In the interest of full disclosure, One Mile At A Time earns a referral bonus for anyone that’s approved through some of the below links. These are the best publicly available offers that we have found for each card. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. Please check out my advertiser policy for further details about our partners, including American Express, Chase, and Citi, and thanks for your support!
Last week I wrote a post entitled “Best Uses Of Chase Ultimate Rewards Points,” where — as the title suggests — I shared what I considered to be the best uses of Chase Ultimate Rewards points in light of the United devaluation. I followed that up with a post entitled “Changing Credit Card Strategy Due To United Devaluation?” where — as the title suggests — I analyzed whether in practice the value of Chase’s cards that accrues Ultimate Rewards points changes.
One of my main points in the post about the best uses of Chase Ultimate Rewards points was that Hyatt’s top hotels are still 22,000 points per night, so the points currency was still extremely valuable. Now that Hyatt has devalued their chart, has that changed?
To recap, here are the major devaluations we’re seeing to the value of Ultimate Rewards points over the coming months:
- United MileagePlus announced a huge devaluation to their program for bookings made on or after February 1, 2014, in particular for travel in premium cabins on partner airlines
- Hyatt Gold Passport announced a devaluation for bookings made on or after January 7, 2014, which especially impacts their top tier properties
- Southwest Rapid Rewards, which has a revenue based redemption program, announced a devaluation to how many points it requires per dollar to book a “Wanna Get Away” fare. Each point is now decreasing in value from 1.67 cents to 1.43 cents for bookings made on or after March 31, 2014
In March I valued Ultimate Rewards points at 1.8 cents each, last week I valued Ultimate Rewards points at 1.6 cents each, so what do I value them at now, in light of the Hyatt devaluation? I probably now value Chase Ultimate Rewards points at 1.5 cents each.
When I valued Ultimate Rewards points last week I made one major error. I valued them the same I did their most valuable transfer partner, and didn’t assign them a premium. Several of you called me out on that, and you’re absolutely right. Chase rewards points should have a higher value because of their flexibility. Even if the value of the individual transfer partners is now lower, there is a tangible benefit to being able to choose where your points are directed, so the value of Ultimate Rewards must necessarily be higher than that of their best partner.
What do I value the individual points currencies of Chase Ultimate Rewards’ transfer partners at after their individual devaluations? Off the top of my head I’d say:
- I value Hyatt Gold Passport points at 1.4 cents each (there are still many great category six properties for 25,000 points per night, like the Park Hyatt Maldives)
- I value United MileagePlus miles at 1.4 cents each (I’d be hard pressed to value them lower since redemption rates for travel on United didn’t go up by that much)
- I value Korean Air SkyPass miles at 1.4 cents each (while they can be a pain to book through and have some ridiculous rules, 160,000 miles for roundtrip first class to Asia is tough to beat given how much award space they release, and that their fuel surcharges are mild)
- Southwest Rapid Rewards points will be redeemable for 1.43 cents each towards the cost of a ticket
So I think 1.5 cents per Ultimate Rewards point is a fair valuation, assigning them a slight premium over the valuation of any individual points currency.
Even with the lower valuation, my advice for accruing points through credit card spend hasn’t actually changed.
To reiterate what I said in my post about if you should change your credit card strategy:
The Barclaycard Arrival World MasterCard, Starwood Preferred Guest® Credit Card from American Express, and Starwood Preferred Guest® Business Credit Card from American Express remain the best cards for everyday spend
If you’re spending money in a category that isn’t otherwise eligible for bonus points, just as before the above cards remain your best options.
- The Barclaycard Arrival essentially earns you the equivalent of 2.1% cashback towards travel (you earn two miles per dollar, each mile can be redeemed for one cent towards the cost of travel, and you get a 5% refund when making redemptions)
- I value Starpoints at 2.2 cents each, so the SPG American Express cards remain a great value
- Both cards have reasonable annual fees as well, which are waived for the first year
Beyond that, these are probably the two lowest risk points currencies out there. I can’t imagine the Barclaycard Arrival will switch from their “one point gets you one cent” model anytime soon, and similarly Starwood has so many airline transfer partners that even if one were to devalue, it wouldn’t drastically change the value of those points.
The Chase Sapphire Preferred® Card remains the best “all in one” card
Despite the devaluation, there’s still not really any card that can compete with the Chase Sapphire Preferred® Card:
- You earn 2x points on dining and travel (and while there are other cards that offer bonus points on airfare and hotels, for example, this card has a much more liberal interpretation of travel, as it includes parking, train tickets, etc.)
- The card has no foreign transaction fees
So for spend in a category that otherwise doesn’t accrue bonus points the Barclaycard Arrival or Starwood American Express Cards are still your better options, but that has always been the case. Every traveler should have a card with no foreign transaction fees, and the double points on dining and all travel expenses are pretty unique to the Chase Sapphire Preferred.
The Ink Cards have some of the most lucrative category bonuses out there:
- 5x points on spend at office supply stores, and on cellular phone, landline, internet, and cable TV services
- 2x points on spend at gas stations and on hotels
Everyone has to crunch the numbers for themselves as to whether they do enough spend on the cards to justify the annual fee, but whether the points earned are worth 1.6 or 1.8 cents doesn’t materially alter the value proposition of these cards, in my opinion.
For big spenders the Premier Rewards Gold Card from American Express can be very lucrative
In terms of the ability to earn points, the only American Express card that can compete with the Chase Sapphire Preferred is the Premier Rewards Gold Card, which offers the following category bonuses:
- 3x points for flights booked directly with airlines
- 2x points at US restaurants, US gas stations, and US supermarkets
If the annual fee were $90 lower I’d say it would be great competition for the Chase Sapphire Preferred for just about anyone.
For the average consumer, however, it’s probably not great beyond that.
So while these devaluations are discouraging and frustrating, for the most part you’re still better off accruing a points currency than cash back, unless you can tailor that to specific bonus categories as well.
I’m curious, what do you value Ultimate Rewards points at after all these devaluations?