Maximizing Transferable Credit Card Rewards: A Comprehensive Guide

19.03.2024 - 18:29 / insider.com / Credit Card

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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.

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.

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