Is a Transfer Bonus Worthwhile if I Don't Have Travel Plans?
TPG reader Adam emailed me to ask about transfer bonuses:
"I saw that Amex was offering a bonus for transfers to Virgin America. Should I take advantage of these bonuses even if I don't already have plans to travel?"
Amex Membership Rewards used to routinely offer transfer bonuses as high as 50% to British Airways, Delta and other airline partners. Those opportunities were lucrative enough that it often made sense to transfer points even if you had no immediate plans to use them. Unfortunately, Amex transfer bonuses have become less frequent over the last year or so, and the ones we've seen have been uninspiring (like the recent 25% bonus for transfers to Hawaiian Airlines).
The 50% transfer bonus to Virgin America that prompted Adam's question is no exception. Membership Rewards points normally transfer to the Elevate program at a ratio of 2:1, so with the 50% bonus you would instead get a ratio of 4:3 (that is, 150 Elevate points for every 200 Membership Rewards points transferred). Elevate points can be worth around 2.3 cents depending on how you redeem them, while I list Membership Rewards points at 1.9 cents in my latest monthly valuations. Using those numbers, you'd be coming out slightly behind on the transaction.
That means transferring with the bonus isn't a terrible idea, but it's also not a clear win. I wouldn't transfer points speculatively in this case, which brings me back to Adam's original question: Are there circumstances where you should transfer speculatively? The answer is yes — at least in theory. If you feel you're gaining significant value by transferring and you have a reasonable expectation that you'll put those transferred points to use somewhere down the line, then go for it. However, there are a few other factors to consider.
First, think about the opportunity cost of transferring. Sending your Membership Rewards points to Virgin America means they won't be available if you need to book with another airline later on. One of the reasons I value transferable points so highly is that they give you more opportunities to maximize value. Once you transfer, those opportunities are narrowed down dramatically. It would be a shame to miss out on a great premium award (like Lufthansa first class to Europe) because you already committed your points elsewhere.
Second, points and miles make a bad long-term investment because they tend to devalue over time. Transferable points can actually insulate you from the threat of devaluation, but you lose that protection once you send them to an individual program. Furthermore, transferable points generally have favorable expiration policies — for example, Membership Rewards points never expire so long as your card account remains open and in good standing. Expiration policies tend to be less friendly for airline and hotel programs, so transferring prematurely means you have to make sure your rewards stay active.
Finally, pay attention to the transfer ratio and not just the transfer bonus. Last fall, Amex offered a 50% transfer bonus to SPG, which sounds fantastic until you realize that the normal transfer ratio is just 3:1. You can use the TPG Travel Resources page to keep track of current transfer partners and ratios, and to check whether a bonus is as good as it sounds.
For more on transfers, discounted points, and Amex Membership Rewards, check out these posts:
- Redeeming Amex Membership Rewards for Maximum Value
- How Long Do American Express Membership Rewards Take to Transfer?
- Should I Buy Points and Miles During Discount Promotions?
If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.
[card card-name='Chase Sapphire Preferred® Card' card-id='221210132' type='javascript' bullet-id='1']
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.