5 devaluation-proof rewards I'm stocking up on in 2021
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To say that 2020 didn't go quite as we'd all planned for any of us is an understatement. The travel industry took a huge hit which has resulted in a lot of customer-friendly moves. I'm very much a realist so in thinking ahead, I can't help but wonder how long these positive changes will last. While we're all benefiting from status extensions and generating tons of rewards thanks to mileage sales and category bonuses, there are bound to be negative consequences down the line.
With several programs ripe for devaluation, I'm protecting myself by diversifying my points portfolio. I'm largely focusing on transferrable rewards, in addition to two programs that I think are unlikely to introduce major changes. Here are the five rewards currencies I'm stocking up on in 2021.
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Citi ThankYou points
Citi ThankYou points have become my favorite rewards currency, largely due to how easy they are to earn and an impressive lineup of transfer partners. Citi has really stepped up in the last year with temporary category bonuses on the Citi Prestige® Card and the introduction of some really useful, permanent 3x bonus categories for the Citi Premier® Card.
The information for the Citi Prestige has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
All of these factors are why I’ll continue to stock up on Citi ThankYou points in 2021. With over a dozen transfer partners, the currency is well protected against devaluations. If Flying Blue starts charging sky-high prices and doing away with their Promo Rewards, I can transfer my ThankYou points to Turkish Miles & Smiles, Etihad Guest or Avianca LifeMiles for amazing deals on domestic and international awards. And if all partners devalue at once in an unlikely Black Tuesday scenario? Then I can still get 1 cent per point by redeeming them for a statement credit.
Capital One Miles
If you’d asked me about Capital One miles two years ago, I would have scoffed. “The Capital One Venture Rewards Credit Card is a glorified 2% cash-back card. Why would I pay $95 if I can use the Fidelity Rewards Visa fee-free?” More importantly, I didn’t think it was worthwhile to incur three credit pulls for one sign-up bonus.
Well, things have changed. Capital One miles have become incredibly valuable thanks to the introduction of 15 transfer partners and the occasional elevated welcome bonus (currently unavailable). The transfer ratios don’t sound ideal at 2:1.5 or less but work out favorably when you consider that you earn Capital One miles at 2 per $1 through the Venture Card. That’s equivalent to earning 1.5 airline miles per $1 on all spending -- that's higher than the 1 mile you’ll earn on most airline credit cards.
Since TPG values Capital One miles at 1.4 cents each, it often makes more sense to transfer these rewards to airlines instead of your more precious Chase Ultimate Rewards or Amex Membership Rewards, which are valued at 2 cents each. There will be times when you’ll want to redeem airline miles at less than a two-cent value. In those scenarios, Capital One miles are the better transfer option.
Another scenario where these miles will be useful? When airfare and hotel rates are so cheap that award redemptions don’t make sense. That's pretty common nowadays, with low travel demand leading to some fantastic deals. The flexibility of these rewards is why I’ll be earning lots of them in 2021.
American Express Membership Rewards
It’s no secret we love American Express Membership Rewards around here. The O.G. rewards currency transfers to popular programs like Delta SkyMiles and Aeroplan at a 1:1 ratio. It also offers valuable partnerships like ANA MileageClub, which happens to have one of the lowest redemption rates for premium-cabin flights to Europe and Asia. Hopefully, that doesn’t change in 2021, but there are 18 other airlines to choose from if it does.
American Express Membership Rewards also run occasional transfer bonuses, while competitor Chase has only run three since 2019. That’s why American Express Membership Rewards will continue to be a huge part of my points and miles strategy in 2021 and beyond.
World of Hyatt points
Hyatt has made some customer-friendly moves during the pandemic, especially its decision to delay peak award pricing and forego annual category changes on all but 16 hotels. So we know exactly what to expect with World of Hyatt next year and unless they make some unannounced last-minute changes due to a major increase in travel demand (which is unlikely to happen), Hyatt points will retain their value throughout 2021.
In the meantime, Hyatt has also introduced lower elite status requirements and 15%-25% award redemption rebates through Feb. 28, 2021. With the ability to earn elite qualifying nights through the World of Hyatt Credit Card, stocking up on Hyatt points via credit card spending and redeeming them before Feb. 28 will pay off in more ways than one. I’ll make progress toward Globalist status and save on my award bookings. It’s a win-win.
Alaska Mileage Plan miles
Airlines are experiencing a tough year due to low travel demand brought on by the pandemic. Airlines like Alaska have resorted to selling miles (to both consumers and banks) to stay afloat, which means they are ripe for devaluation next year. So why am I stocking up on Alaska miles? Primary because Alaska miles are one of the highest-valued currencies by TPG. Plus, Alaska's partnership with carriers like Emirates, Cathay Pacific and Qatar Airways provides access to some of the best premium cabins out there.
Redemptions with Qatar Airways won't be possible until Alaska joins Oneworld on March 31, 2021, and there's a chance that a devaluation will follow. However, with travel demand unlikely to pick up until at least the second half of the year, a devaluation is unlikely.
I'm a West Coast flyer, so even if Mileage Plan gets severely devalued and those premium-cabin awards end up out of reach, I can always put these miles to good use on a domestic flight. Regardless of what happens with Alaska in 2021, I'll be stocking up on miles with the Alaska Airlines Visa Signature® credit card and hoping for the best.
Remember how certain 2020 seemed at the beginning of the year before everything changed? I’ll be going into 2021 with that memory in mind. Nothing is certain and things can get derailed at any moment. However, I’m hopeful that things will get better next year and I’ll be traveling more frequently and comfortably than I have before. When I do, these points and miles will help me get where I need to go at the best rate possible.