In an earlier post in the Travel Rewards 101 series, we walked through a few different options for how to use Chase Ultimate Rewards points and why transferring them to World of Hyatt, one of Chase’s hotel partners, could provide serious value for your points. In this post, we’re going to expand that idea and talk more generally about how you can redeem your transferable points, such as Chase Ultimate Rewards, American Express Membership Rewards, or Capital One Miles as a few examples. I want to use this post to lay out the general steps to take in order to be able to transfer your points to a partner and how to make the decision about when to do that. We’ll dive into each of the transferable points programs in separate posts, because they deserve more detailed breakdowns than what one consolidated article would offer.
3 General Options For Redeeming Transferable Points:
Most programs, but not all, offer the same general paths for redeeming your points. These fall into three key buckets:
1. Redeem for Cash Back
Most programs offer an option to redeem your points for cash back. This is typically the easiest path to redeem, because all you have to do is click “redeem” and your points are immediately able to be cashed out. However, it is typically also the lowest value of any of the options for redeeming your points. You are definitely trading off ease of redemption against the lower value itself.
2. Redeem for Travel Via Portal
Most programs that offer transferable points also have a “travel portal”, an internal site that works similarly to sites like Expedia to allow you to search for a broad range of hotel stays, flights, and other travel items such as rental cars as well. This is, in most case, going to provide you with more value than redeeming directly for cash back, because these programs build their rewards around travel specifically and want to incentivize customers to use them with travel in mind. To provide a couple examples, Chase allows customers to use Ultimate Rewards points for between 1.25 CPP and 1.5 CPP in the travel portal depending on which card they hold. This is a higher value than the 1 CPP customers would receive for cashing out their points directly, but it requires you to want to travel and have a travel redemption in mind.
3. Transfer to Travel Partners
As we walked through in the post highlighting the value of transferable points, the highest ceiling for potential value for transferable points typically comes from transferring to travel partners. We walked through an example transferring Chase Ultimate Rewards points to Hyatt, and there are similar redemptions that can be made to other hotel and airline partners with all transferable points programs. Redemption values and transfer ratios can vary by partner, but as a general rule, one transferable point is going to be worth one point in whichever program you choose to transfer to. Travel partners have a theoretically uncapped ceiling for value: you could get 5 CPP or more theoretically on some redemptions, particularly international business or first class flight redemptions, or often more than 2 CPP on some hotel stays as well such as the Hyatt example we walked through. The major con of transferring to travel partners is that it is by far the least straightforward option of the three and generally requires much more research and knowledge than the other options, but that’s why you’re here isn’t it? Miles Wizard is here to help you out in this process and impart as much knowledge as possible to make this process easier, because this option is certainly the most lucrative and rewarding.
How do I decide which route to go down?
Here’s a general overview of the decisions you should make in deciding how to use your transferable points. Note that this is extremely simplified, particularly around the points availability.
Let’s walk through these decisions and give a bit more context:
1. Do you want to use your points for travel?
This may seem like a silly question if you’re reading Miles Wizard, but some people don’t actually want to use their points to travel. That’s perfectly fine, and for anyone in that situation, it’s best to cash out points instead of pursuing travel rewards that aren’t actually something that’s of interest. I’ll repeat this later in this series, but a lot of the value of points is allowing you to do what you want, whether or not it is the “highest value”. Another case here may be a scenario where you feel like you have too many points (sounds impossible, I know). In this case, you may feel like you have enough points saved up for whatever travel you’d like to take over the near future. It could be entirely reasonable to cash out your points.
2. Is there award availability that gets you more than your “portal cash out value”?
We’ll devote the next article to discussing how to actually find award availability. In a nutshell, award availability means that there are flights or hotel rooms that are able to be purchased using points. This is not always true: in fact, many flights and hotels only allow customers to book lower priced flights and hotels, so in some cases you may not be able to use your points on the exact flight or hotel you may have in mind. Before transferring your points, you should always check to make sure there is availability that will work for you. I generally do not recommend “speculatively transferring” points, which means converting your points from say Chase Ultimate Rewards to United MileagePlus Miles without having a specific use case for those United miles.
