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| Transferable Points Give You Greater Flexibility |
| by Brian Kelly |
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This week a friend called me in a panic. He’d recently started dating someone in London and was excited about the relationship, but he lives in Los Angeles and was wondering how he was going to be able to go back and forth with coach ticket prices at $2,000 round-trip and up.
I asked if he had Virgin Atlantic miles — he did not — and I explained that you don’t have to be a Virgin Atlantic flyer to have Virgin miles, and that you can have American Express, Chase, Citi or Bilt points. He’s been a Delta Air Lines flyer with a Delta Reserve card and currently only flies Delta.
I cringed when he said this because I’ve been saying this for years: “When you put all your miles in one basket with an airline, you leave yourself to be taken advantage of.”
I couldn’t believe my eyes when I started to do a little research for him and pulled up Virgin Atlantic — almost every day this week, you could fly last minute for 15,000 Virgin miles, plus taxes and fees.
That same Virgin Atlantic flight, that was only 15,000 Virgin miles, was 175,000 Delta miles! Wow!
Bottom line: The U.S. airline programs are all on “dynamic pricing” models, which means that they fix the mileage price of the ticket to the cash price, so if it’s an expensive last-minute ticket, you’re going to be paying more in miles.
However, foreign frequent flyer programs, by and large, are not doing this — or at least not to the extent that the U.S. programs are doing it.
So, if you are only accruing U.S. airline miles, be prepared to pay a lot. Just this past week, United Airlines stealthily devalued its mileage awards. And with American Airlines also switching to dynamic pricing, the cost of awards just keeps going up along with paid tickets.
The real way to win is to be flexible and to use credit cards that allow you to transfer your points to a number of different partners.
Best credit cards for transferable points
In my opinion, some of the best credit cards allow you to earn points that can be transferred to airline partners. This gives you greater flexibility when it comes to redeeming rewards or leveraging transfer bonuses.
American Express
The American Express® Gold Card, which earns 4 points per dollar at restaurants and U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1 point per dollar), is a great card for earning Membership Rewards points, although the American Express® Green Card, which earns 3 points per dollar on restaurants, travel and transit, recently came out with a 60,000-point welcome offer after you spend $3,000 on purchases on your new Card in your first six months of Card Membership. It also has a low annual fee which can be offset by the value of the Clear and Loungebuddy credits (which is a no-brainer for any beginner). The 60,000 bonus points can get you two round-trip Virgin Atlantic economy trips from Los Angeles to London.
Chase Sapphire Preferred Card
The Chase Sapphire Preferred Card is currently offering a sign-up bonus of 60,000 Ultimate Rewards points after you spend $4,000 on purchases in the first three months from account opening. The network of airline transfer partners with Chase is extensive and includes airlines such as Virgin Atlantic, British Airways, Air Canada and Emirates.
Bilt Mastercard
While the Bilt Mastercard does not currently have a sign-up bonus, you can earn points for paying your rent. And on the first day of every month, you can earn Bilt Rent Day rewards. In May, the reward was a 100% transfer bonus to Air France-KLM Flying Blue. Full disclosure: I am an adviser and investor in Bilt.
This summer, I find Flying Blue miles to be very valuable. I’m going to Paris this weekend and flying there for just 55,000 miles each way on the new Newark-to-Paris route (Flying Blue is offering promo awards on the new route this summer).
I know many people are obsessed with the U.S. airline programs and spending on their co-branded cards to get elite miles, but just know that you could be spending on a credit card that gives you way more value and transferable points.
If you’re just blindly giving all your credit card spending to one airline, you’re really setting yourself up to get fleeced.
Credit card rewards could be in jeopardy
And while we’re on the subject of points and miles and earning credit card rewards … earlier this week, the Credit Card Competition Act was reintroduced on Capitol Hill. It could devastate the future of credit card points, including cash-back and travel rewards.
At TPG, we believe that credit card rewards and loyalty programs unlock incredible opportunities for consumers to save money and make travel more accessible for everyone, so it’s important to understand the ramifications of this proposed legislation.
Have a great weekend,
BK
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