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In last week’s article, I gave a high-level view of award travel by introducing terminology, outlining basic earning and redemption strategies, and, hopefully, enticing you to give this travel hacking thing a shot yourself.
That post included a lot of information in a small number of words, so over the next few weeks I’ll be circling back to unpack various topics to explain them in more detail to give a deeper understanding of how to best use miles and points for luxury travel. I’ve also made note of the ideas and suggestions mentioned in the comments which I will weave into future posts.
Today, I’ll cover one of the most important topics in award travel: transferable currencies.
As was explained last week, transferable currencies are those that can be transferred directly to hotels and airlines to be used in their respective reward programs. In the eyes of United Airlines, it doesn’t matter whether a mile was earned flying from JFK to LAX or transferred from your Chase Ultimate Rewards account – they are exactly the same.
Transferable currencies are owned by specific banks and each have relationships with different hotels and airlines (known as transfer partners). In general there is not much overlap between transferable currencies for specific transfer partners, although there are a few cases such as Singapore Airlines, which is a partner of several currencies.
The advantages of earning and redeeming transferable currencies are many:
- The flexibility of not being locked into a specific program or region. If you can’t find award availability on one airline, you may find it on another partner’s flight and can use that instead.
- Points can be redeemed through the bank’s travel portal for cash flights if rates are low (generally not as good of a value, but better in some instances and also allows you to earn miles on the trip).
- Numerous redemption options such as free nights at select hotel partners, event tickets, and gift cards.
Transferable points give the best chance for optimized redemptions because of the sheer number of options available. Although it is generally discouraged to hoard a large amount of points in any currency without a specific redemption in mind, transferable currencies are one of the few instances where it makes sense to stock up regardless.
The five transferable currencies are:
- Chase Ultimate Rewards (UR)
- American Express Membership Rewards (MR)
- Citi ThankYou Points (TYP)
- Capital One Miles (CapOne)
- Marriott Bonvoy Points
In the following paragraphs I’ll give a quick synopsis of each currency, how to earn them, and explain some of their best transfer partners. Unless otherwise stated, all transfers are at a 1:1 ratio of points to airline miles or hotel points.
Chase Ultimate Rewards
Ultimate Rewards points are highly coveted in the points and miles arena. This is mainly because they have excellent transfer partners but also due to the fact that points are becoming more difficult to obtain thanks to the “5/24” rule”.
Starting in 2015, Chase bank began denying applicants for new cards if they had opened five or more (personal) credit cards in the last 24 months (hence “5/24”). The kicker is that the five accounts can be with any bank, not just Chase, and also includes accounts to which you have been added as an authorized user. While not all of Chase’s credit cards are subject to 5/24, all those that earn Ultimate Rewards are, so keep that in mind.
The cards that earn Ultimate Rewards points are:
Note that in order to enable transfers of Ultimate Rewards points to transfer partners, you must have a “premium” card such as the Sapphire Reserve, Preferred, or Ink Business Preferred. That being said, here are three of the top transfer partners for Ultimate Rewards points and their ratio of UR-to-mile:
- United Airlines
- British Airways
- Hyatt Hotels
For a complete list of Ultimate Rewards transfer partners, click here.
Right off the bat, URs show their value by enabling direct one-for-one point transfers to United and British Airways, which means that you now have access to all of their Star Alliance and OneWorld partners as well. While Hyatt might seem like an odd choice considering its small footprint compared to monsters like Hilton and Marriott, it offers some of the best value around. For example, a night at the marvelous Park Hyatt Vienna often will retail for $1,000 in peak season but will set you back just 25,000 Hyatt points. A 4¢/point value is certainly nothing to sneeze at!
Entrance to the Park Hyatt Vienna’s incredible restaurant.
American Express Membership Rewards
Another excellent transferable currency is Membership Rewards, which can be earned by fifteen different credit cards by American Express, including:
These credit cards all offer category spending and referral bonuses to help further boost your earnings. American Express also has “Offers” that can be manually attached to each account which provide discounts or bonus points for spending at a specific merchant (for example, “Spend $250 at Saks Fifth Avenue and earn 5,000 Membership Rewards Points”). These can be especially lucrative for purchases you were already going to make.
