Reader Question: What to do with Membership Reward Points?

Update: Some offers mentioned below are no longer available. View the current offers here.

Since many folks jumped into the American Express Membership Rewards program last summer with the "bump the bonus" bonanza that was going on when Amex was basically matching anyone to a targeted offer of 75,000 MR points for the Premier Rewards Gold card, there are now many folks who want to get out of the Membership Rewards program since their annual fees are due. As a result, I have been getting a number of emails asking what to do with MR points so that they can transfer them out before closing their accounts. In case you are in a similar situation, I wanted to share a few ideas that might be useful.

Open a new Membership Rewards account:

Perhaps the best and easiest solution is to open a new Membership Rewards earning card before you close your current Membership Rewards earning card. That way you could get another sign-up bonus and you wouldn't have to lose the flexibility of MR points by prematurely transferring them to a hotel or airline partner account. There is some fine print that has appeared on many Amex credit and charge card applications that states something like "The welcome bonus offer is not available to applicants who have had this product or any other Business Gold, Green or Platinum Card^® account within the last 12 months." The way it is worded makes it seem as if you won't get a sign-up bonus for a personal MR earning card if you have had a personal MR earning card in the last 12 months. Or, you won't get a sign-up bonus for a business MR card if you had a business MR earning card in the last 12 months. I don't know how strictly that is being enforced, especially when you are changing card products, but an easy workaround is to simply apply for a business card if you previously had a personal card.

For example, if you got the personal Amex Premier Rewards Gold Card last summer during the "bonus bumping bonanza", but now you don't to want pay the annual fee, you could sign-up for the The Business Gold Rewards Card Amex and your MR points would be safe and sound when you cancel the personal card.

Transfer to British Airways at 40% bonus:

(Update this transfer bonus is now expired)

If you are looking to cash-out right now, then look at the option of transferring some of the points to British Airways Avios at a 40% bonus. You will receive 1,400 Avios for every 1,000 Membership Reward points that you transfer through September 27th. I have seen a higher transfer bonus of 50%, but 40% isn't half bad. I love Avios for short trips within the US (including Hawaii), the Caribbean, and to South America. They are also very handy to Dublin from Boston. The award chart is distance based, so short non-stop trips that involve a partner airline hub (like American Airlines or Alaska Airlines hub) are the way to go. I don't use them to fly on British Airways due to the high fees, but I use them to fly American Airlines domestically on a pretty regular basis. There is no last-minute booking fee, and they can save you a ton of cash on expensive or last minute flights. I have an Avios balance of over 100,000 and I will still likely add to it with this current transfer bonus because I know how useful these points are to my family.

Transfer to Hilton HHonors at 1:2

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(Update this transfer bonus is now expired, but you can still get 1:2 with Hilton by going through Virgin Atlantic).

Hilton HHonors is a hotel transfer partner of Membership Rewards, and currently has a transfer ratio where you receive 1,500 HHonors points for every 1,000 Membership Reward points you transfe (expired). That isn't terrible if you have an aspirational redemption in mind (I don't think it is great for most domestic redemptions), but if you want to get even more bang for your point, then funnel the points through Virgin Atlantic at a 1:1 ratio and then transfer them from Virgin Atlantic to Hilton at a 1:2 ratio. You can do the same thing via Hawaiian Airlines to Hilton as well, but only with Hawaiian Miles that aren't transferred in from a third party like Membership Rewards (though I have read accounts of it working with third party miles and points). Regardless, don't transfer your MR points to Hawaiian expecting this to work - stick with Virgin Atlantic.

The Weekly Flyer also posted about this tip recently in regards to keeping his HHonors account active. By doing this you will ultimately end up with 2,000 HHonors points for every 1,000 MR points transferred, instead of just 1,500 if you transferred directly to HHonors. You must transfer a minimum of 10,000 miles from Virgin Atlantic and then can do so in 5,000 mile increments. In essence, 25,000 Membership Reward points could get you 50,000 HHonors points.

Transfer to Singapore Airlines to fly United:

Ever since Continental left the Membership Rewards program last year, people have been interested in other ways to use Membership Reward points to fly on Star Alliance award tickets. Many have relied on Aeroplan when they wanted to use MR points to fly on United, but that program has some downsides, including inability to book one-ways for half of the price of a round trip. Using Aeroplan miles on Air Canada, or many of the other Star Alliance partners will also land you with a hefty fuel surcharge (but they do have really good international lap child fees compared to others airlines). One-ways are discounted, but only by 1/3.

Depending on the award you are interested in, transferring your Membership Reward points to Singapore Airlines' KrisFlyer program may be an even better decision than Aeroplan. As Lucky points out, it costs 40,000 United miles to fly round trip to Hawaii in coach or 80,000 miles to fly in business class from the US. However, it only costs 35,000 KrisFlyer miles in coach, or 60,000 KrisFlyer miles to fly in business class on the exact same United flights to Hawaii. Singapore Airlines reportedly pulls from the exact same award availability as United for United flights, so if it is bookable on the saver level with United miles, it should be bookable with KrisFlyer miles. For United redemptions within the US (and Canada) to everywhere other than Hawaii, it is 25,000 round trip for coach (the same as with United miles) or 40,000 for business class (10,000 fewer miles than with United). Due to the way that United codes their "first class" on the domestic routes that only have two classes (coach and first) it remains 40,000 miles even though it is called "first class".

You can use this to your advantage to check out the business class/first class cabin on United's new 787 Dreamliner for only 20,000 each way on the domestic routes it will be flying later this year - read this post by Bengali Miles Guru to learn more about that nice trick. You do have to call 213-404-0301 to book Singapore Airlines rewards on partners like United, but that is a small annoyance for a solid use of Membership Reward points. Also keep in mind that miles don't transfer immediately to Singapore Airlines from Membership Rewards, so have some flexibility with your redemptions as you can't guarantee what you want will be available a day or two later when the miles post.

I plan to utilize this partner redemption in the relatively near future, and will post my first-hand experience when that happens. Seems like a real winner for United flyers with Membership Reward points.

Of course there are many partners to transfer your Membership Reward points to, but those are some of the current top options in my book. Delta is another good standby if you need to transfer out a chunk of MR points, and there are some good redemptions using Delta Skymiles, but it isn't a transfer partner that generally gets me very excited. Now, if they were running a transfer bonus my opinion would shift...

To determine what transfer option ultimately makes the most sense for your family, you really have to look at your upcoming travel goals and see which partner will help you meet that goal. You are best served by keeping your MR points as MR points until you know exactly what you want to do with them for a specific redemption, but in case you need to empty out your points stash in a hurry, at least you now have a few different options to consider.

Disclaimer: I do receive a commission if you are approved for a credit card using one of my affiliate links. As always, thanks for your support.