With the introduction out of the way, here are my valuations of Membership Rewards, Ultimate Rewards, and Starwood Preferred Guest points. Yes, I realize Starwood points aren’t typically thought of as one of the major fluid credit card points currencies, though I still put them into this category given how easily they can be transferred.
American Express Membership Rewards – 1.8 cents/point (previously 1.6 cents/point)
The past couple of years have been really rough for the value of Membership Rewards points. Back in 2010 Membership Rewards points were the golden standard of points currencies, though a lot has happened over the past several years to devalue them, including:
- 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 wasn’t a single transfer bonus to Delta SkyMiles all of last year year, while in previous years we frequently saw a 30-50% transfer bonus
But Membership Rewards points are on the rebound, in my opinion. In November of last year Singapore Airlines began making their famous “Suites Class” available to KrisFlyer members at the saver level, and Membership Rewards points transfer to KrisFlyer at a 1:1 ratio. This is hands down the most aspirational airline product out there, so the ability to redeem for this at a reasonable rate is certainly a big score for those with Membership Rewards points.
Furthermore, last year we saw several 30-50% transfer bonuses to British Airways Avios. While the program has remained the same for the most part, there are some real gem redemptions, like 50,000 Avios for roundtrip business class between Boston and Dublin with no fuel surcharges, 80,000 Avios for roundtrip business class between New York and Berlin/Dusseldorf on Air Berlin with no fuel surcharges, and the option to transfer points to Iberia’s Avios program and redeem for travel on them without fuel surcharges. Factor in a 30-50% transfer bonus on the above, and you’re looking at flying business class for less than coach.
The relative value of Delta SkyMiles has also gone up, in my opinion. They’re hands down the best way to get to Australia, given that they partner with Virgin Australia which releases which releases more saver business class award space between the US and Australia then any other airline. Best of all they eliminated fuel surcharges on these redemptions last year, which saves about $800 per ticket.
Membership Rewards points also remain the most “transferable” points currency out there. You can transfer your Membership Rewards points to a mileage account in someone else’s name, which I find to be a great feature when topping off an account that’s a bit short on miles.
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 – 1.8 cents/point (previously 1.9 cents/point)
Chase Ultimate Rewards is a great program given that points transfer to some of my favorite loyalty programs, including United MileagePlus and Hyatt Gold Passport. They also offer 1:1 transfers to Korean Air, Southwest, Marriott, Priority Club, Ritz-Carlton, and more.
Hyatt charges just 22,000 points per night for their top end properties, including the Park Hyatts in the Maldives, Paris, Sydney, and Tokyo, for example. Those are some of the most reasonable redemption rates in the hotel industry for properties that otherwise go for $800+ per night.
Similarly United MileagePlus gives you access to the Star Alliance, and they have extremely generous routing rules as well. For example, you can route from the US to Asia via Europe, or from the US to Australia via Asia. They don’t do any blocking of partner award space and allow one stopover and a double open jaw, so there’s no mileage currency I value more than MileagePlus miles.
However, the one reason I slightly lowered my value of Ultimate Rewards points is that in the past they could freely be transferred between Ultimate Rewards accounts, and you could also transfer your Ultimate Rewards points to a mileage account in anyone’s name. Nowadays that isn’t possible anymore, so that takes away the option of topping off a mileage account using Ultimate Rewards points. At the end of the day points can only be as valuable as their best use, and in this case it’s what I value MileagePlus miles at.
Best credit card(s) for earning Ultimate Rewards points: Chase Sapphire Preferred® Visa Card, which offers double points on dining and travel and a 7% annual points dividend, the Ink Plus® Business Card and Ink Bold® Business Card, which offer 5x points on office supply stores, cable, TV, phone, and internet, and 2x points on gas and hotels, and the Chase Freedom®, which offers 5x points in rotating quarterly categories.
Starwood Preferred Guest – 2.2 cents/point (previously 2.2 cents/point)
This one really pains me. As I started writing the post I decided to value Starpoints at 2.0 cents each. Earlier in the month the value of Starpoints for hotel redemptions did drop given that Starwood devalued cash & points by about 20-25%, which was the best use of Starpoints for hotel redemptions prior to this. Furthermore, 150 more Starwood properties went up in price than down in price with the recent category shifts, and when you only have a bit over 1,000 properties, that’s a pretty substantial number of properties going up in price.
So on the hotel redemption front I was ready to drop the value down to two cents a piece. But I can’t do that because you can still transfer Starpoints to many airline currencies at a 1:1 ratio, with a 5,000 point bonus for every 20,000 points transfered. That means you can convert 20,000 Starwood points into 25,000 American miles. At a valuation of 2.2 cents per Starwood point, that means you’re valuing an American mile at 1.76 cents per mile, which is pretty close to my previous valuation of 1.8 cents per American mile.
So what can I do here? Previously I thought cash & points and airline mileage transfers were an equally good use of Starwood points. Now cash & points isn’t as good of a value, while the value of mileage transfers hasn’t changed. So I guess I can’t lower their value?
On the plus side in one way the value of Starwood points did go up on the mileage transfer side. Japan Airlines changed their award chart in October whereby redemptions on Emirates became cheaper in many cases. For example, New York to Dubai roundtrip is just 85,000 miles in business class or 135,000 miles in first class. That means you need to transfer just 70,000 Starwood points for business class or 110,000 Starwood points for first class. Starwood is Japan Airlines’ only major transfer partner, so you can’t beat Starwood points for redemptions on Emirates.
Best credit card(s) for earning Starwood points: Starwood Preferred Guest® Credit Card from American Express and Starwood Preferred Guest® Business Card from American Express, which offer two points per dollar spent at Starwood properties and one Starwood point per dollar spent on everything else
How do you value Membership Rewards, Ultimate Rewards, and Starwood points?
(In the interest of full disclosure, some of the above links earn me a referral bonus, and all are for the best available offers for each card — thanks for your support!)