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Update: Some offers mentioned below are no longer available. View the current offers here – The Amex EveryDay Credit Card from American Express, The Amex EveryDay Preferred Card from American Express
Today TPG Contributor Jason Steele looks at the strengths and weaknesses of the prominent transferable points programs to help readers strategize when deciding where to bank their points and miles.
Last month, Citi’s ThankYou Rewards became the fourth major transferable points program, joining Chase Ultimate Rewards (UR), American Express Membership Rewards (MR), and the Starwood Preferred Guest Program (SPG). This was exciting news to all award travel enthusiasts, as these transferable points programs allow cardholders to earn points now, and decide where to use them later. By doing so, travelers can stay one step ahead of airlines that are constantly changing their mileage redemption charts and award seat availability.
Apart from ThankYou Rewards, the three older programs have been making changes and adding new transfer partner options over the last few years, so now seemed like the ideal time to reassess the strengths and weakness of each program. I’ve been a member of all of these programs for many years, and my criteria for judging them includes the quality of their transfer partners, the ease of earning points, and other factors such as transfer times, bonuses, and the ability to share points with others.
Chase Ultimate Rewards
Quality of transfer partners
This program currently features 11 different partners, including six airlines, four hotels, and Amtrak Guest Rewards.
Airlines. While Ultimate Rewards offers the fewest airline partners of the four programs, one could make the argument that it actually has the best selection.
For example, it features Southwest Airlines, which currently boasts more domestic passengers than any other carrier. It is also the only program that offers transfers to United at a 1:1 ratio (Starwood offers transfers at a very unfavorable 2:1 ratio). Since United is the only Star Alliance transfer partner among these four programs that does not impose fuel surcharges, that’s a pretty strong advantage.
Hotels. Among its four hotel partners, the Hyatt Gold Passport program is the real standout, as it is has the most valuable points, and is the only one of the four that offers award nights with no blackout dates or capacity controls. Marriott and Ritz-Carlton are essentially the same program, and like IHG Rewards Club, its points are usually worth just a fraction of Hyatt’s. Nevertheless, it’s nice to have those options, if only to take advantage of the occasional highly discounted award night offers or to quickly top off an account in order to book an award.
Other transfer options. This program allows transfers to the Amtrak Guest Rewards program, which offers 3-4 cents in value and has no capacity controls other than a few blackout dates. In addition, those who have a Chase card that’s eligible to transfer Ultimate Rewards points can redeem them through the Ultimate Rewards Travel Center for 1.25 cents each towards travel reservations, including flights, hotels, rental cars, cruises, and activities.
Ease of earning points
Chase currently offers seven cards than earn Ultimate Rewards points. The Chase Sapphire Preferred, Ink Bold, Ink Plus, and Palladium cards allow you to transfer Ultimate Rewards points to participating travel partners. The Chase Freedom, standard Sapphire, and Ink Cash cards can earn Ultimate Rewards points, but are not eligible for transfers unless you also hold one of the eligible cards.
There are many opportunities to earn more than one point per dollar. For example, the Sapphire cards offer double points at restaurants, and Sapphire Preferred also earns double points on travel. Freedom offers 5x at select categories of merchants each quarter (on up to $1,500 eligible spending), and the Ink cards offer 5x at office supply stores and on telephone, television, and Internet service purchases.
Finally, Chase offers its Ultimate Rewards Mall, which allows members to earn points on purchases by using the Chase portal.
One of best features of this program is that most transfers occur instantly. In fact, I regularly stun United and Hyatt telephone reps who confirm award availability, but sternly notify me that I have no points in my account with which to book my award. I then execute the transfer, and they are astonished to find my account is suddenly filled with the exact number of points needed, as if by magic. The exceptions are transfers to Singapore, Marriott/Ritz-Carlton, and IHG, which have been known to take a day or two.
This feature is crucial to booking an award with short notice, or securing scarce award seats with airlines that don’t offer award holds.
I also like the ability of members to transfer points between spouses, domestic partners, and other household members. The Chase Ink business cards also permit transfers between employees. These transfers are free and instant, but Chase has cracked down on those who make transfers to other third parties.
Chase offers just a single transfer partner in the Oneworld and Skyteam alliances, and just two Star Alliance members, which limits your ability to hedge against devaluations. In addition, Chase hasn’t ever offered bonuses for transfers like the American Express Membership Rewards program frequently does.
American Express Membership Rewards:
Airlines. Membership Rewards currently features 17 different airline partners, but most are available from the other transfer programs. The transfer partners that are unique to this program are Jetblue, Frontier, and El Al. Iberia is technically unique, but you can freely transfer points back and forth between Iberia and British Airways. Unfortunately Jetblue points aren’t worth much (except on their new Mint business class, which has limited routing), Frontier charges for carry-on bags and will soon add an award redemption fee, and El Al award seats are rare and hard to search for.
Hotels. This program offers four different hotel transfer partners: Best Western Rewards, Choice Privileges, Hilton HHonors, and Starwood. Choice points transfer at a 1:1 ratio, and can be very valuable, especially in Europe. Best Western transfers at a 1:1 ratio and is another American budget brand that has many attractive properties overseas. The Hilton HHonors program is far less valuable than it once was, but at least transfers occur at a helpful ratio of 1:1.5, so Hilton can be an interesting transfer option when combined with other award discounts. Unfortunately, the Starwood transfer option is practically useless with its 3:1 transfer ratio – 1,000 MR points only returns a pitiful 333 Starpoints.
