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On Sunday I wrote a post about the best credit cards to use for airfare purchases. Reader 31583 left the following comment on the post:
Could you please explain why do you think that MR points worth 1.8 cents each? I guess you can’t. Anyway it looks like Citi Prestige Card wins. 3 points / dollar and up to 1.6 cents redemption value compared to Amex’s 1 cent is awesome. Nice post except you’re clearly promoting Amex despite it’s only comparable to the Chase Sapphire Preferred® Card.
This month I’ll be sharing my updated valuation of miles & points, though in the meantime I think the above is a question which is worth addressing. In the post about which credit card to use for airfare purchases, I explained that I value American Express Membership Rewards and Chase Ultimate Rewards points at 1.8 cents each, while I value Citi ThankYou points at 1.6 cents each. How do I come up with those valuations, in general?
Transferrable points are valuable due to their flexibility
Valuing points is somewhat of an arbitrary exercise, since everyone wants them for different reason and gets different value out of them. The way I see it, there are a few things factoring into the value of transferrable points, though:
- The value of the points for the programs to which you can transfer points (in other words, the value of Chase Ultimate Rewards points would be based on the value of points in Hyatt Gold Passport, Korean Air SkyPass, Singapore KrisFlyer, etc.)
- Some premium for the flexibility of the points, since you’re not tied into one specific program; in other words, if you valued the above individual points currencies at 1.5 cents each, it wouldn’t be unreasonable to value the transferrable points currency at slightly more, to account for the flexibility
- What options there are to redeem points as cash, either towards the cost of an airline ticket, travel package, merchandise, etc.
Citi ThankYou points are best for “cash” redemptions
I recently wrote a post about redeeming transferrable points currencies towards the cost of paid airline tickets. As I explained in the post, of the above three transferrable points currencies, Citi ThankYou points are absolutely the most valuable for non-mileage transfers.
That’s because Citi ThankYou points earned through the Citi Prestige Card can be redeemed for 1.6 cents each towards the cost of a paid ticket on American or US Airways (keep in mind you can combine ThankYou points, so you can potentially redeem other ThankYou points — like those earned through the Citi ThankYou® Premier Card — at that rate as well).
But I do still value ThankYou points less than Membership Rewards or Ultimate Rewards points. Why?
The number of useful transferrable partners matters
The reason I value Membership Rewards and Ultimate Rewards points more than Citi ThankYou points is simply because I think they have a wider variety of useful airline transfer partners.
Membership Rewards partners with Air Canada Aeroplan, ANA Mileage Club, Delta SkyMiles, Singapore KrisFlyer, etc., all of which are programs offering good redemption opportunities.
American Express Membership Rewards transfer partners
|AeroMexico Club Premier||British Airways Executive Club||Frontier EarlyReturns||Virgin America EleVAte|
|Air Canada Aeroplan||Cathay Pacific Asia Miles||Hawaiian Airlines HawaiianMiles||Virgin Atlantic Flying Club|
|AirFrance/KLM Flying Blue||Delta SkyMiles||Iberia Plus|
|Alitalia MilleMiglia||El Al Matmid||JetBlue TrueBlue|
|ANA Mileage Club||Etihad Guest||Singapore Airlines KrisFlyer|
Meanwhile Ultimate Rewards partners with Hyatt Gold Passport, Korean Air SkyPass, Singapore KrisFlyer, United MileagePlus, etc.
Chase Ultimate Rewards transfer partners
|Air France KLM Flying Blue||IHG Rewards Club||Singapore KrisFlyer||United MileagePlus|
|British Airways Executive Club||Korean Air SkyPass||Southwest Airlines Rapid Rewards||Virgin Atlantic Flying Club|
|Hyatt Gold Passport||Marriott Rewards||The Ritz-Carlton Rewards|
As far as I’m concerned, the single most useful Citi airline transfer partner is Singapore KrisFlyer. Aside from that there are certainly some programs with niche redemptions to be had, but across the board there simply don’t stack up, in my opinion.
Citi ThankYou transfer partners
|Air France/KLM | Flying Blue||Garuda Indonesia | Frequent Flyer||Qantas | Frequent Flyer||Turkish Airways | Miles & Smiles|
|Cathay Pacific | Asia Miles||Jet Airways | JetPrivilege||Qatar Airways | Privilege Club||Virgin Atlantic | Flying Club|
|EVA Air | Infinity MileageLands||JetBlue | TrueBlue||Singapore Airlines | KrisFlyer||Hilton | HHonors|
|Etihad | Etihad Guest||Malaysia Airlines | Enrich||Thai Airways | Royal Orchid Plus|
In the context of Ultimate Rewards, say I value Hyatt Gold Passport, Korean Air SkyPass, and Singapore KrisFlyer miles at ~1.6 cents each. I wouldn’t be opposed to valuing Ultimate Rewards points at 1.8 cents each, since they deserve some premium for not being tied to any specific currency.
My valuation of individual mileage currencies accounts to some degree for the holding costs, which is less of a factor when you have multiple (almost) equally useful currencies you can transfer points to.
In the case of Citi ThankYou points, I value them at ~1.6 cents each precisely because they only have one airline transfer partner that I consider most useful, and then the great option of redeeming the points for 1.6 cents each towards the cost of a ticket on American or US Airways. But not everyone is an American flyer, and therefore may not value that redemption as much.
As I’ve always said, valuing points is a highly subjective exercise. There’s no right answer, and it all comes down to your individual redemption patterns.
Will Membership Rewards points only be worth a penny each to some people, since that’s what you can redeem them for towards the cost of a paid airline ticket? Absolutely. But for me transferrable points currencies are most valuable for aspirational redemptions through mileage transfers, and not as cash towards the cost of a ticket.
So 31583‘s conclusion is perfectly reasonable, in my opinion, aside from thinking that I’m unfairly promoting American Express over Chase and Citi (I love all three).
Where do you stand on the value of transferrable points currencies? Am I off base for the method by which I’m assessing their value?