. Those flights could easily cost $6,000 or more, so I feel confident that I got at least 7 cents per point in value.

Bad Redemption — Be sure you avoid peak season, which can cost you thousands (up to 6 digits) of extra miles on an award ticket.

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The Hyatt Gold Passport program offers great value to go with impressive properties like the Park Hyatt Dubai.

5. Hyatt Gold Passport

Good Redemption — Hyatt is perhaps my favorite use of Ultimate Rewards points. I find fantastic value in Hyatt’s reasonable award chart, and even more value in Hyatt’s Cash + Points redemptions. Last week I redeemed 30,000 Hyatt points and $375 for 3 nights at the Park Hyatt Dubai. The daily rate was $453 per night, and after taxes and fees, my 3 nights would have cost $1,579.68. Subtracting the $375 I spent for Cash + Points, I got a strong redemption value of just over 4 cents per point. (I also used a Diamond Suite Upgrade to really get a fantastic deal for 3 nights in a suite.)

Bad Redemption — Hyatt offers a Dining, Spa, and More option that essentially gives you coupons to redeem on hotel extras. The return is so poor (at best around 0.8 cents per point) that I would never recommend this over using your points for free or discounted hotel nights.

You should not redeem Hyatt points for dining or spa credit at these rates.
Don’t redeem Hyatt points for dining or spa credits.

6. Marriott Rewards

Good Redemption – The Hotel + Air redemption packages have really caught my eye, and I think they’re the most lucrative use of Marriott points. Starting at 200,000 points, you can get 7 nights in a category 1-5 property and receive 55,000 United miles (or 50,000 miles with many other airlines). My wife and I each got the Ritz-Carlton Rewards Credit Card and earned the sign-up bonus of 140,000 points (which can be combined with Marriott Rewards). I plan to use Chase Ultimate Rewards points to bump us up to the next category package and get a higher-tier hotel and more airline miles.

Marriott's RewardsPlus Air + Hotel package is very luring.
Marriott’s RewardsPlus Hotel + Air package is very alluring.

Bad Redemption — The Use Rewards option offers absolutely horrid value, as the merchandise is all hugely overpriced. Like most hotel loyalty programs, redeeming Marriott Rewards for anything other than free hotel nights isn’t very rewarding.

 

Bottom Line

Whether you’re transferring to travel partners or redeeming through the Chase Travel Center, there are plenty of ways to get fantastic value out of Ultimate Rewards points. Unfortunately, there are also plenty of ways to get terrible value. I hope this post has illustrated the possibilities, and that these examples will help you set a baseline for your own redemptions. Ultimate Rewards provides a wide range of options, and it’s on us to maximize them. For help with that, check out these posts:

What are some of your favorite Ultimate Rewards redemptions?

Chase Sapphire Preferred® Card

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  • Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $625 in travel when you redeem through Chase Ultimate Rewards®
  • Named a 'Best Credit Card' for Travel Rewards by MONEY Magazine
  • 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases
  • Sleek metal card design
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • $0 foreign transaction fees, plus chip-enabled for enhanced security and wider acceptance when used at a chip card reader
  • 1:1 point transfer to leading frequent travel programs at full value — that means 1,000 Chase Ultimate Rewards points equal 1,000 partner miles/points
  • Travel confidently with premium Travel Protection Benefits, including Trip Cancellation/Trip Interruption Insurance, Auto Rental Collision Damage Waiver, Trip Delay Reimbursement and more
Intro APR Regular APR Annual Fee Balance Transfer Credit Rating
N/A 16.24%-23.24% Variable Introductory Annual Fee of $0 the first year, then $95 See Terms Excellent Credit