Three of the best transfer partners for Membership Rewards points are:
- ANA
- Virgin Atlantic
- Singapore Airlines
For a complete list of Membership Rewards transfer partners, click here.
Like Ultimate Rewards, Membership Rewards Points have access to multiple Star Alliance carriers and you can get just about anywhere in the world by transferring to one of their partners. For example, you can transfer points to Singapore Airlines and fly in their first class suites for pennies out of pocket like we did in 2017.
Getting some shut-eye in Singapore Airlines’ First Class Suites.
Citi ThankYou Points
Often seen as the “little brother” to Ultimate Rewards and Membership Rewards, Citi ThankYou Points are the third powerhouse in the transferable currency scene.
ThankYou Points can be earned via the following credit cards:
- Citi Prestige
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- Citi Rewards+ Student
- AT&T Access
Again, each of these cards have their own welcome bonus and category structures that earn multiple points per dollar on spend for specific purchases (5 points per dollar spent on travel for the Prestige, for example).
The top 3 transfer partners for Citi ThankYou Points are:
- Avianca
- Turkish Airlines
- Etihad
For a complete list of ThankYou Points transfer partners, click here.
Avianca is a Star Alliance partner so you will have access to partner flights such as United. Turkish Airlines is an interesting and relatively new addition to the Top 3 thanks to the recent discovery that you can book United flights within the U.S. (including to Alaska and Hawaii) for 7,500 miles each way. Finally, you can book American Airlines flights with Etihad Guest miles at pre-devaluation rates, making it a valuable partner.
Note that in order to transfer ThankYou Points to these partners, you must have a Prestige or Premier card open (e.g. not a no-fee card). Otherwise, your transfer options are severely limited.
Capital One Miles
Capital One is a new entrant to the transferable currency market. Originally, their “miles” were purely for “erasing” travel expenses from your account statement to provide a credit. In 2018, they added airline and hotel partners which they now allow transfers to. The credit cards that earn transferable Capital One miles are:
Capital One credit cards earn 1.5-2 miles per dollar spent and are a good way to rack up miles. Beware, however, that none of their transfer rates are as favorable as other currencies, which are usually a 1:1 ratio of points to airline miles. The ratio for Capital One to airlines is typically 2:1.5 (which, believe it or not, is improved over the original rate).
The top 3 Capital One Transfer Partners are:
- Wyndham Hotels
- Air France/KLM Flying Blue
- Singapore Airlines
For a complete list of Capital One’s transfer partners, click here.
The recently-added Wyndham Hotels partner offers some great value, such as the Wyndham Midtown 45 in NYC for 15,000 points per night (equal to 20,000 CapOne miles) where cash rates are between $300-$600 per night. Flying Blue and Singapore Airlines are also both excellent transfer partners because they are partners of the other three transferable currencies as well, making it exceedingly easy to amass a high number miles in those programs. So even though the transfer rates aren’t ideal for Capital One miles, it’s still possible to get great value from partner transfers if the cash rates are high enough to warrant it.
Marriott Bonvoy
It’s almost not worth mentioning Bonvoy as a transferable currency given that their transfer ratio to partner airlines is 3 points to 1 airline mile. While they do offer a 5,000 mile bonus if you transfer 60,000 points (60,000 Marriott points = 25,000 airline miles), in almost all cases it’s a terrible deal and you should save your points for hotel stays.
For the sake of completeness, here are the credit cards that earn Marriott Bonvoy points:
Again, there is still value to be had from Marriott hotel stays using points but only in extremely rare cases should you consider transferring points to airline miles. This is especially true if you’re new to miles and points – stick with the other four currencies and you can’t go wrong.
Valuing each currency
Each of the aforementioned transferable currencies has value in its own way because of their relationships that allow for transferring points to airline miles and hotel points. Points are always redeemable at 1 cent/point through the banks own travel portal, but by transferring to airlines it’s often possible to realize redemptions of 4-5 cents per point (or higher in some cases).
The trickiness in assigning an exact value is that partnerships, routes, and fluctuations in the cash price all skew the results. As a rule of thumb you should always aim for at least 2 cents per point in value from your transferable currencies which is relatively easy to do. Even though Jeremy tends to knock it out of the park with redemptions, you shouldn’t expect to score that kind of value every time.
