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Why I'm not a fan of cash-value loyalty programs like BreezePoints

July 21, 2021
9 min read
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Over the past few years, we've seen more airlines move to dynamic award pricing. This is especially common in the U.S., with all of the big three carriers now employing some form of dynamic pricing. This award pricing model lets airlines change the cost of award tickets based on demand, season or however else they see fit.

Going a step further, we have programs like JetBlue TrueBlue and Southwest Rapid Rewards that directly price award tickets based on the cost of a cash ticket, with more expensive tickets costing more points. Sometimes you'll see a slight fluctuation above or below the usual cent-per-point value, but they tend to stay around the same value.

More recently, we've seen some carriers switch to cash-value loyalty programs. This takes dynamic pricing one step further by awarding the traveler a percentage of a fare back in the form of flight credit. These points can then be redeemed toward future flights.

Two great examples of this are Norwegian Reward and the new Breeze Airways BreezePoints program. In the case of Breeze, you earn 2%-4% of your fare back in BreezePoints on all flights. This is essentially the same way cash-back credit cards work, except you can only use your rewards toward future flights.

While these types of loyalty programs are easy to understand, I'm not typically a fan of them. I find them unexciting and, frankly, not a great deal for some consumers. Here, I'll show you why I don't like these programs and discuss what existing cash-value programs can do to improve and be competitive.

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You get a smaller return on your flights

Cash-value programs tend to give you a lower return on your paid flights. (Photo by Zach Griff/The Points Guy)

The first major issue with existing cash-value programs is that you get a lower return on paid flights. Cash-value programs tend to award fewer rewards per dollar than traditional airline programs. For example, Breeze offers 2% back in BreezePoints on Nice base fares (before taxes), 4% on Nicer base fares and 4% on fees for things like seat selection and checked baggage.

The same goes for Norwegian Reward. This program earns 2% in CashPoints on LowFare tickets and 20% on significantly more expensive Flex tickets. It's safe to say the majority of members are earning on LowFares, given Flex tickets are often double the cost.

On the flip side, American, Delta and United offer a minimum of 5 miles per dollar spent on base fares, for a return of 7%, 5.5% and 6.5%, respectively, based on TPG's valuations. Those with elite status will earn even more per dollar spent on airfare, and you may be able to get more value from your points by redeeming for aspirational awards like international first class.

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Even TrueBlue and Rapid Rewards award more than these cash-value programs. On the TrueBlue side, you'll earn 3 base points per dollar on all Blue and higher fares. Plus, you'll earn another 3 points per dollar when you book directly through the JetBlue website. Six points per dollar are equal to a 7.8% return on flights. Of course, those lower returns let Breeze and Norwegian keep their fares low.

At the same time, a lower return could cost Breeze valuable customers. One way that programs like BreezePoints can fix this issue is by offering a greater return on flights. I'd love to see this be close to 6% back on all flights, to be competitive with the traditional airline programs. This would make these programs substantially more competitive for business travelers and other frequent flyers that will spend a lot with the airline every year.

Or, Breeze could go the JetBlue route and offer bonus rewards to those who book directly through their website. This would help the carrier save money as they're less likely to have to pay a commission to an online travel agency like Expedia or Kayak. They can pass some of these savings along to their customers in the form of more rewards.

Related: Neeleman’s new airline Breeze will use a ‘see how it goes’ approach to succeed. And business class — eventually

There's no way to redeem for aspirational awards

Cash-value programs make it almost impossible to redeem for aspirational awards. (Photo by Zach Honig/The Points Guy)

Another issue I have with cash-value programs is that you can only use them toward flights you're probably going to take anyway. Sure, this is great for consumers who just want to get from point A to point B. But there's no way to maximize your miles for an aspirational award in a top-notch business-class product — and this is for two reasons.

The first is that most airlines that employ cash-value loyalty programs don't typically have airline partners. This is in large part because these airlines are low-cost carriers that don't participate in typical alliances or non-alliance partnerships.

Rolling out partner redemptions in cash-value programs is difficult. Would the program charge the same price as what the operating partner charges? If so, it will be hard to rack up enough rewards to cover a $4,000 business-class ticket to Europe if you're only earning, say, 2%, back on your airfare. This also makes it harder to save on high-cost holiday airfare, as the price of an award will go up alongside the cash price.

On top of this, airlines that have implemented cash-value programs don't offer their own premium products. So even if you move all your business to one of these carriers and rack up thousands of dollars in cash-value rewards, you can't use them for a premium experience.