The key item to keep in mind is this: even if you find award availability, make sure that the value you will get by transferring those points is greater than what you can get using your points in the bank’s travel portal. As an example, if I find a United flight that I like and that has award availability, but the flight costs $300 to purchase and United wants 30,000 miles to purchase that flight, I am only getting 1 cent per point (CPP, calculated by dividing the 30,000 cents, or $300, by the 30,000 miles needed to purchase the flight). In this case, I could get 1.25 CPP if I hold a Sapphire Preferred card by booking that flight through the Chase travel portal, so I could use fewer points to buy the same flight through the travel portal. Because of this fact, I shouldn’t transfer those miles to United and instead should likely purchase via the portal: I would only need 24,000 points to purchase the flight via the portal vs the 30,000 miles United is asking for, so I can save 6,000 Ultimate Rewards points by not transferring to United.
3. Would purchasing points allow you to fulfill your goals at a good value?
In some cases, purchasing points can be a valuable way to spend less than the cash prices that hotels and airlines are asking for their stays and flights. This is typically something I would consider more with some specific hotel chains such as Hilton and IHG, which frequently sell their points for very low prices (0.5 CPP each). There are some airlines that sell their points for reasonable prices, such as Aeroplan and Avianca, but this is less frequent overall in the airline space. The idea here is you could take your points, cash them out, and use that cash to actually turn around and purchase the points that you want: as an example, let’s say you have a stash of Chase Ultimate Rewards points and have found a nice IHG hotel that you’d like to book, perhaps the Kimpton Seafire as an example.
Because Chase Ultimate Rewards points only transfer to IHG One Rewards at 1:1, you would have to transfer 70,000 Ultimate Rewards points to stay at the Kimpton Seafire for one night. However, you can take a slightly more roundabout approach and get much better value: you could alternatively cash out your points at 1 CPP, and you would end up with $700 in cash. IHG frequently runs sales on their IHG One Rewards points at 0.5CPP, so if you waited and purchased points at that 0.5CPP rate, you could purchase 140,000 IHG One Rewards points with your same stash of 70,000 Ultimate Rewards points. That’s twice as many points, and would be enough to purchase two nights at the Kimpton Seafire instead of one. This is typically a more niche option, and is more roundabout for sure, but is always another check you should make before transferring points. This is typically why I wouldn’t recommend transferring to programs whose points are not worth much in the first place, such as IHG. It’s another guardrail to keep in mind as well: can I get more value for my points by cashing them out and purchasing points instead of directly transferring them?
4. Do you think you’ll travel again in the near future and want to keep your options open for a future trip?
If you can’t find award availability or a good use for your points in the portal, you may not be able to find a great use of your points for the specific trip you have in mind. That’s not to say that you’ll never be able to get any value for those points. You definitely can, but you should ask yourself whether you’d rather keep your options open down the road, or whether in the short term you’d really just prefer to have the cash and can worry about future trips later. If you do really want the cash, there’s nothing wrong with that, but do keep in mind that there will likely still be other good uses for your points for future trips you want to take.
Even if you don’t find the award availability as we mentioned at first, it’s also worth checking at this stage whether you can follow the strategy of cashing out points and purchasing the points you’d like if you end up at this point in the decision tree as well.
Bottom Line:
To summarize the key points here, these are the things you should keep in mind before transferring your points to a partner:
1. Is there award availability in the first place?
2. Is the award availability at a better rate than I could get by cashing out my points via the transfer portal?
3. Is the award availability at a better rate than I could get by cashing out my points and buying the program’s points myself?
If you answered yes to all three of those questions, great! You’ve found a great time to transfer your points to the program that interests you. Check out the next article on searching for award availability for a walkthrough of how to find this in the first place.