Travel Rewards Might Be Your Best Use of Transferable Points (But Do the Banks Want You to Know This?)

The Travel Rewards Optimizer plans we create are for people who want to turn their routine credit card spending into free or reduced cost travel. Major card issuers (Chase, Amex, Citibank) have proprietary flexible points programs or “currencies” that can be used in a variety of ways. You can use these points to pay down your credit card bills or exchange the points for gift cards. However, we believe that the most lucrative use of these flexible points is to transfer them to the loyalty programs of airlines and/or hotels.
 
What we find interesting is that the banks that allow you to transfer your points to airlines and hotels do not go out of their way to let you know about this opportunity. They might make you do a little searching to find the greatest value.
 
Citibank Thank You (TY) Points
 
Citibank is quick to let you know that you can pay balances with points at the rate of 8/10ths of a cent ($0.008) per point. They also offer opportunities to purchase travel through their portal, make Amazon purchases, or purchase gift cards at one cent ($0.01) per point.
 
To transfer these points to travel partners, you must click on a nondescript link entitled “See More Ways to Redeem.” At the bottom of a long list, you will find the transfer partners which include 14 airlines (one domestic – JetBlue) and three hotel chains.

Chase Ultimate Rewards (UR) Points

Chase also steers you to using your points to pay balances, buy gift cards, or utilize their travel portal. For these uses, they are a bit more generous than Citibank as the value per point ranges from one cent to 1.25 cents ($0.01 – 0.0125). Amazon purchases will net you 8/10ths of a cent per point ($0.008).
 
To transfer your points to a travel partner, you must click on “More Ways to Use” and from there, the opportunity to transfer to travel partners is the last option shown. Chase’s transfer partners include 11 airlines (three domestic – JetBlue, United, and Southwest) and three hotel chains.
 
American Express Member Rewards Points

American Express’ first preference is that you use your hard-earned points to pay down your bill. For this use, each point is worth 6/10ths of a cent ($0.006). They also offer opportunities to buy gift cards or use your points to purchase travel through their travel portal at a value of about one cent per point ($0.01).
 
To their credit, American Express makes it easier for you to get to their list of transfer partners (through a link labelled “Transfer Points”). This lengthy list includes 17 airlines (three domestic – Delta, JetBlue, Hawaiian) and three hotel chains.
 
Bottom Line
 
If you use flexible points to pay down card balances, or buy gift cards, you might get a penny per point or a little bit more if you are careful. However, if these points are converted to some of the more generous airline or hotel programs, you can routinely get two cents per point in value or more. In some cases, Ms. Optimizer and I have gotten more than four cents in value per point. It is no surprise that the banks are not eager to let you know about this.
 
The difference of a cent here and there might seem inconsequential. But, our Travel Rewards Optimizer plans put our clients’ households on the path to netting hundreds of thousands of points per year when taking sign-up bonuses, category spend bonuses, and simple routine spending into account. A difference of one cent per point translates into $1000 for a household generating a modest 100,000 points.
 
Start thinking about your future travel plans, and let us design a Travel Rewards Optimizer plan that will help you get there for less.