But not everyone wants high-end redemptions. So, one way that cash-value programs can improve is by offering frequent sales on award tickets. This would effectively boost the value of rewards and — if these sales are run frequently enough — would make cash-value rewards more intriguing to earn. Plus, airlines can use this to fill seats on undersold flights. Ideally, I'd like to see these sales run on an ongoing basis as a list of discounted routes or destinations.

Breeze could also opt to offer higher redemption value to frequent flyers by adding elite status benefits. If it offers a 30% bonus redemption value to elite members, $100 in BreezePoints would be worth $130. This would encourage moving loyalty to Breeze and make the rewards more valuable to travelers earning them.

Related: The 6 best airline award chart sweet spots

They make good cobranded partnerships difficult

Norwegian's now-defunct credit card had a tough value proposition. (Photo by Fabrizio Gandolfo/SOPA Images/LightRocket via Getty Images)

Cash-value programs make it extremely difficult to create engaging cobranded partnerships too.

For example, Norwegian Airlines launched a rewards credit card in 2019 before it exited the U.S. market. This card was a tough sell given it awarded 2% in CashPoints on Norwegian flights, 2% on dining and groceries and 1% on everything else.

Meanwhile, the Citi® Double Cash Card earns 2% cash back on all purchases, 1% when you buy and 1% as you pay. This is a better earning rate than the Norwegian card and the rewards are far more flexible. I would hate to see a possible Breeze cobranded credit card suffer the same fate.

Of course, the same can be said about JetBlue's and Southwest’s credit card portfolios, given both of their points are roughly pegged to a single value per point. However, these cards offer other benefits. You can use your Southwest credit card to earn a Southwest Companion Pass and your JetBlue Plus Card to earn Mosaic elite status. Plus, some of these cards offer category bonuses on popular spending categories.

I think Breeze (and other cash-value programs) needs to do something similar if it launches a cobranded credit card. I would like to see these cards add benefits beyond what we saw with Norwegian's now-defunct card. Some interesting perks could be adding free bags, priority boarding or even access to more discounted award flights. Plus, we'd need to see earnings better than what one can get with a cash-back card. Think 2.5% back on all purchases or 3% back on groceries.

These perks would make these credit cards worth using for everyday spending. Sure, your rewards are locked up with an airline, but you're earning more rewards as a result. Plus, the added benefits would offset any annual fee that the card charges for frequent travelers, and make said travelers more likely to fly with the airline instead of another low-cost carrier.

Related: The best credit cards to use on low-cost carriers

Bottom line

Cash-value loyalty programs like BreezePoints are simple, but in my mind, they leave much to be desired. On the one hand, the straightforward, no-frills nature of these programs makes them easy to understand for the everyday traveler. But for travelers like myself who like to get the most from their travel rewards by redeeming for high-value award tickets, these programs don't offer incentives to fly the airline often.

Of course, there are a few changes these loyalty programs can make to be more attractive. Simply boosting the earning rates and offering better redemption rates on select routes could go a long way to creating an engaging loyalty program. And if Breeze wants to create a solid cobranded credit card, it needs to make the card worthwhile by adding benefits and increased rewards-earning to make it more attractive than a cash-back card.

Feature photo by Zach Griff/The Points Guy.

Featured image by (Photo by Zach Griff/The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Cons

  • Steep $550 annual fee
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  • You must spend the $300 travel credit before earning 3x points for travel and dining
  • No automatic hotel elite status
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year.
  • Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,200 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit every four years for Global Entry, NEXUS, or TSA PreCheck®
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more
Best premium travel card for value
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10xEarn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards®.
5xEarn 5x total points on flights through Chase Ultimate Rewards®.
3xEarn 3x points on other travel and dining.
1xEarn 1 point per $1 spent on all other purchases
  • Intro Offer
    Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®

    80,000 bonus points
  • Annual Fee

    $550
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

If you are looking to take your premium rewards to the highest level, this card is really a no brainer in our eyes. Chase's Ultimate Rewards make points easy to redeem, with a wide range of 10 airline and three hotel transfer partners and a friendly user interface. Despite the high annual fee, Chase is consistently adding new benefits to keep the card competitive in a fierce premium rewards field.

Pros

  • $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year
  • Access to Chase Ultimate Rewards hotel and airline travel partners
  • Unlimited 3x points on the broad category of travel and dining
  • 50% more value when you redeem your points for travel through Chase Ultimate Rewards®
  • Broad definitions for travel and dining bonus categories

Cons

  • Steep $550 annual fee
  • May not make sense for people that don't travel frequently
  • You must spend the $300 travel credit before earning 3x points for travel and dining
  • No automatic hotel elite status
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year.
  • Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,200 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit every four years for Global Entry, NEXUS, or TSA PreCheck®
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more