Earning credit card points and miles is a good feeling. But the real thrill is using points for incredible experiences.
Today you’ll learn how to best redeem credit card points for travel.
In this beginners guide to redeeming points for travel we’ll cover:
- Why travel offers the best value for redeeming points
- How to maximize redemptions inside of the big three credit card reward programs (Chase, American Express, and Citi)
If you’re just getting started with using credit cards for their rewards benefits, I recommend taking a few minutes to read my primer on how credit cards work.
Why redeem credit card points for travel?
Travel isn’t the only option for redeeming rewards. Other options include cash back, statement credit, and gift cards. Some reward programs allow you to buy an actual product like a TV or camera.
With the above options, points are worth about 1 cent. For example, 10,000 points are worth $100 in statement credit.
When redeeming points for travel, you can get upwards of 3 to 5 cents of value per point. It’s not unheard to book awards at 7 to 10 cents of value per point.
One of my favorite redemptions was a first class flight from Chicago to Buenos Aires for 50,000 Avios points on American Airlines. This flight would cost me well over $5,000.
In theory, say you earn 2 points for every dollar you spend. Redeeming those points at a value of 7 cents per point is like earning 14% back on your spending that can go towards travel.
One thing to keep in mind here is opportunity cost.
$1,000 in cash might be worth more to someone than $2,000 to spend on travel. That may be the case if you say you need $1,000 of car repairs to drive to work or pay off credit card debt.
But for most people redeeming credit card points for travel is the highest value option.
This post is part of a mini-series on travel hacking. You can get the entire free series, delivered in order, by entering your email address below.
How to maximize points inside of the big three credit card reward programs
When it comes to earning rewards, there are two primary methods:
- Credit card loyalty programs
- Airline & hotel loyalty programs
A lot of the best reward redemptions are had through hotel and airline loyalty programs. Yet, the best way to earn rewards is through credit card loyalty programs. e.g. Chase, American Express, Citi.
The best strategy is to then transfer the points you earn from a credit card rewards program to an airline or hotel program of choice.
The advantage of earning rewards like this is flexibility.
This isn’t a rule you adhere to 100% of the time. However, for beginners it’s a great place to start and simplifies things a lot.
There are three major credit card programs that stand out when it comes to redeeming points for travel.
- Chase Ultimate Rewards
- American Express Membership Rewards
- Citi ThankYou Points
Here’s a rundown of each.
Chase Ultimate Rewards
Chase has an outstanding rewards program with Chase Ultimate Rewards, and also offers two of the best rewards travel credit cards on the market: the Chase Sapphire Reserve and Sapphire Preferred. (Read my in-depth review and comparison of the two cards.)
Current airline partners include:
- Aer Lingus AerClub
- British Airways Executive Club
- Flying Blue
- Iberia Plus
- Singapore Airlines KrisFlyer
- Southwest Airlines Rapid Rewards
- United MileagePlus®
- Virgin Atlantic Flying Club
Current hotel partners include:
- IHG® Rewards Club
- Marriott Rewards®
- The Ritz-Carlton Rewards®
- World of Hyatt®
This array of transfer partners covers just about every travel goal.
Beyond transferring to partners you can book travel through the Chase Travel portal.
With the Sapphire Preferred or Ink Business Preferred, points are worth 1.25 cents a piece when booking travel through the portal. With the Chase Sapphire Reserve, however, points are 1.5 cents apiece.
This may not sound like much but there are a few situations where this comes in handy:
- Tight award space. Award space on flights and hotels during peak season can be hard to find. By booking through Chase, you open up more options.
- Gives you access to a greater number of hotels. Not every hotel has a loyalty program. The Chase travel portal offers many independently operated or smaller hotel chains.
- Pay with points + cash. Just want to use some but not all your points? You can decide how many points you want to pay with, then pay the rest with cash.
Other benefits of earning Chase Ultimate Rewards points:
- You can transfer points between different Chase cards you personally have, e.g. the Chase Freedom to Sapphire Reserve.
- You can transfer points between personal and business accounts, e.g. Chase Ink Business Preferred to Sapphire Reserve.
- You can transfer points from one account within your household, e.g. one spouse’s Chase Freedom to the other spouse’s Chase Sapphire Reserve.
If you make earning Chase Ultimate Rewards points your top priority, you won’t regret it. The rewards are extremely easy to use and very flexible.
As for the best way to earn points inside of Chase Ultimate Rewards, there are a few credit cards to check out:
- Chase Sapphire Preferred
- Chase Sapphire Reserve
- Chase Ink Business Preferred
American Express Membership Rewards
Next up is American Express Membership Rewards.
With 16 airline programs and 3 travel hotel programs, American Express Membership Rewards gives travel hackers great flexibility.
While American Express offers a travel portal like Chase, high value redemptions are harder to find. As such, your best option is transferring points to one of the programs above. Make sure to read the fine print. Not all partners are a straight 1:1 transfer, some are more and some are less.
For example, you can currently transfer American Express Membership Rewards to Hilton at a 2:1 ratio. So, for every 10,000 points you transfer you’ll get 20,000 Hilton Honors Points (which can be quite valuable).
One thing nice about American Express is that they have a fair amount of quality welcome bonuses available.
Other things to know about American Express Membership Rewards:
- You can keep your rewards as long as you have one active American Express card. This includes no-annual-fee cards.
- There is a once in a lifetime welcome bonus for each card,
- All your points will be combined into a single account. However, you can not transfer points between accounts in the same household (as you can with Chase).
American Express has multiple high welcome offers available right now. More so, some cards can get up to 5X points per dollar spent in certain categories.
Citi ThankYou Points
While not as popular as Chase and American Express, Citi ThankYou Points are a valuable transferable currency.
Citi’s travel partners include:
- Air France
- Asia Miles
- Avianca LifeMiles
- Etihad Guest
- EVA Air
- Garuda Indonesia
- Malaysia Airlines
- Singapore Airlines
- Thai Airways
- Turkish Airlines
- Virgin Atlantic
To be eligible to transfer points you must hold the Citi Prestige or Citi ThankYou Premier credit cards.
Citi also has a travel portal that works similar to Chase’s. Specifically, the more premium Citi Cards you hold, like the Premier or Prestige, the better the value.
Other things to know about Citi ThankYou Points:
- You can combine points from lower tier cards to higher tier cards like the Premier or Prestige
- Sign up bonuses tend to come and go with Citi, so make sure to compare often the latest offers.
- Citi has consistent bonus promotions for transferring points to certain travel partners
Overall Citi ThankYou Points have a reputation for being a bit harder to find a great deal. As such, there’s a few options on Citi I will highlight:
- Singapore KrisFlyer, a member of the Star Alliance Network, allows you to book flights on United from the US to Hawaii cheaper than going through United
- Using Etihad miles, you can book flights on American Airlines at sometimes a lower value than going through AAdvantage
- Virgin Atlantic is a good program for those who travel a lot inside the U.S.