Maximizing Transferable Credit Card Rewards: A Comprehensive Guide

Unlock the potential of transferable credit card rewards with our comprehensive guide. Learn to maximize value and choose the best rewards for you.

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• Credit card rewards come in all types, from cash back, airline miles, and hotel points. 
• Transferable points are the most flexible because you can redeem them in so many different ways.
• Transferring points to airline and hotel loyalty programs is the best way to get the most value.

Introduction to Transferable Credit Card Rewards

Among people well versed in rewards credit cards, there's a bit of common knowledge: Not all rewards points are created equal. That's because even though different cards offer "points" or "miles" for every dollar you spend, those points can be very different things, with very different values.

Each bank and frequent flyer program has its own rewards currency that can be used in various ways. That makes it complicated when it's time to choose a credit card. Two cards could offer double points on purchases, but those points could be good for very different things — and one set of rewards could be a lot more valuable than the other.

Let's unpack why transferable points are the most valuable rewards you can earn.

What Are Transferable Rewards?

With some credit cards, you can transfer the points you earn through your everyday spending to airline and hotel partners. These rewards are called transferable points.

A few banks and rewards programs offer transferable points, but arguably the two most robust are Chase Ultimate Rewards® and American Express Membership Rewards. The other notable programs are Citi ThankYou Rewards and Capital One miles.

For example, if you're using Chase cards that earn the bank's Ultimate Rewards points, you can transfer those points to any of 11 airline frequent flyer programs and three hotel loyalty programs. The Ultimate Rewards program's airline partners include carriers in all three of the major airline alliances, which effectively means that you can book frequent flyer tickets — also known as "award flights" — on most airlines.

How to Transfer Credit Card Rewards

Understanding Transfer Ratios

In many cases, it can be better (read: cheaper) to book flights through an airline's frequent flyer program instead of exchanging points for cash back and using that money to buy plane tickets, or exchanging your points for a statement credit to "erase" travel purchases.

Cash prices for flights change all the time thanks to complicated airline pricing algorithms. When you exchange points for cash or as a statement credit, generally the best return you can get is 1 cent for each point applied toward the price of the ticket when you booked it.

Maximizing Points on Ticket Prices

In many cases, award ticket pricing is different, with the disclaimer that each airline's system varies significantly. For this example, let's focus on United Airlines — a partner of Chase's Ultimate Rewards program — and the way that its MileagePlus frequent flyer program works.

Let's say you wanted to travel round-trip from Chicago to Munich, Germany. That ticket could cost more than $1,200 depending on which month you travel.

If you exchanged your Chase Ultimate Rewards points for cash to purchase the ticket, or if you wanted to use fixed-value points worth 1 cent each — such as miles you can earn with the Capital One Venture Rewards Credit Card — you would need 120,000 points/miles to cover the whole trip.

However, if you transferred your Chase Ultimate Rewards points to United, you could potentially book the same flight for half as many points.

The lowest-level award ticket from the mainland US to anywhere in Europe only costs 30,000 MileagePlus miles each way, or 60,000 total for a round-trip. That saves you a ton of points, or means you can afford the trip sooner. The difference is even starker if you want to fly in business or first class, something that might be completely unattainable with cash, but doable with points.

To use the same United Airlines example between Chicago and Munich, a business-class ticket on this route starts at around $4,600 round-trip. That would cost 460,000 fixed-value points, or points exchanged for cash back, if you wanted to use them to "erase" the purchase from your statement.

However, a business-class saver ticket (if you can find saver availability — it's typically scarce) starts at 60,000 miles each way, or 120,000 miles round-trip for the same exact flight — a quarter of how many miles or points you would have needed with cash back or a statement credit.

Bank Travel Portals

The catch is that most airlines only make a few saver-level tickets available for each flight — and they make them available at various points before traveling — so you may not be able to find saver seats right away. Also, it's possible there will be a time when the cash price of a coach ticket in the above example is less than $600.

