With the introduction out of the way, here are my valuations of Membership Rewards, Ultimate Rewards, and Starwood Preferred Guest points. Yes, I realize SPG points aren’t technically “credit card points,” though I still consider them to be one of the “big three” credit card points currencies due to how easily they can be transferred.
American Express Membership Rewards – 1.6 cents/point
Going back a year I would have said American Express Membership Rewards points were worth at least two cents each, though a lot has happened since then to change that:
- Continental was removed as a transfer partner on September 30, 2011
- British Airways hugely devalued their award chart for those in North America as of November 15, 2011
- Aeroplan gutted their award chart and added huge fuel surcharges to award redemptions on most non-US carriers
- There hasn’t been a single transfer bonus to Delta SkyMiles all year, while last year we frequently saw 30-50% transfer bonuses
So the four things that made Membership Rewards points so valuable either aren’t possible or being offered anymore.
Still, there are some positives:
- American Express is offering a 50% bonus on transfers to British Airways through the end of the month. This seems to be a fairly regular occurrence, though let’s see if it still happens in the future given that British Airways’ co-branded credit card is with Chase. While Avios points aren’t especially valuable, I think it’s tough to value them at under a cent each, regardless of how critical you are of the program.
- It has become possible to redeem Singapore Airlines KrisFlyer miles for saver first class on Singapore Airlines. As I discussed in great detail in this post, it’s now finally possible to redeem for Singapore Airlines’ new first class at the saver level, which wasn’t previously possible. This remains the only reliable way to redeem miles for Singapore Airlines first class.
- Through Aeroplan business class to Europe roundtrip costs only 90,000 miles with two stopovers (in addition to the destination). So if you don’t mind flying a US carrier for the transatlantic flight, you can’t beat visiting three places in Europe for just 90,000 miles in business class. There are still bargains to be had with Aeroplan, they just take more effort to find than before.
Anyway, the program isn’t nearly what it used to be, but it’s still not worthless. I sure hope they’re talking to either Alaska Airlines Mileage Plan or US Airways Dividend Miles for a potential partnership, as either would greatly improve the value proposition of the program.
Best credit card(s) for earning Membership Rewards points: American Express Premier Rewards Gold Card, which offers 3x points on airfare, 2x points on gas and groceries, and 15,000 bonus points for any year in which you spend $30,000 on the card
Chase Ultimate Rewards – 1.9 cents/point
As the “new kid on the block,” Chase has quickly made Ultimate Rewards points one of the most valuable points currencies out there, especially since it’s possible to earn more than one Ultimate Rewards point per dollar spent with several of their cards.
Ultimate Rewards points can be transferred to British Airways, Korean Air, United, Hyatt, Marriott, Priority Club, and more. So they have lots of transfer partners, though the only “mainstream” partners where a 1:1 transfer is a great deal would be to United and Hyatt, in my opinion.
So while I value Hyatt points at slightly less than 1.9 cents per point and United miles at around 1.9 cents per mile, there’s a key aspect to Ultimate Rewards points that makes them more valuable than the individual points currencies they can be transferred to.
Specifically, the miles can be transferred to an account in anyone’s name in either program. This is significant for a couple of reasons. First, it allows you to “top off” an account to have enough points for an award. For example, say you’re trying to book two business class awards from the US to Asia and you and your spouse each have 110,000 United miles. The ability to transfer those 20,000 Ultimate Rewards points to two different accounts gives them some premium over just having 130,000 miles in one account and 110,000 miles in another account, for example.
Furthermore, the ability to transfer to anyone’s account means you can transfer to an elite member’s mileage account (if you have a friend that’s an elite member with United, for example), which gets you ticketing fee waivers, free changes, etc. These are all things that add up and have to be considered, in my opinion.
Best credit card(s) for earning Ultimate Rewards points: Chase Sapphire Preferred Card, which offers double points on dining and travel and a 7% annual points dividend, and the Chase Ink Bold Business Card, which offers 5x points on office supply stores and 2x points on gas and hotels
Starwood Preferred Guest – 2.2 cents/point
While I’ll cover Starwood again later with other hotels, I did feel like including them here since many use Starwood points in the same way they would use Membership Rewards or Ultimate Rewards points, using them for transfers to other mileage programs.
Starwood points can be transferred 1:1 to many airlines, and for every 20,000 points you transfer you earn a 5,000 point bonus, meaning you’re essentially earning 1.25 miles per dollar spent.
Unbundling that, my valuation makes each transferred mile worth 1.76 cent, factoring in the 25% bonus, which I think is pretty fair given that points can be transferred to American, US Airways, etc.
But the further added value is that sometimes SPG offers an even further transfer bonus. Earlier in the year US Airways offered a 50% bonus for transfers from SPG, meaning that 20,000 SPG points would net you 37,500 US Airways miles. Using the 2.2 cent per point valuation, that lowers the cost per US Airways mile to just 1.17 cents each, which is a pretty spectacular value. While a transfer bonus like that isn’t guaranteed, we seem to see at least one great transfer bonus each year.
Best credit card(s) for earning SPG points: Starwood Preferred Guest American Express Personal Card and Starwood Preferred Guest American Express Business Card, which offer one SPG point per dollar spent on all purchases, and two SPG points per dollar spent at SPG properties
Next up will be my valuation of airline miles…
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