In terms of valuing the transferable currencies relative to each other, the highest value is Chase Ultimate Rewards, Amex Membership Rewards, Citi ThankYou Points, Capital One Miles, and then Marriot Bonvoy. This is based on the value of their transfer partners and difficulty in obtaining the points (Chase is harder based on the 5/24 rule).
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Final Thoughts
Transferable currencies are some of the highest value points you can have for award travel. The options and flexibility they provide are second to none and each currency offers unique opportunities to realize exceptional value from their transfer partners.
With the exception of Marriott Bonvoy, the collection of transferable currencies is one of the simplest and most effective ways to travel more and better for less out of pocket cost. Stay tuned for next week’s article, where I’ll give specific recommendations for your first few credit cards (hint: they earn a transferable currency!).
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Thanks! Very useful. I was almost ready to give up on Citi Thank you but thanks to you I figured out how to get a United ticket using those points. The arbitrage opportunities are amazing!
Happy to help! Citi certainly has some powerful partners that should not be overlooked.
When you transfer the currencies to another airline will it expires if you will not use on same year you transfer?
If you transfer points to an airline, they become airline miles and are subject to the airline’s cancellation policy. Most airlines do have some sort of expiration date on their miles but make it quite easy to keep them alive – usually any kind of incoming or outgoing transfer or earning will count as activity and extend the expiration.
I only transfer for the purpose of redemption. There is no benefit to transferring to an airline early.
Hello Brandon – Thanks for the good info. I am ‘on the road’ in less developed countries where often ‘Cash is king’. I have found that the most consistent way of reducing costs for me is the following:
The use of a Charles Schwab debit card for free cash withdrawals from local ATMs .But even better, it reimburses me for the local ATM charge – generally $5 for a $200 withdrawal. That’s huge.
When I have a chance to use a credit card (actually a debit card), I use Transferwise – which gives an unbeatable exchange rate.
Further, my ‘go to’ credit card gives 2% cash back, but without the best currency exchange rates – yet no international fees.
So, as for long term travelers (or maybe short-term), can you offer ‘hard numbers’ that make your approach a little more ‘analyzable’ over the long-term. A $95 yearly fee for Chase Saffire immediately presents a real ‘cost’.
I hope this makes sense. Thanks, KURT
This is me – long-term traveler outside the US. I also use the Schwab ATM card (alongside the Fidelity ATM card.) Details. It’s great!
The short term value comparison is easy – you pay $95 and Chase gives you 60,000 UR points worth at least $750 but probably closer to $1,200+.
Long-term: you could pay the fee for 12+ years with no additional value and still be ahead. (But you wouldn’t.)
The Chase Sapphire Preferred (CSP) card pays 2x points on restaurants and travel (hotels, airfare, etc…) and 1x on generic spending. Using this card in the 2x categories yields 4% back when redeeming at 2 cents per point (or 20% back when redeemed at 10 cents per point, as we have done a few times.) You can compare that to 2% cash back to determine the break even points.
All of the Visa cards (including the CSP and the Schwab ATM card) use the Visa currency exchange rates.
Today:
transfer $1,000 USD to Euro:
Visa: 894 Euro
Transferwise: 888 Euro
to Thai Bhat:
Visa: 31,969 THB
Transferwise: 31,006 THB (in 2 days)
To Taiwan dollars (where I live now) Transferwise has always been a net loss compared to just using the ATM. This is why I never use Transferwise. Other currencies may be different.
edit: links to Transferwise and Visa exchange rate info
Couldn’t have said it better myself! I also use a Schwab debit card for obtaining cash and have never had any trouble making the annual fee of a good travel card well worth it in my 7 years living overseas.
Thanks for the wonderfully detailed reply. Your mind for numbers never ceases to amaze ;-) I’m surprised to see that Transferwise isn’t as bullet-proof as I thought. I’ll continue to research that.
And I guess I’ll get on board with the Chase Saffire Preferred card – they have been relentlessly sending me emails. Time to join!
And I really enjoyed your article comparing Schwab to Fidelity for ATMs. I’ll stick with Schwab for now, it’s yet to fail.
