A guide to credit card point earning. Should you focus on a single program?


credit card point earningI earn millions of points and miles each year through credit card signup bonuses and manufactured spend.  My general approach is to go for the low hanging fruit.  I’ll snag those 50,000 to 100,000 point signup offers while I can.  And, I’ll max out easy 3X to 5X manufactured spend opportunities.  I prefer earning transferable points, but I’ll happily take other points and miles if the opportunity is good enough.

The advantage of this scattershot approach is that when it comes time to redeem points for travel, I can cherry pick the best opportunities.  Usually, one program or another offers the best value for a particular trip.  I almost always have enough points or miles in whatever program I need, especially considering that I have large balances of transferable points (Amex, Chase, Citi, and SPG).  For more about my approach, please see “The earn and burn fallacy.”

If you’re like me, and you earn huge numbers of points and miles through credit card signups and/or manufactured spend, then I recommend similarly diversifying your points portfolio.  When earning points, go for the low hanging fruit, but with a preference for transferable points ahead of points or miles from specific loyalty programs.  And when redeeming points, use the program that gives you the best value for your travel needs.

Everyone Else

Most people (and probably even most readers of this blog) do not sign up for credit cards often.  And, most never manufacture spend.  Instead, point earning is primarily through travel and regular credit card spend.  For this group, I recommend choosing a single points program (or cash back) for your credit card spend earnings.  Options include:

  1. Transferable points programs: Best for those who like to use rewards for luxury travel; and/or for travel deal-seekers interested in learning the ins and outs of various awards programs in order to always snag the very best award deals.  This is your best option for potentially getting extremely high value for your points.
  2. Fixed value points programs: Best for those who want to keep things simple: With a single credit card, earn high fixed-value rewards, and use those rewards for any travel.
  3. Cash back: Those who prefer to use rewards to buy gifts, pay bills, etc. will do better with a cash-back approach.  This could be a simple 1-card 2% back strategy, or a complicated multi-card strategy making use of category bonuses across multiple cards.

Transferable Points Programs

For those who are happy to earn rewards towards travel, especially international travel, I think that transferable points programs are the best option.  But, unless you earn huge numbers of points each year, you’re best off picking a single program to focus on.  Here’s a brief overview of the four main transferable points programs:

Chase Ultimate Rewards

If you travel and eat out often, it’s hard to beat Chase Ultimate Rewards.  The Sapphire Reserve Card offers 3X points for travel & dining.  And the Freedom Unlimited card offers 1.5 points per dollar everywhere.  Points earned on the Freedom Unlimited card can be freely moved to your Sapphire Reserve account to make them more valuable.  Sapphire Reserve points can be transferred to a number of airline & hotel programs or can be used at a value of 1.5 cents each when redeeming points for travel through Chase’s website.  By using both cards, you can earn 4.5% rewards for travel & dining purchases and 2.25% rewards everywhere else.  That alone is an excellent rate of return, but you can further increase rewards through other Ultimate Rewards cards such as the regular Freedom (which offers rotating 5X categories), and the Ink Cash Business card (5X categories), and the Ink Business Preferred card (3X categories).

Notable Transfer Partners: United, Southwest, Korean Air, Air France, British Airways, Singapore, Virgin Atlantic, Hyatt

Best for: Pretty much anyone who travels a lot; those who often fly United or Southwest; those who like to fly to Asia in business or first class (thanks to point transfers to Korean Air which tends to have great award availability); and those who like to stay at Hyatt properties (Unlike their other hotel transfer partners, Hyatt often offers great value for your points)

See also: The BEST travel rewards card.

Amex Membership Rewards

Amex Membership Rewards has a few advantages over Chase: More transfer partners, occasional transfer bonuses, more card options with great perks, and a few worthwhile category bonuses that beat Chase’s offerings.  On the negative side, Amex points do not transfer to valuable Chase partners such as Hyatt, United, or Southwest.  Plus, when transferring points to US based loyalty programs, Amex charges a small fee.  And, of course, Amex cards are not accepted in as many places as Visa or MasterCard.

Like Chase, Amex has great options for point earnings.  The best for many, in my opinion, is the Amex EveryDay Preferred Card which offers up to 4.5X at US grocery stores; up to 3X for gas; and up to 1.5X everywhere else.  If you shop at grocery stores a moderate amount and/or buy gas often, then this card should be in your wallet.  Note that in order to earn those high award rates, you need to make 30 or more purchases per billing cycle.

