We broke down the differences between credit card points and frequent flyer miles — here's why you should be collecting both


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Even though a ton of credit cards offer “points” or “miles” for
every dollar you spend, those points can be very different things.
Each bank and frequent flyer program has its own rewards currency
that can be used in different ways. That makes it complicated when
you’re trying to choose a credit card; two different cards could
offer double points on purchases, but those points could have
different values, and could be best for two different things.

In general, one type of rewards stands out as the most valuable:

transferable points
, which you can earn with non-airline
rewards
credit cards
. You can use these points to book travel directly
through the credit card issuer, or you can turn them into airline
miles or hotel loyalty points by transferring them to different
loyalty programs. (Hence, the term “transferable points.”)

Because of the way frequent flyer programs work, you can usually
get a lot more value from transferable credit card points than from
airline miles. Plus, with transferable points, you have more
options than you would with airline-specific miles.

However, since you can earn frequent flyer miles every time you
fly — in addition to any points or miles you earn from buying the
ticket with your credit card — there’s no reason to pass those
up, even if you don’t fly often. Plus, it can definitely be worth
collecting fixed-value points, too.

Continue reading below to learn more about the differences
between transferable credit card points and airline miles, and to
see why it makes sense to earn both.

Keep in mind that we’re focusing on the rewards and perks that
make these credit cards great options, not things like interest
rates and late fees, which will far outweigh the value of any
points or miles. It’s important to practice financial discipline
when using credit cards by paying your balances in full each month,
making payments on time, and only spending what you can afford to
pay back. 

Transferable credit card points: maximum flexibility and value


Transferable points
, also known as flexible points, are
generally the best kind of rewards to earn. This is because they
give you the most redemption options, from cash back to travel. You
can shop around to find the best value, whether it’s redeeming them
directly through the bank’s travel portal or transferring them to
an airline or hotel loyalty program.

The three main transferable points programs are Amex
Membership Rewards, Chase Ultimate Rewards, and Citi ThankYou
Rewards.
Each of these three rewards programs partners
with airline or hotels and you can move your points over to them to
book travel. 

Somewhat confusingly,
Capital One miles
— which you can earn on cards like
Capital One® Venture® Rewards Credit Card
and the
Capital One® Spark® Miles for Business
— are also
transferable. They’re not miles in the sense that they’re tied to
an airline frequent flyer program, but you can
transfer Capital One miles to airline partners
including Air
Canada and JetBlue.

How to use transferable credit card points

One way to use transferable points is to exchange them for cash
back or statement credits against purchases. However, this
typically provides the worst value, as many flexible points
currencies will give you less than 1 cent per point, and you can
get much more value when you use these points to book travel.

A better way to use your bank-based credit card points is to
book travel through your credit card company’s travel portal. These
portals work just like Expedia or Priceline, with one difference:
They show the price in points as well as in dollars. The best part
is that your points will often get a nice jump in value, depending
on your bank.

The other option for all three of these points currencies is to
transfer them to an airline or hotel partner, turning them into
frequent flyer miles or hotel points.

Amex Membership Rewards points

You can earn
Membership Rewards points
with Amex
cards
like the
Platinum Card from American Express
, the
American Express® Green Card
, and the
Blue Business® Plus Card from American Express
.

American Express Membership Rewards points offer a terrible
value for cash, statement credit, and merchandise redemptions (less
than 1 cent per point), but are mostly better when you use them
through Amex Travel.

Generally, points are worth 1 cent each toward flights booked
through Amex Travel, and 0.7 cents on all other travel purchases
including hotels and cruises. Occasionally, Amex offers “Insider
Fares” on flights — mostly with Delta — which give you a
slightly better value for your points.

If you want to invest a bit more time into finding the
highest-value way to redeem your Amex points, you can also transfer
them to airline and hotel partners including Delta, Hilton,
Singapore Airlines, and Marriott. You can get more value from your
points this way because you aren’t limited to just 1 cent per point
in value — depending on how much a first-class airline ticket
costs in cash, using Amex points to book it could get you 5 cents
per point in value or more.

