Why transferable points are worth more than other rewards

If you’re familiar with TPG’s valuations, you’ll notice American Express Membership Rewards points, Bilt Rewards points, Capital One miles, Chase Ultimate Rewards points and Citi ThankYou Rewards points consistently rank as some of the most valuable rewards.

You can earn these rewards with some of the best travel credit cards. But what makes these rewards particularly valuable is the ability to transfer them to various airline and hotel programs — hence why we refer to them as transferable rewards.

But, if you look at TPG’s valuations, you’ll notice you almost always “lose” value when transferring these rewards. For example, you can transfer Chase Ultimate Rewards points to World of Hyatt at a 1:1 ratio. But we value Chase points at 2 cents each and Hyatt points at 1.7 cents each, meaning you’d “lose” 0.3 cents per point with this transfer.

You might wonder why we value transferable rewards more than airline miles and hotel points. In this story, we’ll answer that question by discussing what makes transferable points valuable and why you should earn transferable points.

Diversify your exposure

American Airlines Flagship First 1A seat — I used 62,500 Etihad Guest miles in December to travel on American Airlines in Flagship First to Australia. Now, that award costs over 200,000 miles. KYLE OLSEN/THE POINTS GUY

With so many devaluations, it’s no secret that points and miles are a poor long-term investment. That’s why we don’t recommend hoarding points and miles. But if you want to build a stash of rewards for an upcoming trip, one of the best ways to protect yourself against devaluations is by earning transferable rewards.

This year alone, Alaska Airlines Mileage Plan, Etihad Guest and United Airlines MileagePlus have slashed sweet spots by significantly increasing award rates. Virgin Atlantic Flying Club also quietly devalued All Nippon Airways first-class awards shortly after the airline joined SkyTeam.

If you have a chunk of your points and miles in a single loyalty program, you stand to lose when these devaluations occur. But with transferable rewards, you can transfer to the program that has the most appealing award rates when you’re ready to book.

Access to many hotel and airline programs

Air France Boeing 777-300ER — An Air France 777-300ER. KYLE OLSEN/THE POINTS GUY

This is a straightforward concept. Transferable rewards give you more flexibility.

For instance, if you’ve been accruing Delta Air Lines SkyMiles on the Delta SkyMiles® Gold American Express Card, you’re limited to redeeming your miles within the SkyMiles program. If you need to fly from New York’s John F. Kennedy International Airport (JFK) to London’s Heathrow Airport (LHR) on a specific date and the flight is 100,000 Delta miles, that’s your redemption option.

On the other hand, if you’d been earning Chase Ultimate Rewards points with the Chase Sapphire Reserve, you could transfer your points to Air France-KLM Flying Blue, British Airways Executive Club or Virgin Atlantic Flying Club (all of which routinely have lower award rates). And if you found a one-way flight for $450, you could redeem 30,000 Chase points to book this flight through the Chase Ultimate Rewards portal.

TPG’s valuations peg the value of transferable rewards higher than the currencies of the airline and hotel programs you could transfer to since you have more flexibility with transferable points.

Transfer bonuses

Air France Boeing 777-300ER business class — You can book an 80,000-mile flight for 63,000 credit card points with a 30% transfer bonus. KYLE OLSEN/THE POINTS GUY

The major credit card reward currencies routinely offer transfer bonuses. You can transfer your points at a better ratio with a transfer bonus. Normally, these range between 15% and 40%; however, Bilt Rewards offered a 100% transfer bonus May 1 for Air France-KLM Flying Blue for Rent Day.

Depending on what’s available when you’re ready to book, a favorable transfer bonus may boost the value you can get from your transferable rewards. You might even get enough points or miles for premium economy seats if you transfer the rewards you’d typically need for economy seats during a transfer bonus.

Transferable points and miles

Lufthansa first class on an A340-600. KYLE OLSEN/THE POINTS GUY

Now you know why transferable rewards are more valuable than airline miles and hotel points. If you’re ready to add one or more of the best cards for earning transferable points to your wallet, here’s some information to consider about each of the major programs.

American Express Membership Rewards

Bottom line

With transferable credit card rewards, you can convert your hard-earned rewards into points and miles with various hotel and airline loyalty programs. By doing so, you can avoid losing value when one hotel or airline program devalues its rewards. And instead of being limited to a single airline or hotel program, you can explore a vast network of partners and choose the one that offers the most value and benefits for each redemption.

See Bilt Mastercard rates and fees here.
See Bilt Mastercard rewards and benefits here.