In that case, transferring your points to United and getting a saver-level round-trip for 60,000 miles is actually not the best deal. Fortunately, Chase gives you another great option to redeem points for travel in those cases.

Chase operates a travel-booking service as part of its Ultimate Rewards website. If you use the Chase Travel portal — either online or by phone — to purchase airline tickets or make hotel reservations, you get 1 cent per point in value when you have no-annual-fee cards like the Chase Freedom Flex℠ or Chase Freedom Unlimited®.

But when you have the Chase Sapphire Preferred® Card or Ink Business Preferred® Credit Card, you get a 25% bonus in value. In other terms, instead of each point being worth 1 cent, they're worth 1.25 cents. That means that if you were looking at a $600 flight from Chicago to Munich, you would only need 48,000 Chase points, fewer than you would need for a saver ticket if you were to transfer the points to United.

Even better, if you have the Chase Sapphire Reserve®, your points are worth 1.5 cents each (50% bonus) when you redeem them through Chase Travel — the same ticket above would only cost 40,000 points.

American Express doesn't offer fixed bonuses when using points to book travel through the Amex Travel portal, but there are occasional promotions or bonuses for certain flights.

Choosing the Right Card for Transferable Rewards

The best transferable-point credit card for you depends on what credit card rewards program is most appealing. Make sure to research the transfer partners and redemption options available with each. Below, you'll find some of the top options with each major program.

American Express Membership Rewards

American Express issues personal and small-business cards that earn Membership Rewards points. Here are the personal options:

And these small-business cards earn Membership Rewards points:

Chase Ultimate Rewards

Similarly, Chase issues personal and small-business cards that earn transferable points:

If you have one of the cards listed above, you can combine your points from no-annual-fee Chase cards (including the Chase Freedom Flex℠, Chase Freedom Unlimited®, Ink Business Unlimited® Credit Card, and Ink Business Cash® Credit Card) and unlock the ability to transfer them to airline and hotel partners, or redeem them at a higher rate through the Chase Travel portal.

Citi ThankYou Rewards

There's only one Citi credit card currently available to new applicants that comes with the ability to transfer points to Citi's airline and hotel partners. The Citi Premier® Card is offering an excellent welcome bonus of 60,000 bonus ThankYou® points after you spend $4,000 in purchases within the first three months of account opening (worth around 96000 in travel, based on our valuation of Citi points).

You can also transfer points to partners with the Citi Prestige® Card, but it's no longer taking applications.

As with other issuers, if you have either of the cards listed above and also have no-annual-fee Citi ThankYou cards, like the Citi® Double Cash Card, Citi Custom Cash℠ Card, or Citi Rewards+® Card, you can pool your points in your Citi Premier® Card or Citi Prestige® Card account, then transfer them to partners.

Capital One Rewards

There are personal and small-business Capital One credit cards that earn flexible miles:

Note: If you have one of the cards mentioned in the tables above, you can convert cash back earned from Capital One cash-back cards, like the Capital One Savor Cash Rewards Credit Card† or Capital One Quicksilver Cash Rewards Credit Card, into Capital One miles through the "Share My Rewards" feature in your online account. You'll get 1 Capital One mile for every 1 cent you transfer.

FAQs

What makes transferable credit card rewards valuable?

Their flexibility and potential for higher value when transferred to airline and hotel partners, compared to redeeming directly through the credit card's rewards portal.

Can transferable rewards be reversed once transferred?

No, once points or miles are transferred to a loyalty program, the transfer is typically irreversible.

How do I choose the best transfer partner?

Consider factors like the transfer ratio, the partner's redemption value, and any ongoing promotions that might increase the value of transferred points.

Are there fees associated with transferring rewards?

Some programs may charge a fee for transfers, while others offer this as a complimentary benefit of the rewards program.

How often can I transfer my credit card rewards?

Transfers can usually be made as often as you like, subject to the minimum transfer amounts set by the credit card issuer and the partner programs.