How to navigate the world of credit card points

They are more valuable than those offered on an airline or hotel group

There’s no such thing as a free lunch, but investing in a credit card rewards program can land you pretty close to the mark. Credit card points are generally more valuable than points or miles attached to a specific airline or hotel group. The reason? Flexibility. With a trove of credit card points, you can get flights, hotel rooms or even cruises. While Capital One and Bank of America are coming into their own, the three major players in the travel rewards game are American Express, Chase and Citi. Here’s a basic rundown of their current programs.

The basic points unit of currency for American Express is the Membership Rewards point. They can be redeemed for statement credits and used to buy things like gift cards, but you’re going to want to focus on one of two things to get the best bang for your point: booking travel through their portal or transferring points to partnered flight and hotel programs.

One advantage of American Express is that there are more products with which to earn Membership Rewards points than Chase or Citi offer to earn their points. Make sure you know what you’re getting before you apply for a specific card: The Amex EveryDay and Platinum cards, for example, earn Membership Rewards points. The Blue Cash Everyday card does not.

How much points are worth is relative, but you should avoid redemption options that attach a value of less than a penny per point.  

You’ll get better value booking flights through American Express Travel, where roughly 50,000 points gets you a flight worth $500 (a penny a point). Redemption levels on hotels rooms tend to be lower, back in the .7 cents/point range. It’s worth noting that Business Platinum Card holders receive 35 per cent of their points back when paying for economy flights with points on a selected airline — meaning that the same $500 ticket costs just 32,500 points.

Dollar for dollar, the greatest value in redemption comes when you transfer points to flight partners like Etihad Airways, Singapore Airlines and ANA. It’s up to the individual traveller, though, to decide what he or she values most. If you like redeeming your points for splashy, once-in-a-lifetime experiences, like a luxurious trip from John F Kennedy International Airport in New York City to Singapore Changi Airport in a private suite on Singapore Airlines, 240,000 points will get you that round-trip ticket (and all the lobster thermidor you can handle). At a cost of roughly $13,000 or $14,000, you’d be squeezing five or six cents out of each point — a very high value. But value is in the eye of the traveller — you may prefer to take that same number of points and use it for three round-trip flights in economy on that same Kennedy-Singapore route.

Chase Ultimate Rewards

The Chase Ultimate Rewards family of cards includes their two Sapphire cards (Sapphire Preferred and Sapphire Reserve), their Freedom and Freedom Unlimited cards, and their Ink Business Cash and Ink Business Preferred cards. Only the Ink Business Preferred and two Sapphire cards allow transfer to travel partners and a bonus when redeeming through the Chase Ultimate Rewards portal (they also don’t have foreign transaction fees).

Many of the same principles as American Express apply to Chase: While you can redeem your points for things like gift cards or a statement credit or purchases on Amazon that’s not your best value proposition. Sapphire Preferred cardholders can redeem points toward travel at a value of 1.25 cents per point; Sapphire Reserve cardholders fare even better, getting 1.5 cents out of each point, or a 50 percent bonus. That means a $600 flight will cost you only 40,000 points — not bad.

Citi ThankYou Rewards

The Citi Prestige is the centerpiece of the ThankYou Rewards suite of cards, and it has some fantastic perks: It has trip delay insurance benefits that are significantly better than those of its competitors, and offers a unique free fourth night hotel benefit that can pay for the card’s annual fee by itself. That means your fourth night of a consecutive four-night stay is completely free, from fleabag motels to the Four Seasons, provided you book through Citi. That’s the good news.

Amassing points

Unless you’re putting tons of spend on your credit cards every month, the most efficient way to get points quickly is through sign-up bonuses — the Chase Sapphire Reserve, for example, currently offers a 50,000 point bonus (possibly higher if you apply in-branch) when you spend $4,000 in the first three months of having the account open. I monitor forums and travel blogs (Doctor of Credit is good) to see what offers are out there.

©  2018 The New York Times