Update: Chase Ending Ultimate Rewards Points Purchases in November
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On Wednesday, I reported on the fact that Chase pulled the option to purchase points online at the end of July. When I called Chase, they told me that though the online option was gone, you could still purchase points over the phone at the same rate of 2.5 cents per point in increments of 1,000 points up to 5,000 points per calendar month.
I wanted to look into it further, though, and after contacting reps at Chase, I found out that the option to purchase points altogether will be going away on November 17, 2013.
In general, I don’t buy too many points or miles because they’re often sold at a premium and it usually only makes sense to top up your account if you’re a few points shy of a specific, imminent redemption.
However, Chase Ultimate Rewards points are something to consider because they cost 2.5 cents each and you can transfer them to any of Ultimate Rewards’ transfer partners: British Airways, Korean Air, Southwest, United, Virgin Atlantic, Hyatt, Marriott, Priority Club/IHG Rewards, Ritz-Carlton and Amtrak.
While 2.5 cents per point is much more than you’d get in value by transferring Ultimate Rewards points to Southwest and redeeming for Wanna Get Away fares whose per-point value is fixed around 1.8 cents, it might make sense for United or Hyatt redemptions – my two favorite UR transfer partners – where the values you get from your award redemptions can be well beyond that.
In terms of Hyatt specifically, you might be better off just purchasing points directly from the chain since they only charge 2.4 cents apiece, but there’s an annual limit of 40,000 points and you lose the flexibility of being able to transfer them like you can with Ultimate Rewards points.
Maximizing What Time Is Left
Since it’s already August, that means there are just 4 months left to max out the 5,000 monthly limit on purchased points. That max is per account, not customer, so if you have, say both the Sapphire Preferred and Ink Bold, you can purchase up to 5,000 points on each card for 10,000 total per month.
But let’s just say you have one account – that means you can buy up to 20,000 points total if you want to take advantage of this element of the program for a total of $500.
20,000 Ultimate Rewards points is enough (or almost) for a few different redemptions, so I thought I’d take a look at a couple quick scenarios to see where this might be worth it.
British Airways Avios
Thanks to BA’s distance-based awards, 20,000 Avios is enough for a few different kinds of awards that could make purchasing points more than worth it.
The first comes to mind because I happen to be in Ireland this week. 20,000 Avios will get you a one-way economy award ticket from New York JFK to Dublin on Aer Lingus, and there is usually great award availability on that route. A roundtrip ticket later this month is running between $1,100-1,820, so depending on when you redeem, you can more than make up for the $500 to purchase those points, but at the lower end of the spectrum, you’re barely breaking even.
However, another good Avios redemption idea are those expensive short-hauls on American such as my favorite from New York to Montreal. A roundtrip economy award ticket over Labor Day weekend would cost you 9,000 Avios and $56.
That same ticket would cost you $431.
So you’d be buying 9,000 Ultimate Rewards points for $225 but getting $375 in value, saving $150.
United usually charges you 3.5 cents per mile plus a 7.5% tax plus a $30 processing fee, meaning the cheapest you’re getting miles for is about 3.8 cents each, so purchasing Ultimate Rewards points is a bargain by comparison, though still something to think over carefully.
One situation in which it might make sense to buy all 20,000 miles is if you have an expensive intra-European redemption. For example, let’s say you were on a cruise of the Baltic that ended in Copenhagen, but you wanted to pop down to Paris for the weekend, or to fly out of there. 20,000 United miles plus $30 in taxes and fees would get you a one-way business class ticket on SAS from CPH to CDG like these flights.
Tickets for those same flights, however, are going for $814, so by spending $500, you’re saving over $300.
This is just an example, but even economy flights within Europe can get extremely expensive if you’re hopping around from one destination to the next and not planning on taking many roundtrips.
Hyatt points are some of the most valuable out there since you can make some really high-value redemptions at their top-tier properties. That doesn’t always mean it makes sense to buy points for them, but it can sometimes.
Let’s say you bought 18,000 Ultimate Rewards points to transfer to Hyatt for a total of $450. You could redeem those for a Category 5 property like the new Andaz Prinsengracht in Amsterdam later this month. That same room would cost 350 EUR or $468, so you’re pretty much breaking even here.
However, let’s say you had a couple thousand points floating around and bought the full 20,000 to transfer to your Hyatt account for a Category 6 redemption like an award night at one of my all-time favorite hotels, the Park Hyatt Paris Vendome.
This night in October is going for either 22,000 points or 780 EUR, about $1,040 – so you’re getting nearly double the value back on the points you got.
Granted, this is an extreme example but it shows you what’s possible. Although there are some great values to be had by transferring Ultimate Rewards points to the program’s travel partners and redeeming them for expensive awards, as with any opportunity to buy points, always do the math for yourself based on the redemptions you are likely to make and be sure that you are getting enough value from the purchase to justify it.
Although I don’t really purchase Ultimate Rewards points myself since there are easier, cheaper and more lucrative ways to rack up Ultimate Rewards points thanks to the various cards’ category spending bonuses and strategies like buying Vanilla Reloads, I am disappointed to see this feature going away since it takes away one more bit of flexibility in earning and using Ultimate Rewards points.
For more information, check out these posts:
Why I Love Chase Ultimate Rewards WELCOME OFFER: 60,000 Points TPG'S BONUS VALUATION*: $1,200 CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners *Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.