Reader Question: When should I transfer points to airline and hotel partners?

Apr 26, 2021

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Here at TPG, we’re constantly talking about transferable points — a.k.a. credit card points that you can transfer to airline and hotel partners. The reason is that they offer incredible versatility — they allow you to book flights on nearly every major airline and stays at many hotels at a terrific value.

However, transferring your points isn’t your only redemption option. For instance, you can use these points to book through a bank’s travel portal. This can sometimes yield better value than transferring your points or be your only option when there’s a lack of award availability. Let’s dive into our latest reader question and evaluate when you should transfer your points.

What’s the advantage of transferring Ultimate Rewards points to partners rather than booking through Chase?

TPG Reader Sai

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When to transfer points and when to redeem directly

There are a lot of benefits to redeeming Ultimate Rewards points through the Chase travel portal. For starters, it lets you use posts to cover a portion of your total purchase and being run by Expedia, it tends to offer competitive prices. Booking directly can save you time as well as money since you don’t have to search for award availability or pay additional taxes and fees. You can also earn award miles and elite credits for travel booked through Ultimate Rewards, even when you pay entirely with points.

The downside is that when you redeem points directly through Chase, the return you get is limited by the redemption rate. That starts at 1 cent per point, but you’ll get 1.25 cents per point if you have the Chase Sapphire Preferred Card or Ink Business Preferred Credit Card, and 1.5 cents per point with the Chase Sapphire Reserve.

Overall, that’s a decent value and can work out in your favor when cash prices are low. It’s also useful for booking awards on airlines like Southwest and JetBlue that have relatively fixed rates for their points. By comparison, cards like The Platinum Card® from American Express and the Capital One Venture Rewards Credit Card set the redemption values only at 0.7 to 1 cent per point when redeeming directly.

However, you can do much better than 1.25 or 1.5 cents per point, especially when prices are high — hence why TPG and Chase value Ultimate Rewards points differently.

Related: A guide to earning transferable points and why they’re so valuable

American Airlines Premium Economy
Premium economy on American Airlines. (Photo by Benji Stawski/The Points Guy)

The advantage of transferring points is that many award charts are relatively fixed, so the cost of your flight or hotel room remains fairly consistent regardless of how the cash price fluctuates. For example, a Category 6 World Hyatt property (like the Andaz 5th Avenue) costs 25,000 points per night for a standard room.

Those rooms start around $475 per night and often exceed $600, which yields a redemption value of around 1.9 to 2.4 cents per point. You won’t get that same value by booking directly, since 25,000 points will only cover up to $375 at the highest rate.

The same goes for airfare. Your best option is to book directly when prices are low, and transfer when prices are high. For example, United charges around 25,000 miles round-trip for most domestic economy awards at the saver level. If you’re able to find a cheap flight, then it makes sense to book through Ultimate Rewards. Once the cash price gets to be more than $375 or $400, however, you’ll be better off transferring to United MileagePlus (provided you can find low-level availability).

Typically, the closer to departure you book, the higher the cash rate, so transferring points is especially valuable when you need to book a last-minute flight, such as for a family emergency. Similarly, you’ll almost always be better off transferring your points when booking business and first-class flights, especially internationally. You’ll ultimately need to run the numbers for yourself and see which avenue costs the least amount of points.

Related: How to maximize your Chase Ultimate Rewards points

Bottom line

While both redemption options have the same end goal — to book a flight using your points — the costs can vary widely. When the cash prices are low, it can be cheaper to book through the Chase travel portal than transferring your points. It can also make sense to redeem directly if you’re chasing status and need the elite-qualifying credit. Meanwhile, you’re usually better off transferring your points for premium cabin flights and last-minute bookings.

Chase is unique for allowing cardholders to redeem points directly for up to 1.5 cents apiece. The same general strategy doesn’t apply to the Citi ThankYou Rewards Travel Center, Capital One travel portal or Amex Travel since you’ll only get a redemption value of 1 cent per point at best — unless you have a business Amex card that offers a rebate on flights purchased with points. At that rate, you’re better off just paying cash and saving the points for a more rewarding opportunity.

Thanks for the question, Sai, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us.

Featured image of Fiji Airways business class by Chris Dong/The Points Guy.

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Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.