Take care, and thanks again – KURT
Hey again guys, as I went to sign-up for my pre-approved Chase Saffire Preferred card, I saw that the requirement for receiving 60,000 bonus miles was putting $4000 on the card within 3 months. I’m almost embarrassed (or proud?) to say that is a ‘high hurdle’ for me. Again, I’m often in cash-only situations.
I now remember that this is why I didn’t join previously. But for other travelers who can easily put approx. $1,333+ on a credit card per month for 3 months, then it is a good option.
My thanks once again, and take care – KURT
Minimum spend requirements are ubiquitous among any credit card with a good bonus or decent benefits. There are many ways to meet the requirement, though.
Indeed, lots of ways to meet that minimum spend.
Brandon and I were just helping my Dad figure out how to get 2 business class tickets to Taipei, retail price $12,000. My Dad doesn’t spend much at all and spends mostly cash.
I suggested paying $10,000 in taxes (multiple cards) and then filing for a refund immediately. Use the refund to pay the credit card. This comes with a processing fee of $186. Along with the annual fees and airline taxes the total cost of these flights will be about $400 each.
This idea is a bit too ‘crafty’ for me.
Talking a dear relative into foregoing their long held ways (i.e., cash only)? And asking them to ‘work’ the next tax return? Isn’t there a better way to gain ‘shareable’ travel miles? I gotta wonder. I’m losing some hope here.
But so much of your other advice is really good. So thank you once again. KURT
You could also get the points by paying the $12,000 retail price.
Hello Again Brandon – I apologize for my lengthy comment above. But I guess my biggest concern is for folks who, unlike me, don’t pay off credit cards at the end of every month. These folks are often paying exhobitant interest, and the ‘travel savings’ from adding to credit card debt are washed away many times over.
I think you should mention this when advising people to consider ‘currencies’.
Again, sincerely – KURT
Of course, paying your bills on time and in full is the only way to reap the benefits of award travel.
What about Marriot to Alaska miles? I’ve read that is a good conversion
The conversion rate is the same for all programs (3:1 with 5,000 mile bonus for each 60,000 point transfer). However, since Alaska Airlines does not belong to any of the major airline alliances (yet), their miles are harder to obtain and so they are quite valuable. They also have a couple of great redemptions, such as US to Asia with a free stopover in Hong Kong for 50,000 miles in Business. In most cases, though, it’s more effective to apply for one of the Bank of America Alaska Airlines credit cards to get the desired mileage.
Hi Brandon,
When cancelling a card like my BofA Alaska Visa or my Chase Sapphires, if I apply again after 24 months, will I get the bonuses again? Or are the bonuses only one time?
I live in a smallish city that is only served by an Alaska-branded (Horizon Air) propeller plane :) so I’m trying to hoard more Alaska miles.
Jeff
You must wait 24 months after closing or product changing the Alaska Airlines personal card before getting the bonus again (however, this does NOT apply to the business version). For the Sapphire, you must wait 48 months.
Hi Brandon – You said that a “premium” card is required to make transfers to partners for both UR and Thank you points. Does this mean you keep open your cards with annual fees year after year? Seems like you would lose a lot of value from your bonus/earned points.
Or do you sign up for a card like the Chase Sapphire Preferred only when you know you will use the points in the first year and then cancel your card after that?
I generally keep one card with an annual fee for both Chase and Citi, yes – but it doesn’t have to be the $400+ annual fee version. I keep the Chase Ink Plus ($95, no longer available) and the Citi Prestige ($450) as I get more than their annual fee’s worth of benefits each year, but you could also keep the Citi ThankYou Premier with a $95 fee. Because of Chase’s 5/24 rule and the required 48-month waiting period between Sapphire bonuses, it makes sense to keep one of their cards open and the Sapphire Preferred checks a lot of boxes.
One thing to add… we aren’t transferring points every year.
You could get a CSP, meet the minimum spend and get 60k UR points, and then transfer them to an airline and fly to Europe or Hawaii for vacation. If the sole purpose of keeping a premium card is for the option to transfer points to airlines, well.. you no longer have any points to transfer.
Like Brandon, we do keep one premium Chase card (the Sapphire Reserve) because we get more value from it than the annual fee.