Reader Question: When should I transfer points to airline and hotel partners?
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
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
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
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.
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.
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.
Featured image of Fiji Airways business class by Chris Dong/The Points Guy.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.