Another benefit that Amex has over Chase is the ability to save a lot of money through Amex Offers and Amex OPEN Savings.  With Amex Offers, Amex regularly offers automatic cash rebates for enrolling in various offers such as Spend $100, Get $20 at Staples; Get 20% Back at Sam’s Club; etc.  And, all Amex Business cards are automatically enrolled in OPEN Savings in which you can earn automatic cash back (or extra points — but I recommend going for cash back) for purchases at FedEx, Hertz, HP, and 1-800-Flowers.

Update: This offer for the Business Platinum card has expired. Please see our Best Offers page for a complete description of the current offer and benefits.

Maximizing value from Membership Rewards points is a bit more complicated than with Chase. Some of the best value transfer partners (ANA and Aeroplan, for example) require knowing how to avoid potentially huge fuel surcharges.  Unlike Chase though, Amex Membership Rewards points do transfer directly to Delta, and Delta sometimes offers very good value for your miles (see: Delta SkyMiles sheds SkyPeso moniker).  The other approach to maximizing value is to get the $450 Amex Business Platinum card (Expired) which offers 2 cents per point value when you pay with points for select airfare. Specifically, Get a 50% Pay with Points rebate for your selected airline, and for business or first class with any airline (see: Amex 50% bonus is a (minor) game changer . Here’s why…)

Notable Transfer Partners: Aeroplan, Air France, ANA, BA, Delta, Singapore, Virgin Atlantic

Best for: Moderate to heavy grocery and gas spenders; Delta flyers; Travel hackers; Deal seekers (thanks to Amex Offers and Amex OPEN Savings).

Citi ThankYou Rewards

Citi has fewer useful transfer partners than Chase or Amex, but it has a few advantages with respect to category bonuses. The Citi ThankYou Premier card offers 3X points for travel & gas; and 2X for dining and entertainment.  Points can be transferred to airline partners or redeemed for travel at a value of 1.25 cents per point.  Online shoppers should also consider the AT&T Access More card, which earns 3X ThankYou Rewards for online shopping and online travel purchases.  This card is no longer available for new signups, but many have had luck in calling to product change from other Citi cards (NOTE: If you’re interested in doing this, do it right away since the opportunity may soon be gone).

Notable Transfer Partners: Air France, Etihad, Singapore, Virgin Atlantic

Best for: Those who spend a lot on travel, gas, entertainment, and/or online shopping.

SPG (Starwood Preferred Guest)

SPG is really a hotel loyalty program, but one that happens to offer the ability to transfer points to airline miles at a terrific ratio (20,000 SPG points = 25,000 miles).  Points can be earned from staying at Starwood properties (Sheraton, W, Westin, St. Regis, etc.) or from the SPG credit card.  There are no credit card category bonuses (other than 2X earnings at Starwood and Marriott properties), but points are quite valuable when used either directly for stays, or when converted 1 to 3 to Marriott points, or when transferred to airline miles.  For more great uses of points, please see: Marriott SPG Complete Guide to Sweet Opportunities.

Notable Transfer Partners: Alaska, Air France, ANA, American, BA, Delta, Korean, Singapore, Virgin America, Virgin Atlantic, Amtrak

Best for: Those who prefer to keep things simple with just one card; those who like to stay at Starwood and/or Marriott properties; Travel hackers (thanks to having a huge list of transfer partners); Amtrak riders

Fixed value points programs

Many banks offer points that can be redeemed at a fixed value for travel.  The best of these have no foreign transaction fees and earn 2% in rewards, or more.  Here are a few examples:

  • BOA Travel Rewards: Earns 1.5% towards travel with as much as a 75% bonus for Preferred Rewards banking customers (which requires $100K in investments).  If you qualify for the 75% bonus, then this card earns 2.625% back in rewards for all spend.
  • Barclaycard Arrival+: Earn 2 points per dollar everywhere. Points worth 1 cent each when redeemed for travel, plus get 5% of points back.  So, theoretically, this card earns 2.1% back in rewards.  One major downside is that you can only use points to pay for travel of $100 or more.
  • Capital One Venture: 2 points per dollar everywhere. Points worth 1 cent each.

Best for: International travelers who want to keep things as simple as possible.  One card does it all.

Cash Back

Those who want to earn rewards beyond travel should consider sticking with cash back rewards cards.  Both Citi and Fidelity offer no-fee cards that offer 2% cash back everywhere (Citi Double Cash, and Fidelity Investment Rewards Visa).  Optionally supplement with a card that offers no foreign transaction fees (a Capital One cash back card, for example), and one or more cards with great category bonuses (see: Best credit card combos: Cash Back)

Best for: Those who want to use rewards for things other than travel.

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