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Reader Question: Why are transferable points worth more than other rewards?

April 05, 2021
5 min read
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Editor’s note: This article is part of a column to answer your toughest credit card questions. If you would like to ask us a question, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

TPG reader Khant sent us a Facebook message to ask about point valuations:

“I noticed that you value Ultimate Rewards more than points or miles from any of Chase's transfer partners. Why is that the case, and how do I get the higher value out of Ultimate Rewards points?”

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Here at TPG, we tend to put a premium on Chase Ultimate Rewards and Amex Membership Rewards compared to their airline and hotel transfer partners. For example, we list Ultimate Rewards points at 2.0 cents apiece in our most recent valuations, while the highest transfer partner (World of Hyatt) is listed at 1.8 cents apiece.

We're frequently asked how we account for that difference: The answer is that we value the added flexibility of having more redemption options, but it's also a result of our methodology.

TPG's valuations are based partly on the value we can get by redeeming points, as well as how much we'd pay to buy them outright. They don't necessarily represent the absolute best redemption value possible — you can certainly get more (or less) than 1.4 cents per AAdvantage mile or 0.5 cents per Hilton Honors point. These numbers are meant to help you decide whether an award redemption is worthwhile, and on the earning side, to guide you toward getting the best return for each transaction. That said, it makes sense that transferable points would be worth more than any of their transfer partners.

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

Deciding which points to redeem

Imagine you're booking a trip that involves a flight and hotel stay. When airfare is cheap and hotel rates are high, you should pay cash for your ticket and use points to cover your room. Conversely, when hotel rates are low and airfare is high, then you should pay cash for your room and redeem miles for your flight. Hotel points and airline miles each offer good value in only one of those two scenarios, but transferable points cover you in either case.

Programs like Ultimate Rewards have multiple airline and hotel partners, so the same principle applies when you're comparing different flight or hotel options. For example, you might transfer to United MileagePlus for an economy award from San Francisco to Europe. However, you could transfer to British Airways for a short-haul award from Miami to New York.

The virtue of transferable points is that they allow you to access the sweet spots in each partner program and ultimately give you more opportunities to redeem points efficiently. You don't have to do anything special to get that higher value; just try to target awards that give you a good return and stay away from ones that don't.

Related: The best travel credit cards of 2021

(Photo by EQRoy/Shutterstock)

Related: Should I earn airline miles or transferable points?

Deciding which points to earn

Of course, the other thing to remember about TPG's valuations is they don't necessarily have to be yours. You might value SkyMiles higher if you live in a Delta hub, or you might value ThankYou points less if you're not interested in Citi's transfer partners. There's plenty of room for debate, and we always welcome a healthy discussion about the relative values of all these rewards!

If you're in the market for a transferable points credit card, check out these Chase offers. Cards in Chase's Sapphire family earn Chase Ultimate Rewards points which are super valuable when transferred to partners. The TPG team has redeemed Chase points for everything from high-end Hyatt hotel stays to Lufthansa first-class tickets.

Here's a look at current offers:

  • Chase Sapphire Preferred Card – Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.
  • Chase Sapphire Reserve – Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. Earns 3x points per dollar spent on travel and dining purchases.

Feature photo by Soos Jozsef/Shutterstock

Featured image by (Photo by Soos Jozsef/Shutterstock)
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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Best Marriott card for Business Owners
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
3 / 5
Go to review

Rewards Rate

6X6x points at hotels participating in the Marriott Bonvoy® program.
4X4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
2X2x points on all other eligible purchases.
  • Intro Offer
    Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.

    Earn 100,000 points
    75,000 points
  • Annual Fee

    $125
  • 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.

    670-850
    Excellent/Good

Why We Chose It

The Marriott Bonvoy Business Amex is a stacked card with a rewards rate that will help you earn bonus points on everyday and business-related purchases. You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. Finally, the free night award certificate with a redemption level of 35,000 points or less can get you hundreds of dollars in potential value each year.

Pros

  • 6x points on eligible purchases at hotels participating in the Marriott Bonvoy program
  • 4x points at restaurants worldwide, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. shipping
  • 2x points on all other eligible purchases
  • Earn a free-night award each card renewal month (up to 35,000 points)
  • Receive 15 elite night credits to jump-start status
  • Transfer Marriott points to 40+ airlines

Cons

  • Airline points transfer ratios are poor
  • Must spend $60,000 in a year for second free-night award
  • Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.
  • 6x points at hotels participating in the Marriott Bonvoy® program.
  • 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
  • 2x points on all other eligible purchases.
  • Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
  • Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy® points) at hotels participating in Marriott Bonvoy®. Certain hotels have resort fees.
  • Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
  • Terms apply.
  • See Rates & Fees