In other sections I have discussed the basics of how to earn free travel through credit card sign-ups. Now, we’ll begin to look at different types of points and miles to help you understand which programs are most valuable. This article will focus on flexible point programs. Other articles focus on airline miles and hotel points.
Flexible Points Programs
Almost every major credit card company has some form of a flexible points program. These are rewards programs where you earn points by using a credit card, and you can then redeem points for travel, merchandise, gift cards, or sometimes cash. The best of these programs allow points to be converted at a favorable rate to multiple airline and/or hotel programs. See: Transfer Partner Master List
Here is a brief description of the top programs:
Chase Ultimate Rewards
Chase has several credit cards that earn Ultimate Rewards: Freedom, Ink Plus, Ink Cash, and Sapphire Preferred. With most of these cards, points are worth exactly 1 cent each and can be redeemed for cash, gift cards, or gifts. With the Ink Plus and Sapphire Preferred cards, though, points are worth more because they can be used to book travel for 1.25 cents each or, better yet, can be transferred to various airline and hotel programs. When used wisely in this way, points can easily be worth 2 cents or more. It’s not at all unusual to get 4 cents value per point when used properly!
The other way in which the Ultimate Rewards program really shines is in the many opportunities to earn more than 1 point per dollar when using your card. For example both the Freedom and Ink cards offer various 5X bonus categories (where you earn 5 points per dollar instead of just one), and the Sapphire Preferred offers 2X for all dining and travel purchases. If you buy things online, you can do even better by logging into Shop Through Chase prior to shopping at your favorite websites. In this way you can earn even more points for purchases you planned to make anyway.
Note: Starting in the middle of 2015, Chase began denying anyone applying for Ultimate Rewards credit cards if they have opened 5 or more accounts across all banks in the previous 24 months. This rule seems to only apply to Ultimate Rewards earning cards and not Chase co-branded cards. For this reason, it’s probably a good idea to include the Chase Sapphire Preferred and Ink Plus cards in your earliest churns as laid out in the sample credit card plan.
The Ultimate Rewards program has a great combination of high value points and easy to earn points.
Best use of points
Transfer points to Hyatt and airline programs (United, Southwest, British Airways, etc.).
American Express Membership Rewards
American Express has a large number of cards that earn Membership Rewards points. The best of these is probably the Premier Rewards Gold Card which earns 3X for airfare purchases, 2X for US gas stations, US supermarkets and US restaurants, and 1X for everything else. Membership Rewards points can be used to book travel or to buy gift cards or gifts. In most cases when using points in these ways you will get 1 cent per point value or (usually) less. A much better use of Membership Rewards points is to transfer the points to airline miles. American Express allows you to transfer points to quite a few airline programs including Delta, British Airways, Frontier, and more. Sometimes they also offer a transfer bonus where each Membership Rewards point becomes more than one airline mile.
While I like the Membership Rewards program, points are not as easy to accrue as with Ultimate Rewards. Also, Chase has better airline and hotel transfer options. However, as I described above, it is still possible to get a lot of value from these points!
Best use of points
Airline award redemptions.
Barclaycard Arrival Miles
Barclaycard offers two versions of its Arrival card. (The Arrival & the Arrival Plus.) The Arrival Plus is the interesting version as it gives you two miles per dollar for all purchases. If you use those miles to pay for travel, Barclaycard gives you a 5% rebate. This means that this card effectively earns 2.1% on every purchase (as long as you redeem miles for travel expenses). Redeeming is very simple: shop for your flight, cruise, train or rental car on your own and pay with the Arrival card, then within 120 days you can redeem your Arrival miles as a statement credit to offset a purchase of $100 or more. In addition to being somewhat simple, this method of redemption has several other advantages: you earn airline miles for your flights, and you are not limited to flights with award availability.
Citi ThankYou Rewards
Citi has many different cards that earn ThankYou rewards points. When used for gift cards or merchandise, ThankYou points are worth just 1 cent each. When used to book airfare, though, points are worth 1.25 cents each if you have the Citi ThankYou Premier card, or 1.33 cents per point if you have the Citi Prestige card. When booking airfare on American Airlines, Prestige cardholders get a whopping 1.6 cents per point value! Alternatively, you can transfer points to airline and hotel programs.
At the time of this writing, Citi supports the following transfer partners: Asia Miles, EVA Air, Etihad Guest, Flying Blue (Air France / KLM), Garuda Indonesia, Malaysia, Qantas, Qatar, Singapore, Thai Airways, Virgin America, Virgin Atlantic and Hilton HHonors.
Citi offers many ways to earn ThankYou points through many different credit cards and they offer great value for redeeming points for airfare. The transfer partner list is quite limited, but Singapore and Air France offer some great value opportunities.
Best use of points
Use points to book flights (with the Citi Premier or Prestige card) or transfer to Singapore Airlines to fly Singapore Suites class!
Capital One Rewards
Capital One has a very straightforward program. They call their points “miles” and each mile is worth exactly a penny. Use your credit card for any travel expenses and then when the bill comes due, use your miles online to pay for those expenses. The best card for earning Capital One Rewards is probably the Venture Rewards card which earns 2 points per dollar.
Capital One has similar cards that earn cash instead of “miles”. Either way, the programs are straightforward. Two points (or cents) per dollar is a very respectable earning rate. To me, this translates into “solid, but boring”. I prefer the Chase Ultimate Rewards program because of the opportunities to earn much more than 2 points per dollar, and the opportunities to redeem for much more than 1 cent per point.
Best use of points
With a fixed value card like this, it doesn’t really matter how you use your points as long as you use them.
US Bank FlexPerks
US Bank has a few different FlexPerks cards with various bonus categories. As with other programs, FlexPoints are worth about a penny each when used for gifts or merchandise. When used for flights, points can be worth as much as 2 cents each depending on the cost of the flight. Flights costing $400 or less require 20,000 points. So, if you manage to find a flight for exactly $400, you’ll get the full 2 cents per point value. Of course, that’s not very likely, so expect to get between 1 and 2 cents value from your points.
It’s technically possible to do pretty well with this card by putting all spending in a 2X bonus category and then redeeming for just the right flights, in which case you could earn about 4 cents per dollar with this card. In practice, that would be very difficult to pull off, and if you’re willing to put all of your spend in one category, you can do better than 4 cents per dollar with some other cards.
Best use of points
Airfare at specific prices (close to $400, but not above; close to $600, but not above; etc.)
|Go to: Table of Contents - Credit Cards - Flexible Points Programs - Airline Programs - Hotel Programs - Earning & Managing Points - Miscellaneous