Why Transferable Points Are So Valuable (Part 2: Redemption Value)

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In this part 2 of our article about why transferable points are so valuable, we cover redemption value and why transferable points can get you more value per point than airline miles or hotel points. In part 1, we talked about the incredible flexibility that transferable points currencies can offer. We also explained how that flexibility leads to more award space.

Redemption Value of Transferable Points

Calculating the redemption value for your points or miles is simple. Simply divide the cash cost of your booking by the number of points required for that same booking. For example, if a flight costs $200 but you book it for 7,500 points, your redemption value is $0.027 per point, or 2.7 cents per point (cpp). (This would be an excellent value, by the way.) Bottom line: the fewer points you use, the better your redemption value is going to be.

With access to dozens of transfer partners, transferable points give you the opportunity to always redeem your points for a high value. This is because transferable points enable you to take advantage of the best sweet spots with each airline or hotel. Through these sweet spots, you can use fewer points for award bookings. For example, by having Chase Ultimate Rewards (URs), Amex Membership Rewards (MRs), and Citi ThankYou Points (TYPs), you can:

The bottom line here is that transferable points offer access to countless redemption sweet spots. These sweet spots offer you the opportunity for high redemption value from your points. Curious about redemption values we've obtained for transferable points? Check out this article we wrote about our own valuations from prior years of travel: Click Here.

Other Ways to Generate High Redemption Value

Chase, Citi, and Amex offer transfer bonuses to their transfer partners regularly. These bonuses typically range between 20% and 40%. This means if you transfer 10,000 Chase URs, Citi TYPs, or Amex MRs to a transfer partner program during a transfer bonus, you would have anywhere from 12,000 to 14,000 miles with that transfer partner. Those are free points!

Also, each of the major banks have a few transfer partners in common. For example, Virgin Atlantic, Air France/KLM, Emirates, and Singapore Airlines are transfer partners for Chase, Citi, and Amex. This means earning points with those airlines is incredibly easy since you are essentially combining our URs, MRs, and TYPs. You can use whichever credit card earns you the most points per dollar on any purchase. You don't have to worry about which points currency you're earning, because you can transfer all of those currencies to those airlines.

Sign-up bonuses would make things even easier. Let's say you earned 100,000 points sign-up bonus under the current Chase Sapphire Preferred offer and 80,000 points sign-up bonus under the current Citi Premier offer. You would now have 180,000 points to use across dozens of airlines. That's more than enough for four roundtrip flights to Europe through some of the sweet spots we listed above!

Final Thoughts

With transferable points, you gain flexibility and high redemption value. With access to different transfer partners, you can opt for the partner that will give you the most value. Miles or points from a specific airline or hotel can still be useful in very specific situations. But when given a choice, earning transferable points is usually the better option.

Do you have questions about how to best redeem transferable points for your dream trip? Come join the discussion in our Facebook group to learn more!

 

Travel on Point(s) has partnered with CardRatings for our coverage of credit card products. Travel on Point(s) and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

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