Chase Ultimate Rewards points

You can
earn Ultimate Rewards points
with the
Chase Sapphire Preferred
,
Chase Sapphire Reserve
, the
Ink Business Preferred Credit Card
, and other cards.

Chase Ultimate Rewards points are only worth 1 cent each as cash
or statement credits. Depending on
which Chase card you have
, you can get a bonus on points used
to book travel through Chase.

For instance, if you have the Chase
Sapphire Preferred
card or the
Ink Business Preferred
, you’ll get a 25% bonus on points used
toward travel booked through Chase— in other words, those points
will be worth 1.25 cents each, so 50,000 points are worth $625.
With the Sapphire
Reserve
, the bonus for travel purchases is 50%, so the same
50,000 points are worth $750.

You can also transfer Chase points to partners like Hyatt,
British Airways, United, and Marriott — transferring Ultimate
Rewards will often get you the most value.

Citi ThankYou Rewards points

Finally, there’s Citi ThankYou Rewards, which you can earn with
cards like the Citi Premier℠ Card and the
Citi Prestige® Card

You get 1 cent per point when you book flights through Citi. The
Citi Premier is
currently offering a 60,000 point sign-up bonus
after you spend
$4,000 in the first three months, so those points would be worth
$600 for flights.

You can also transfer Citi points to airline partners including
Avianca, Etihad, and Singapore Airlines.


citi thankyou premier

Frequent flyer miles

If you’re spending on a card like the
Gold Delta SkyMiles Amex
 or the United
Explorer Card
from Chase, you earn frequent flyer miles instead
of transferable rewards points. While miles can be way more
valuable than points, they’re also more complicated to book
with.

Transferring your Chase or Amex points to a frequent-flyer or
hotel-loyalty program is generally the most lucrative use of
points. This is particularly valuable for flying, since in most
cases, the cash price of a flight and the miles required for an
award ticket aren’t linked, so it’s possible to get exponentially
increased value from your points by transferring them and booking
an award ticket instead. That means potentially
being able to fly long-haul in first or business class with
points
, among other things.

Airlines are
increasingly doing away with award charts
in favor of pricing
award tickets “dynamically” based on customer demand, but it’s
still possible to find real steals for using your miles. The trick
is to find “saver” award availability, which requires fewer miles
than “standard” awards. There are usually just a few of these saver
seats available, and they may become open periodically between when
the flight schedule is published and when the flight leaves.

By doing a couple of sample searches, it’s easy to figure out
the lowest possible price for a specific routing. It can require
some patience, and occasionally flexibility, but if you plan in
advance, you can just keep your eye on award flight prices by doing
occasional searches until the saver availability you need opens
up.

Finding saver seats and booking award tickets is the only
practical way to use credit card points for travel in first and
business class — it can be a bit tricky, but
it’s definitely doable
.

Why it’s worth earning both credit card points and airline miles

Ultimately, it’s best to collect both transferable credit card
points and frequent flyer miles for the sake of flexibility.
Sometimes you might find a better value by using miles, and other
times points are more valuable. It can also be worth having points
handy for times you can’t find saver availability and don’t have
any flexibility in your travel plans. You can also use points to
offset expenses that can’t be covered by frequent flyer miles or
booked through a travel portal, like train tickets or ferries.

Because you can earn twice on your flights — through a rewards
credit credit card when you buy the ticket, and through a frequent
flyer program when you actually fly — you should make sure that
you’re always earning that double credit, no matter what kind of
credit card you use.

While there’s value to earning multiple types of credit card
rewards, if you’re only going to use one, the best course is to opt
for transferable points, since they give you the most
flexibility.

If I had to choose just one program, I would stick with Chase
Ultimate Rewards — ideally the
Chase Sapphire Reserve card
— since it’s possible to get
great value, pool your points between cards, and use them for
everything from cash back and statement credits to award bookings
by transferring them to frequent flyer miles.

If you’re looking to start earning points, be sure to check out
our guide to the best
rewards credit cards

Click
here to learn more about the Chase Sapphire Reserve
card.


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Source: FS – All-Travel destinations-News
We broke down the differences between credit card points and frequent flyer miles — here's why you should be collecting both