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I’ve explained many times in the past how you’re best off accruing transferrable points currencies. They give you a lot more flexibility than “fixed” points currencies, as you can transfer them to any of a number of airline or hotel transfer partners.
The benefit is that you’re basically hedged against devaluations. If you collect points in a specific mileage program and they’re devalued, the value of your miles could decrease significantly overnight. However, with transferrable points currencies you aren’t really tied down to one transfer partner, so you’re more protected in the event of a devaluation.
But flexible points currencies don’t just have airline and hotel transfer partners, but in many cases you can redeem the points directly towards the cost of a paid airline ticket on any airline.
With that in mind, I figured I’d compare the rates at which you can redeem points with the three “big” bank-issued transferrable points currencies — American Express Membership Rewards, Chase Ultimate Rewards, and Citi ThankYou Rewards.
Here’s a quick rundown of the current situation:
- Citi ThankYou® Premier Card — each point can be redeemed for 1.25 cents towards the cost of an airline ticket
- Citi Prestige® Card — each point can be redeemed for 1.6 cents towards the cost of a ticket on American, or 1.33 cents towards the cost of a ticket on another airline
- Chase Sapphire Preferred® Card — each point can be redeemed for 1.25 cents towards the cost of an airline ticket
- The Business Platinum® Card from American Express OPEN — each point can be redeemed for 1.43 cents towards the cost of a ticket on a designated airline (see below for further explanation, as it’s not that straightforward)
- The Platinum Card® from American Express — each point can be redeemed for 1.0 cent towards the cost of an airline ticket
American Express Membership Rewards
While I value American Express Membership Rewards points at ~1.8 cents each, there’s no way to redeem those points for anywhere close to that amount for paid air travel.
If you have The Platinum Card® from American Express or The Business Platinum® Card from American Express OPEN then you can redeem Membership Rewards points for a penny each towards the cost of air travel.
For example, the below ~$410 roundtrip flight between New York and Los Angeles would cost you ~41,000 Membership Rewards points.
However, as of July 1, 2015, the business version of the card offers a 30% refund when you pay for air travel with points. However, that’s only valid for travel on a single airline which you designate each year.
When you factor in a 30% refund on redeemed points with The Business Platinum® Card from American Express OPEN, you’re really getting about 1.43 cents per Membership Rewards point. In the above example you’d be refunded ~12,000 Membership Rewards points, bringing the cost of the ~$410 redemption down to ~29,000 Membership Rewards points.
Redeeming Membership Rewards points through the business card for paid travel on a designated airline isn’t a terrible value when you factor in the 30% refund, but it’s still not how I’d choose to redeem points.
Chase Ultimate Rewards
Chase Ultimate Rewards, the currency issued by the Chase Sapphire Preferred® Card, is a bit more straightforward. Each point gets you 1.25 cents towards the cost of a travel purchase. So that same ~$410 ticket would cost you ~33,000 Ultimate Rewards points.
Personally I value Ultimate Rewards points at ~1.8 cents each, so it’s not how I’d choose to redeem them. However, it’s certainly better than the “standard” redemption rate offered when paying with Membership Rewards points.
Citi ThankYou Rewards
I value Citi ThankYou points at ~1.6 cents each. There are two main cards which accrue ThankYou points — the Citi Prestige® Card and Citi ThankYou® Premier Card. However, the points can only be redeemed at different rates towards the cost of travel.
Specifically, points earned on the Citi ThankYou® Premier Card can be redeemed for:
- 1.25 cents each towards the cost of a hotel, car rental, cruise, or flight
- 1.0 cent each towards the cost of a gift card
Meanwhile points earned on the Citi Prestige Card can be redeemed for:
- 1.6 cents each towards the cost of a ticket on American/US Airways
- 1.33 cents each towards the cost of a ticket on another airline
- 1.0 cent each towards towards the cost of a gift card
The great thing is that you can combine the points, so if you have both cards you can redeem the Citi ThankYou® Premier Card points at the Citi Prestige® Card levels.
Using the Prestige Card redemption rates, that same ~$410 ticket would cost you only ~25,000 Citi ThankYou points. That’s a heck of a deal, given that you’d earn elite qualifying and redeeming miles for that ticket, as it’s just like any other paid ticket.
Even for travel on airlines other than American, you’ll still get a pretty good return of 1.33 cents per point, which isn’t a bad redemption rate.
If you really want to redeem points towards paid airline travel…
In general if your goal is simply to accrue a points currency which can be used towards the cost of paid airline travel, then you might seriously want to consider the Citi® Double Cash Card. It’s a straight cash back card, which offers 1% cash back when you make a purchase, plus 1% cash back when you pay for that purchase.
That’s basically the equivalent of 2% cash back, which is tough to beat for a no annual fee card. And that’s cash, so you can redeem it however you’d like.
But there are still instances where you’d be better off with other cards when it comes to redeeming for paid travel, especially if you spend a lot in “bonused” categories.
For example, the Citi Prestige® Card offers 3x points on air travel and hotels, and 2x points on dining and entertainment. Since those points can be redeemed for 1.6 cents towards the cost of paid travel on American, that’s like getting a return of 4.8% on air travel and hotels, and 3.2% on dining and entertainment. That’s a pretty compelling return.
While I do think American Express Membership Rewards points and Chase Ultimate Rewards points are slightly more valuable than Citi ThankYou points (thanks to the more useful transfer partners), the Citi points are actually the ones that will get you the best return if you’re looking to redeem for paid travel.
While I’m typically a pretty “aspirational” traveler when it comes to earning miles, in the sense that I want to redeem for international first & business class, I sure do like being able to redeem Citi ThankYou points for 1.6 cents each towards the cost of paid travel on American.
Are there any transferrable points currencies that you redeem for paid travel? If so, which ones?