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By Dave Grossman, November 10, 2023

Transferable Credit Card Points: What You Need to Know

Advice

There are three kinds of rewards credit cards: Cash back, miles-earning, and bank points a.k.a. transferable points.

Cash back is straight forward. You earn cash, you can get a check, statement credit, or other easy payout of your cash, and that’s it.

Miles-earning cards are tied to one specific airline. We recommend you consider these more for the perks than for spending heavily. That’s because by having your miles stuck in one airline you are giving up the ability to book on another airline when an opportunity arises. You can only use that one airline’s frequent flyer program – which can be devalued at any time.

This brings us to our favorite type of points… the transferable kind.

transferable points

This means that you earn points in the bank’s proprietary currency (the most common are American Express Membership Rewards, Capital One Miles, Chase Ultimate Rewards, and Citi ThankYou) and then you can transfer to any airline or hotel partner that the bank has.

You’ll find your own favorite transfer partners with each program, but the important takeaway is the option you get to transfer wherever the opportunity presents itself.

Let’s say you have Chase Ultimate Rewards points and decide you want to stay at a pricey Hyatt hotel. You discover the cash rate is $800 a night, but only 15,000 World of Hyatt points. You transfer 15,000 Chase Ultimate Rewards points to your Hyatt account and book the hotel. In this case, you earned a 4% return on each point! (Don’t forget you probably earned 2 or more points per dollar as well, for a yield in this example of better than 8%.)

Each transferable point has their own sweet spots, so if you want to read more, here are five helpful links:

Questions or Comments?

The best way to ask questions about this topic is in the private MilesTalk Facebook group, where we discuss all things related to credit card rewards.

You can also follow MilesTalk / Your Best Credit Cards on Twitter, and on Instagram for anything related to miles, points, credit cards, and travel.

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