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Want to make the most of your credit card points? Don’t bother with subpar redemptions. Instead, you can maximize your credit card points by transferring them to partners! While card companies will try and tempt you to use up your points through them. Either by booking travel directly or using your points to pay off your balance, it is seldom a good deal. The most you can leverage your points for will be around 1.5 cents per point at a push. On the other hand, read on to find out how by transferring to partners, you can leverage your points for multiples of that.
Maximize your Credit Card Points Balance.
There are five major points currencies around today, and you can use credit card spending for everyday items to build your balances and get closer to your next travel rewards goal. The five main currencies are:
- American Express Membership Rewards.
- Chase Ultimate Rewards.
- Citi ThankYou Points.
- Capital One Miles.
- Marriott Bonvoy Points.
Marriott Points stand out because they belong to a hotel program. In contrast, the other 4 belong to a financial institution (in fact, both Chase and American Express issue Marriott co-branded credit cards). While you can earn all 5 points through regular credit card spending, you can also boost your Marriott points balance through staying at their properties.
There are multiple cards that earn points for each currency. Earning rates and various perks and benefits vary from card to card. Choosing which card or stable of cards is the right mix will depend on your spending patterns and travel rewards goals.
Read More: Maximize your travel Rewards for Business and Personal spending.
Some of our favorite cards include:
A star performer and one of the best all-around travel rewards credit cards on the market. The American Express Gold Card delivers a perfect balance of earning rates, other perks, and a mid-level annual fee. Features of the card include:
- Earn a welcome bonus of 60,000 Membership Rewards points bonus when you spend $4,000 on eligible purchases in the first 6 months of card membership.
- Earn 4X at restaurants, including delivery and take out, and earn 4X at US supermarkets up to $25,000 per calendar year. Earn 1X after that.
- Earn 3X on flights booked directly with the airline or with amextravel.com
- No foreign transaction fees.
- $250 annual fee.
This is by no means the end of the story with the American Express Gold Card, and it also has a host of benefits with Uber. When it comes to dining, the card is virtually industry-leading and should be your go-to card when eating in or out!
The Chase Sapphire Preferred came on the scene several years ago with a huge splash. The card set the benchmark for mid-tier cards for years to come. Currently, it offers benefits on multiple levels with great earning rates, great ancillary benefits for a very reasonable $95 annual fee. Features of the card include:
- Receive a 6,000-point welcome bonus when you spend $4,000 in the first 3 months of card membership.
- Get a $50 annual Ultimate Rewards Hotel Credit.
- Earn 5X points on travel purchased through Chase Ultimate Rewards(R)
- Earn 3X points on dining
- Earn 2X points on all other travel purchases
- Earn 1X on everything else.
- No foreign transaction fees.
- $95 annual fee.
- Through March 2022, earn 5X on Lyft Rides.
A relative newcomer to the market, the Capital One Venture Rewards Credit Card is an ideal mid-tier or starting card. The Capital One program has a large number of transfer partners, and it seems it is constantly expanding its offering and improving its transfer ratios. Features of the card include:
- Earn a 60,000 Capital One Miles bonus when you spend $3,000 in the first 3 months of card membership.
- Earn 2X on all purchases across the board.
- Earn 5X miles on hotels and rental cars booked through Capital One Travel.
- Receive a $100 statement credit every 4 years to use towards Global Entry or TSA PreCheck(R).
- Transfer your miltes to 15+ travel loyalty programs.
- No foreign transaction fees.
- $95 annual fee.
Redeeming Points Directly Is Poor Value
Many card issuers will offer you an “enhanced” value to redeem your points against travel purchases. Typically points can be redeemed for anything in between 1.25 cents per point for mid-level cards like the Chase Sapphire Preferred to 1.5 cents per point for premium cards like the Chase Sapphire Reserve.
Card issuers typically offer you a couple of ways to redeem your points for these values. First, through their own travel portal where you can purchase travel directly using points. Or by offsetting the cost of a ticket you purchased using your points.
A simple example of this is to imagine you are redeeming your points for a $1,000 airline ticket, and the redemption rate is 1.25 cents per point. This airfare would set you back 80,000 points. Would you be able to book a flight like this for less than 80,000 points? The answer in almost every case is yes.
Still unsure? Here is a quick off-the-shelf example. If you want to book a flight from New York JFK to Frankfurt FRA with Lufthansa in business class, it will set you back a ton of cash. We looked and found direct flights for $3,152.20.
That is a typical price for a transatlantic business class fare. If you then tried to use your points to offset the cost of the flights at a ratio of 1.25 cents per point, you would end up paying an eye-watering 252,176 points. This is horrific value, and you can do so much better with your points. Especially if you have American Express Membership Rewards points, Citi ThankYou points, or Capital One Miles.
A simple amount of research should point in the direction of the Avianca LifeMiles program. The loyalty program is a transfer partner for every significant point currency around except Chase Ultimate Rewards. Transfers from the three programs above typically occur at a ratio of 1:1 and are quick if not instantaneous in most cases.
Avianca is a member of Star Alliance, so you can book Lufthansa (another Star Alliance member) awards through LifeMiles. The million-mile question now is, can you book the same journey by transferring your points to Avianca and booking a partner award, and will it be better value?
The answer is yes! A quick search for award space on Avianca LifeMiles. You can book a one-way award on Lufthansa to/from JFK to Frankfurt for 63,000 miles plus $24.70 in taxes and fees.
That is an enormously better deal than redeeming your points directly. Comparing the cash price of the ticket to 63,000 miles yields a rate of 5.0 cents per point. That is four times the value of redeeming through your card issuer for 1.25 cents per point, and even better if your issuer only allows redemptions at 1 cent per point.
There Are Sweet Spots Everywhere
The above example is not a stand-out one! In fact, it could easily be considered a typical sweet spot when it comes to transferring your credit card points to maximize their value. When you compare the cash price of tickets to the cost in points and miles of awards, it is easy enough to regularly find values in the range of 5 to 8 cents per point.
While sweet spots normally exist, sometimes the points and miles gods are smiling on you, and you can stumble across a transfer bonus. Issuers regularly run promotions offering you a bonus for transferring your points to a partner hotel or airline program. Typically, the bonuses are in the region of 25% to 50% and are time-limited. If you can dovetail your award search with a transfer bonus, you have hit the awards jackpot and can really leverage every last ounce of value out of your points!
Regardless of which credit card points you hold, there will always be options for you to transfer them to travel partners and maximize your value. The one thing to remember is that no matter how hard they try and tempt you to redeem your points directly for travel rewards without transferring them, resist! In almost every case, you will maximize your value by transferring your points to a travel partner!