Nick Ewen is TPG's editor-in-chief and helps readers leverage credit cards (he has more than 25 of them) and loyalty programs to travel more for less. He's been at TPG for over 11 years.
May 17, 2020 • 8 min read
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Quick summary
The article discusses why focusing on flexible credit card points is safer than accumulating airline or hotel-specific rewards, especially during uncertain times.
Travel disruptions have led many to receive large refunds in airline miles and hotel points, increasing exposure to potential devaluations.
Loyalty programs have recently implemented negative changes, such as raising redemption rates and limiting elite status qualification, often with little notice.
Credit card points offer greater flexibility, allowing transfers to multiple partners and reducing the risk of sudden devaluation or loss.
What to consider
Some loyalty programs have recently removed award charts or increased redemption rates with minimal warning, impacting the value of accumulated points.
There is a small risk of losing points if a loyalty program operator goes out of business, though points are generally safe during bankruptcy proceedings.
Online shopping portals and targeted card offers can help boost your points balance even when travel is limited.
What you'll miss from the article
A detailed comparison of recent loyalty program changes and practical strategies to protect your rewards from devaluation.
Generated by AI with support from our editorial team.
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However, there are many reasons why someone would focus on other reward programs. If you're a hub captive, you may be interested in earning miles with a specific airline, and if you're planning to book a future trip to a specific resort, your attention may be on earning hotel points. This is especially true with new incentives from Chase and Amex to spend on your cobranded credit cards.
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Here's why that strategy may backfire — and why I'm doubling down on earning credit card points right now.
Thanks to a pair of trips I've canceled due to COVID-19, my wife, daughter and I have (combined) received the following rewards back in our accounts:
280,000 Alaska Airlines miles
70,000 American Airlines miles
60,000 British Airways Avios
96,000 World of Hyatt points
As we've covered before, points and miles are bad long-term investments, as their values tend to depreciate over time. If you've been forced to cancel a trip and received a refund of points or miles in airline or hotel loyalty programs, you may want to press pause on earning additional rewards. Otherwise, you may fall victim to the next trap ...
Ongoing devaluations
United recently raised award rates on many partner awards, including Lufthansa business class. (Photo by Zach Honig / The Points Guy)
Chief among these culprits is United MileagePlus, as the program has made two notable changes that are indisputable devaluations:
Adjusting elite qualification from partner flights: As of late April, it's now harder to earn United Premier elite status on partner flights, as United has now capped the PQPs you'd earn on non-United itineraries. Even worse? The carrier offered just one day of notice before implementing this new policy.
If you had been working toward a specific award, you'd suddenly need more miles — one of the biggest problems with being over-leveraged in a specific currency. These changes even have some long-time United elite members questioning their loyalty.
There's also the risk of losing any points or miles in a loyalty program if the operator goes under. While this is a more remote possibility, we have seen some programs pause redemptions as a result of the pandemic. History has shown that your points and miles are generally safe during bankruptcy proceedings, though there's an outside chance that they could be lost entirely if a carrier permanently stops operations.
Of course, there's also a slim chance that a credit card issuer could go under as well, but that's very unlikely.
Why credit card points are a safer bet
On the other hand, if you focus your energy on earning credit card points rather than airline- or hotel-specific rewards, you can minimize (or remove) any fallout from the above issues. Whether you're earning transferable rewards or fixed-value points, they tend to be much more flexible than those affiliated with an individual travel provider. In many cases, you can use them for flights on any airline, and there's little risk for devaluation.
If you can transfer your credit card points to partner airlines — a feature offered on select Chase, Amex, Citi and Capital One cards — that can provide even greater protection.
For example, if you were collecting United miles for a Star Alliance award ticket to Europe in the past, many of those are now more expensive — 77,000 miles for one-way business class on most partners. However, if you had instead focused on earning Chase Ultimate Rewards points, you still have the option to transfer them to United — but you could also transfer them to Singapore Airlines' KrisFlyer program, which charges 72,000 miles for a one-way, business-class award ticket from North America to Europe.
Note that you're not limited to earning these points through just credit card spending either. Since many Americans are still spending large amounts of time at home, you should definitely be taking advantage of online shopping portals as well to boost your earning rates. Chase Ultimate Rewards has its own portal — look for the "Earn bonus points" section of the Ultimate Rewards site — while you can earn bonus Amex points through Rakuten (formerly Ebates). By clicking through these sites, you can earn even more rewards for your everyday purchases.
While I tend to favor cards that earn transferable rewards, this is magnified even more right now. Here are the cards in my wallet that are currently getting the most action:
Chase Sapphire Reserve: I typically use this card for all travel purchases thanks to the 3x Ultimate Rewards points I earn, but right now, it's offering 5x points on grocery purchases for May and June (on up to $1,500 in spending each month). I've used it a few times for trips I've planned for late 2020, but it's currently my go-to option for buying groceries.
American Express® Gold Card: Earlier this year, I made the decision to apply for the Amex Gold, even though I wasn't eligible for a welcome bonus. This card offers 4x points at restaurants, so I'm using it for takeout orders at local restaurants (in the U.S.).
The Blue Business® Plus Credit Card from American Express: For other purchases that don't fall into typical bonus categories, I swipe my Blue Business Plus card, which offers 2x Membership Rewards on all purchases (up to $50,000 in total spending each calendar year; then 1x).
All of these purchases put me closer to fantastic award trips — and limit my exposure to potential devaluations and negative changes to airline and hotel loyalty programs.
Bottom line
It's important to have a strategy for earning and redeeming rewards, and given the current state of the travel industry, it's more important than ever to make credit card points a part of it. Transferable currencies — like Amex Membership Rewards and Chase Ultimate Rewards — can offer spectacular value, but even a fixed-value rewards card may be a better choice than an airline or hotel cobranded option.
Don't fall victim to unexpected devaluations or no-notice changes to loyalty programs. Instead, focus your energy on more flexible rewards as you plan for your next vacation.
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
