Do Speculative Point Transfers from Chase to Hyatt Make Sense?

The custom Travel Rewards Optimizer programs we create for clients focus on the accumulation of transferable points through routine credit card spending. These transferable points give clients the flexibility to convert their points to different airlines and hotel chains or even use the points for cash.

Once points are converted to some other “currency” such as airline miles or hotel points, it is hard (often impossible) to convert them into anything else. For this reason, we generally recommend that clients do not transfer points until they are prepared to make flight or hotel reservations. Fortunately, many transfers are almost instantaneous. In fact, when making reservations, I often have two websites –- the airline or hotel chain I want to use and the credit card site that supplies the points –- open at the same time. I execute the point transfer from the card issuing bank, hit the refresh button on the airline/hotel website page, and voila, the airline miles or hotel points appear in my account and are ready to use. With this approach, I avoid having large numbers of miles or points with specific uses trapped in my airline and hotel accounts.

In most cases, I see speculative transfers – moving points or miles before there is a specific use for them – as risky. Airline and hotel loyalty programs can change their rules or devalue their points and miles such that you are not able to get the award flights or hotel stays you were expecting. Once transferred, you might miss opportunities to use your transferable points for more attractive options that come up later. Another issue is that those points could remain unused for a long period of time.

Of course, as with many rules, there are exceptions.

Ms. Optimizer and I will be moving some of our Chase Ultimate Rewards (UR) points to our World of Hyatt accounts for some unknown future use. For those holding the Chase Sapphire Preferred credit card,  Chase is changing the transfer ratio from 1:1 to 4:3 on October 1st. This means that, while 1,000 UR points currently transfer to 1000 World of Hyatt points, the new transfer ratio will convert 1,000 UR points into 750 Hyatt points, an immediate 25% devaluation.

The decision to make this speculative transfer was not that difficult for us. Turning Chase UR points into World of Hyatt points is a favorite play for many points and miles enthusiasts. Many view World of Hyatt points as one of the more valuable points and miles currencies.  Based on what I have seen, the consensus value of a Hyatt point is perhaps 1.75-2.0 cents. However, I have routinely gotten redemption values of 2.5 cents or more per point for reservations at Hyatt’s US properties.
 
For us, the points are not only valuable, but also likely to be used in the next year or so. Looking  back over the past 10 years, Ms. Optimizer and I have stayed in Hyatt properties with points an average of 12-13 nights per year. With this in mind, we will transfer the number of Chase points to Hyatt that we can reasonably expect to use in 12-18 months.

Even though the Hyatt transfer ratio for those holding a Chase Sapphire Preferred card is changing soon, Chase will continue to offer the 1:1 ratio for customers who hold the Chase Sapphire Reserve card. However, this luxury travel card comes with a $795 annual fee (vs the $95 annual fee for the Sapphire Preferred card). For those who tend to transfer their Chase UR points to Hyatt points and do not have a Sapphire Reserve, but have been on the fence about applying for one, this might be the time to upgrade.

Anyone thinking of transferring Chase UR points to Hyatt to avoid the devaluation should act quickly. In my experience, transfers are instantaneous. However, when I have made transfers in the past, the Chase website cautions that transfers of points can take up to seven business days.
 
There is another important point. This post has focused on the Sapphire cards which are personal cards. There is a parallel devaluation with Chase’s business card line. After October 1^st, Chase Ink Business Preferred card customers will also see the Chase UR points to World of Hyatt points transfer rate drop from 1:1 to 4:3. The Chase Reserve for Business card will maintain a 1:1 transfer rate. As with the consumer cards, the preservation of the 1:1 transfer ratio comes with a much higher annual fee ($795 vs. $95).

The points and miles landscape is always undergoing change. While I am not thrilled with this particular change, at the same time, new opportunities are always appearing. When we create a Travel Rewards Optimizer program for you, we incorporate the latest developments in the points and miles game so you can get to your next vacation faster. Additionally, during the 12 months after delivering your plan, we provide updates that are relevant for the credit cards we have recommended for you.

We are ready to help you turn your routine credit card spending into the travel of your dreams.