When does it make sense to spend on a cobranded credit card?

Editor’s note: This is a recurring post, regularly updated with new information and offers.

There are many benefits to using transferable points like Chase Ultimate Rewards points over using a specific airline or hotel currency, including flexibility, flexibility and… flexibility. You’ll get more value out of your points when you can pick which partner within a single alliance to transfer to and when you can explore alternate routings if there’s no award availability on your first-choice itinerary. And you can even decide whether to redeem your points for flights or hotels.

It should come as no surprise then that over half of TPG’s top travel rewards cards earn transferable bank points instead of individual airline or hotel points.

Still, that doesn’t mean there’s no value to be had in cobranded airline and hotel cards. While I put the majority of my spending on cards like the Chase Sapphire Reserve® and Chase Freedom Unlimited®, there are a number of times when it makes sense to use a cobranded card over a more flexible alternative.

Here are the times I reach for a cobranded card rather than a transferable points earner.

Acquire hard-to-earn miles

While Chase Ultimate Rewards points and Amex Membership Rewards points give you combined access to well over 20 hotel and airline transfer partners, not all miles can be easily earned from transferable cards. A prime example of this would be Alaska Mileage Plan miles. TPG’s August 2024 valuations peg them at 1.55 cents each, just slightly below flexible Chase and Amex points (at 2.05 and 2 cents each, respectively). They earn this high mark because of the incredible sweet spot redemptions they can help unlock, including US-Asia in JAL or Cathay Pacific business class for only 75,000 miles one-way.

The only points that can be transferred to Alaska are Bilt Rewards Points and Marriott Bonvoy points, and you’ll come out ahead by spending directly on the Alaska Airlines Visa Signature® credit card. This card happens to be offering a limited-time offer of Buy one ticket, get one for just the taxes and fees ($0 fare plus taxes and fees from $23) and 50,000 bonus miles after spending $3,000 or more in purchases within the first 90 days of opening your account. This bonus is worth $775 based on TPG’s August 2024 valuations, which will get you more than halfway toward a luxury flight.

Speaking of Marriott points, they fall into a bit of a gray area in terms of terminology. While Marriott cards are “cobranded” (even though they are issued by Chase or Amex, they earn hotel points), those points are highly flexible and can be transferred to a whopping 45 airline partners. These cards are no longer as valuable as they used to be for everyday, non-bonus spending.

However, if you have a specific redemption in mind, like a dream flight in Emirates first class or an overwater bungalow somewhere far away, it might make sense to sacrifice an overall higher earning rate in order to earn the specific points you need.

Earning a welcome bonus

In addition to annual fees, credit card issuers make a large chunk of their profits off interchange fees (swipe fees) and are constantly looking for ways to incentivize you to use your cards more. With cobranded cards, this often takes place in the form of welcome bonuses for new applicants.

Most cards offer a large welcome bonus if you spend a certain amount within a specified period of time. For example, the United℠ Explorer Card offers 50,000 bonus miles after spending $3,000 within the first three months.

This bonus is worth $675 based on TPG’s August 2024 valuations and can get you a Polaris business-class ticket to select destinations around the world.

If you have a large purchase coming up, you can open a new cobranded credit card and use the purchase to help you earn a stash of points or miles that could take years to earn through everyday spending.

Travel perks

Outside of welcome bonuses, one of the best reasons to keep cobranded credit cards open long-term is because of the brand-specific perks they offer. For cobranded hotel cards, this might be an anniversary-free night or elite status. For cobranded airline cards, these can include free checked bags and priority boarding with the airline. Many cobranded cards link these perks directly to your loyalty account, but for some, you actually need to charge your travel to the card to earn them. United, for example, generally won’t honor the first free checked bag that comes with the United Explorer card if you book your ticket with a different card.

Of the several airline credit cards that offer discounts on inflight purchases, all of them specify that you must use that specific card to receive the discount. A 20-25% discount handily beats the return you’d get from a flexible travel card like the Chase Sapphire Reserve, which comes out to 6.15% (3 points per dollar worth 2.05 cents each).

Another example of a good time to put spending on a cobranded card is when you need to spend to reach a free night reward or elite status. For example, the Hilton Honors American Express Surpass® Card card offers a free night after spending $15,000 in a calendar year.

GRAND WAILEA, A WALDORF ASTORIA RESORT/HILTON

Keep in mind that this is a large chunk of spending, and for most of us, it would require careful planning throughout the year to reach. It’s important to consider the opportunity cost of putting that spend on a single card, and if you’re chasing status, how much value you’ll get if you aren’t able to qualify organically.

Better earning rates at hotels

Most airlines cobranded credit cards offer measly double points on flights booked with that specific airline, and you can easily do better with a card like the Chase Sapphire Reserve or The Platinum Card® from American Express. But cobranded hotel credit cards offer much higher earning rates, and can end up being the most valuable way to book your stays.

To keep things simple, I’ll compare all of these cards to the Chase Sapphire Reserve and its 6.15% (3 points per dollar) return on hotel bookings (it offers 3 points per dollar on travel, which includes hotels). The chart below shows how rewarding hotel credit cards can be when used for stays at that specific chain.

Credit Card	Points Earned at Hotels (% return)
Hilton Honors American Express Aspire Card*	14 points per dollar (8.4%)
World Of Hyatt Credit Card	4 points per dollar (6.8%)
IHG One Rewards Premier Credit Card	10 points per dollar (5%)
Marriott Bonvoy Boundless® Credit Card	6 points per dollar (5%)

Returns are calculated based on TPG’s August 2024 valuations.

The information for the Hilton Honors American Express Aspire card has been independently collected by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

By not using the Sapphire Reserve, you would be sacrificing some perks like travel insurance, but the increased rewards might make it worthwhile. Even the Marriott cards (all of which earn 6 points per dollar at Marriott hotels) can be a better value than the Sapphire Reserve. While TPG ‘s August 2024 valuations peg those points at 0.6 cents each, it’s easy to get several times more value than that if you’re transferring to airline partners for premium cabin rewards.

Keep rewards from expiring

One problem with travel rewards (that’s especially difficult for frequent international travelers) is keeping track of small mileage balances in different accounts and preventing them from expiring.

A person using a computer while holding a credit card — JUSTIN PAGET/GETTY IMAGES

Most airlines simply require you to have some kind of mileage activity every 1-2 years (terms vary by program), and so when someone’s miles are about to expire, I’ll often hear people suggest transferring the minimum 1,000 points from Chase or Amex to keep the miles active. This certainly works, but if you aren’t planning on using the miles anytime soon, you’ve just wasted 1,000 valuable miles that could have been used elsewhere.

A far simpler option, if you have the right cobranded card, is to simply walk into a convenience store and buy a pack of gum or any other small purchase. You’ll earn a few miles on your statement, which should be enough to reset the expiration date on your loyalty account. Just keep an eye on your calendar and make sure your statement will close/your miles will post before the expiration date.

Bottom line

We don’t recommend building your rewards strategy on a cobranded card foundation, but there are scenarios where they can be useful even outside of the welcome bonus. You’ll find more generous perks and bonus categories with flexible points cards, but cobranded cards can offer uniquely valuable rewards at the specific airline or hotel that issues them. If you have loyalty to a single airline or hotel, engaging directly with their individual credit cards can help increase your returns.