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A never-ending debate when it comes to rewards credit cards is “are fixed value points or transferable points are more valuable?” The decision might come down to your personal preference and how you travel. Let’s see which one can be more valuable.
Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.
Fixed Value Points
Fixed value points credit cards have the same redemption rate regardless of when you travel and how you travel. Points you redeem will always be worth one cent each for instance if you redeem them in January or in July. That means 10,000 points will always be worth $100 in travel rewards (or cash rewards) with a fixed value credit card.
A good example of a fixed value points travel rewards card is the Barclaycard Arrival® Plus World Elite Mastercard® (EXPIRED). You earn two miles on every single purchase, miles have a redemption value of 1-cent, and you get a 5% redemption bonus for travel purchases. See Rates & Fees here for more information on the Arrival Plus.
If you have 10,000 Barclaycard miles to redeem for a hotel stay or plane ticket, you will get a $100 statement credit. The 5% travel redemption bonus means you will get 500 miles back into your account to be redeemed a second time!
Cash Back Credit Cards
You might also like cash back credit cards as they can have larger purchase rewards on select spending categories.
The Blue Cash Preferred® Card from American Express, for instance, gives you 6% cash back on U.S. supermarket purchases, up to $6,000 annually (then 1% thereafter). It’s really hard to beat that reward rate as most credit cards will only pay one or two points on supermarket purchases.
You can also earn an unlimited 6% cash back on select U.S. streaming services and 3% cash back at U.S. gas stations and on transit including taxis/rideshare, parking, tolls, trains, buses, and more. For all other purchase categories, you earn an unlimited 1% back.
Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
Cardholders can also enjoy $0 plan fees when using Plan It® to split up large purchases into monthly installments. Pay $0 plan fees on plans created during the first 12 months after account opening. Plans created after that will have a plan fee up to 1.33% of each purchase amount moved into a plan based on the plan duration, the APR that would otherwise apply to the purchase, and other factors.
The welcome bonus is the ability to earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. There is a $0 introductory annual fee for the first year, then $95 (See Rates & Fees).
When you can get a better reward rate on spending by using a cash back credit card, this can be a better option on select purchases. Unless you are trying to focus all your spending on one credit card to gross the most amount of points to be redeemed for award travel.
The second travel rewards option is transferable rewards points that can be transferred to an airline or hotel loyalty program.
While these three cards also offer a “Pay with Points” option when you book your award travel through the Amex or Chase travel portals where the points can be worth anywhere from 1 cent to 1.5 cents each, you can find potentially better value in transferring your travel rewards points.
1:1 Transfer Ratios
If you are going to transfer points, always make sure you get a transfer ratio of at least 1:1 (i.e. 1,000 Chase points = 1,000 United miles). Anything less than that usually means your points will be greatly devalued and will be worth less than one cent each.
With Chase or American Express, you can transfer to the following airlines:
- Flying Blue Air France-KLM
- Singapore Airlines KrisFlyer
- British Airways Executive Club
- Virgin Atlantic Flying Club
Chase and American Express also have exclusive partnerships with other airlines and hotels that they provide co-branded credit cards with. For example, if you like flying United periodically you might consider the Chase Sapphire Preferred. If you like to fly Etihad or Emirates, the Amex Platinum is a good option.
Transferred points out to airline miles should always be worth at least one cent each when redeemed directly with the carrier. Many people like to transfer points to an airline loyalty program to redeem first class flights or partner flights as they have better award values than your typical economy seat.
When booking premium air travel tickets, transferring miles is significantly cheaper than using fixed value rewards.
Hotel points are often trickier as some programs like Starwood and Hyatt have really good programs where point values can easily exceed 1 cent each, while others will be more consistently worth closer to 0.5 cents each.
Co-branded Airline and Hotel Credit Cards
While you can’t technically “transfer” your points earned from a co-branded airline or hotel credit card, it is a similar concept as the value of airline tickets and hotel stays fluctuate. Plus, it’s a nice way to pad your balance in conjunction with your transferable points.
Airlines like Delta (Amex MR transfer partner), Southwest Airlines (Chase UR transfer partner) and even United (Chase UR partner) have adopted a variable award chart for all or some of their flights. These changes to fluctuating reward rates have made it so redeeming your points is only worth it when you can find an “award sweet spot” or fly on a partner carrier.
Fixed Value Points Are Better If…
Ultimately, the fixed points vs. transferable points debate boils down to your personal preference for point valuations and your travel flexibility. For example, you will want to use fixed value points for Uber & Airbnb purchases. You will probably find more value in fixed points when:
- You want simplicity (i.e. points are always worth 1.5 cents each)
- Redeem points for cheapest fares
- Redeem points for economy seats where transferable points have similar value
- Can only travel during peak season
- Earn elite miles to retain membership status
Bargain travelers and families that base their travel schedules around the school calendar might benefit from a fixed value card or a co-branded airline or hotel card that offers free checked bags or complimentary hotel nights without paying a steep annual fee.
Transferable Points Are Better When…
You will get more value out of transferable points if:
- Redeem rewards points for first-class award flights
- Book partner flights
- Can travel in peak and non-peak travel seasons
- Have flexible travel dates
Some frequent travelers almost exclusively rely on transferable points if they buy premium tickets or are not loyal to one specific carrier. In these instances, transferable points tend to have more value than flat value points on many occasions.
The Best of Both Worlds?
If you are not decidedly in one camp or the other, it is possible to own a credit card that lets you do both. Flexible travel rewards credit cards have really stepped up to the plate recently.
With the Chase Sapphire Preferred, points are worth 1.25 cents each when you book your travel from Chase and you can also transfer them to 11 of the largest airline and hotel loyalty programs. And, it earns two points per $1 on all travel and dining purchases.
In the premium travel card category, the Platinum Card from American Express is a solid pick for frequent fliers. Paying with points for flights on Amex Travel is only 1 cent per point in many instances, but, they have some great transfer partners including Etihad, Emirates, Delta, and Aeroplan Air Canada. You can also rack up the miles on flights and hotels at 5 points per $1 spent.
Summary: Fixed Value Points or Transferable Points
Fixed value points and transferable points will both allow you to book award travel. The best option comes down to your travel preferences. Fixed points are simple to track and guaranteed. Transferable points are often times better for non-peak and premium travel, but, you never know when a program can devalue points.
For rates and fees of The Blue Cash Preferred® Card from American Express, please click here.
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Chase Sapphire Preferred® Card
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®.
- Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchases, plus more.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 03/31/22.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
The comments on this page are not provided, reviewed, or otherwise approved by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered. Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.
Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.