Need more air miles for an upcoming flight? Perhaps some hotel points to redeem for a few free nights?
Then DO NOT put your everyday spend on an airline or hotel credit card (at least not in most cases).
The reason is that those cards often don’t provide a very good return on the purchases you put on them. Moreover, you’re stuck earning one kind of currency.
Yes, you can usually use air miles to pay for a hotel stay or rental car with that airline’s partners, but the the redemption rate is quite bad (i.e. you’ll need more air miles to cover a $300 car rental than you would for a $300 flight).
Plus, what if you had been working toward saving 50,000 United Airlines miles for a trip from A to B, but then later realize Southwest Airlines flies the same route for only 40,000 Rapid Rewards points? Since both United and Southwest credit cards earn 1 mile per dollar for the majority of purchases, that’s an extra $10,000 you’d have to spend on the United card that you wouldn’t have to on the Southwest card).
Even worse, a lot of those airline cards offer 2X miles per dollar only when you purchase an air ticket with them, then 1X miles per dollar on everything else (compare that to 2X points on ALL TRAVEL like flights from any airline, hotels, rental cars, cruises, parking, tolls, etc. AND 2X on restaurants & bars with the Chase Sapphire Preferred or Citi ThankYou Premier cards…way better!).
That’s why I generally recommend using credit cards that earn transferrable points. That is…
- Chase cards that earn Ultimate Rewards (UR) points (only Sapphire Preferred, Sapphire Reserve, and Ink Preferred cards provide access to transfer partners. The no-fee cards do not, but the points from those cards can be combined with these 3 cards.)
- Citi cards that earn ThankYou (TY) points (only the ThankYou Premier and ThankYou Prestige cards provide access to the full range of Citi’s transfer partners. The ThankYou Preferred and AT&T Access cards only provide transfers to JetBlue and Sears.)
- Amex cards that earn Membership Rewards (MR) points (all Amex cards earning MR points have full access to transfer partners)
Transferrable points means you can convert them into the miles / points of any of the partner programs that are associated with that bank’s program (e.g. Convert 30,000 Chase UR points directly into 30,000 Hyatt hotel points or 30,000 Southwest Rapid Rewards points).
All the transfer partners (as of Nov. 12, 2017) are listed below for each program. You can often transfer at a 1:1 ratio, but certain programs have different conversion rates that can be seen when you log into your account.
So THAT is the big secret —> Get a card that gives you a generous return on your everyday spend and make sure it has access to transfer partners that you personally value and can use.
It’s a great thing to have access to a 10+ programs with one card and one point system; it’s a diverse point portfolio without any extra work.
That way you can transfer your points to whichever program works best for your upcoming trip. And yes, on top of all that, those points are also flexible; you can redeem for cash back, gift cards, and more (though you’ll usually get more value per point if you redeem for travel).
CLOSING NOTE: The airline and hotel cards are good for their signup bonuses and for ongoing perks like free checked bags, preferred boarding, achieving hotel elite status to get room upgrades and more points per stay, etc. Get them for that big bonus, and keep them if you value the added benefits, but in most circumstances they’re not ideal to use for your day-to-day purchases.
Earn fast and travel more! ✈️👍