Other transfer options. The Membership Rewards program offers access to Amtrak as gift cards only, which (like most gift cards) is a poor option at one cent per point. Otherwise, cardholders can only use points to pay for travel, merchandise, gift cards, and other options at a rate of about one cent per point or less.
Ease of earning points
Amex currently offers about a dozen different cards that earn Membership Rewards points (depending on how you count them), ranging from the no-fee American Express Everyday card to The Platinum Card from American Express. In fact, the Everyday card is the only no-fee card of any program that features point transfers. Points earned from cards that don’t allow point transfers by themselves can be transferred once you acquire a card that does permit transfers. In addition, several of these offers bonuses, such as the Everyday Preferred, which offers 3x points at supermarkets, 2x points at gas stations, and 50% bonus points when you use your card at least 30 times during a billing cycle.
11 of the transfer partners are known to have instant transfer times. Virgin Atlantic Singapore, Iberia, Cathay Pacific Asia Miles, ANA, and Aeromexico can take a day or longer. This program regularly features bonuses for transfers, such as the current 25% JetBlue bonus offer available through September 15th.
Cardholders are no longer able to transfer points to each other, even between spouses. Also, this is the only program that charges an “excise tax offset fee” on transfers to U.S. airlines. This is not a tax, but rather a fee that Amex chooses to impose, supposedly to offset the cost of its own taxes. The fee is $0.0006 per point (with a maximum fee of $99). This would equal $60 on a transfer of 100,000 miles.
Starwood Preferred Guest Program
Airlines. This program currently offers 32 different airline transfers partners, including several unique ones such as American, US Airways, JAL, LAN, and Alaska.
Hotels. Starwood is not a credit card issuer itself, but a hotel program. Starwood includes properties such as Westin, Sheraton, Aloft, and several other boutique brands, although it is one of the smaller hotel networks with just under 1,200 properties around the world. Nevertheless, Starwood points are quite valuable, especially at the mid-range hotels that populate the lower tiers of its award chart.
Other transfer options. Transfers to Amtrak Guest rewards are an option, although the 5,000 point transfer bonus only applies to airlines.
Ease of earning points
You can earn Starpoints with either the Starwood Preferred Guest Credit Card from American Express or the Starwood Preferred Guest Business Credit Card from American Express, which only features more than one point per dollar spent when spending at a Starwood property. Cardholders get two points per dollar for their spending at Starwood properties, and Gold and Platinum elites get another three points per dollar (two for non-elite members). Notably, members receive a 5,000 point bonus when they transfer 20,000 points at once, so the effective rate of return on all non-hotel purchases is 1.25 miles per dollar spent.
Starwood points can be transferred for free between members of the same household, and there are a variety of other options to use points that can be valuable to some people. Since Starwood is not a credit card program, you can keep your points regardless of whether you continuously hold an eligible credit card account.
The Achilles heel of this program is the transfer times, which are never instantaneous, and can take as long as several days. Thankfully, American and US Airways both allow award holds that limit the risk of losing award space while waiting for a transfer to be completed.
Another big issue is that you can only transfer 79,999 points per day, effectively limiting you to transferring 60,000 points per day while still receiving the 5,000 point bonus for every 20,000 points. For larger awards, this added delay can increase the chances that award space will disappear before the transfer is complete.
Citi ThankYou Rewards
Airlines. This program began with eight airline transfer partners; however, none of them are based in the United States, and two of them don’t even offer service to North America. In fact, in my recent look at Maximizing Citi ThankYou Rewards Unique Transfer Partners, only Singapore and Cathay Pacific Asia miles showed the potential for any real value for residents of North America, and Singapore is the only airline that is a member of all four of these transferable programs. However, there is widespread speculation that American will eventually become a transfer partner, since Citi already issues several co-branded American Airlines AAdvantage cards.
Hotels. Citi only offers transfers to hotel points through the Hilton HHonors program at a rate of 1:1.5 (1,000 ThankYou points = 1,500 Hilton HHonors points). This transfer ratio is the same one offered by American Express Membership Rewards.
Other transfer options. Citi ThankYou Premier cardholders can redeem points for airfare at a rate of 1.25 cents per point, while ThankYou Prestige cardholders will see their points worth 1.33 cents towards airfare with most carriers, and 1.6 cents towards flights with American and US Airways.
Ease of earning points
Citi ThankYou Premier Card, Citi Prestige, and (no longer available) Citi Chairman cardmembers can transfer points to other programs, although points earned from other cards can be transferred if an eligible card account is also open. In addition, those who hold an eligible consumer or business checking account can also earn ThankYou points. Some of these cards offer multiple points per dollar spent, and in the past there have been some valuable promotional offers, but only for a limited time.
There was not a lot of value to ThankYou Rewards before the program introduced the airline transfer feature, and points were generally worth a maximum of one point each towards gift cards, travel reservations, or loan repayments. One unique benefit is that members are free to transfer their points to any other ThankYou Rewardsaccount, in any quantity. These transfers are free and occur instantly. That makes it easier to pool points for award redemption.
Citi’s terms indicate that it can take up to 14 days to transfer points, but early reports show transfer times to Singapore and Cathay Pacific Asia Miles in the one to two day range.
Each program has strengths and weaknesses. As TPG often says, diversifying your loyalty currencies is generally a good idea, so I don’t feel compelled to pick a winner or rank these programs. That said, SPG does seem to offer the most value (by a slim margin), while ThankYou Rewards still has catching up to do before it can be considered on truly equal footing with the other three, but your strategy for earning points and miles will depend on how you plan to spend them.
Which program (or programs) do you prefer, and what do you see as the strengths and weaknesses of each? Please share your thoughts and questions in the comments below!
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards