An Introduction To The Three Major Flexible Points Currencies, And How They Render Your Airline-Specific Credit Card (Nearly) Obsolete

The best credit cards earn flexible points, and by that I mean points that can be transferred to a variety of different loyalty programs.  The beauty of accumulating flexible points, as opposed to points or miles that are specific to any one particular loyalty program, is that they allow you to defer your redemption decision until you are actually ready to book your travel.  In other words, instead of being forced to choose which loyalty program to invest in at the point of purchase (for example, by choosing to pay for your coffee with a Delta card or a United card), a consumer with a flexible-point credit card has the luxury of allocating those points to the loyalty programs that are best suited their travel plans once they actually know what those travel plans are.

The three most prominent flexible points programs are the American Express Membership Rewards the, the Chase Ultimate Rewards program, and the Starwood Preferred Guest program.  Let’s take a look at each.

The American Express Membership Rewards Program

American Express pioneered flexible points programs, and its flagship program – “Membership Rewards” – is probably (read: I’m speculating) the most well-known and extensively-used program out there.  That said, the program lost one of its key partners, Continental, in the United-Continental merger, and is facing stiff competition from Chase as its “Ultimate Rewards” program becomes increasingly popular.

Here’s a list of Membership Rewards transfer partners and the ratios at which Membership Rewards points transfer (instantly) to each partner.  Keep in mind that transfer ratios are critical, and that all points are not alike.  For example, although the Starwood Preferred Guest program is technically a “transfer partner” of the Membership Rewards program, you need three Membership Rewards points for one SPG point.  I’m not a buyer at that rate, and you shouldn’t be either.

Airline Transfer Partners (Amex Points: Airline Miles)

• AeroMexico Club Premier (1:1)
• Air Canada Aeroplan Miles (1:1)
• Alitalia MilleMiglia (1:1)
• ANA Mileage Club (1:1)
• Air Asia Miles (1:1)
• British Airways Executive Club (1:1)
• Delta Skymiles (1:1)
• El Al Madmid Points (1000:20)
• Air France KLM Flying Blue (1:1)
• Frontier EarlyReturns (1:1)
• Hawaiian HawaiianMiles (1:1)
• Iberia Plus (1:1)
• JetBlue True Blue Points (5:4)
• Singapore Airlines KrisFlyer (1:1)
• Virgin America Elevate (2:1)
• Virgin Atlantic Virgin Flying Club (1:1)

Hotel Transfer Partners (Amex Points: Hotel Points)

• Best Western Rewards (1:1)
• Choice Privileges (1:1)
• Hilton HHonors (1:1.5)
• Jumeriah Hotels & Resorts (23:1)
• Starwood Preferred Guest (3:1)

There are several cards that earn Membership Rewards points, but the best of the lot is the Premier Rewards Gold Card: it earns an impressive 3 points per dollar on airfare, 2 points per dollar on gas and groceries, and 1 point per dollar on all other purchases.  Through my link, you can also earn 25,000 points by spending $2,000 within the first three months of opening your account.  The problem with this card is its hefty $175 annual fee, which is waived for the first year.

The Chase Ultimate Rewards Program

The Ultimate Rewards program boasts fewer transfer partners than the Membership Rewards program, but numbers aren’t everything.  Ultimate Rewards points transfer (instantly) to two of my favorite loyalty programs – United and Hyatt.  Transfers to Amtrak can also prove quite valuable, especially for Northeasterners who travel between Boston, New York, and Washington.

Airline/Rail Transfer Partners (Chase Points: Airline/Rail Miles)

• Amtrak Guest Rewards (1:1)
• British Airways Executive Club (1:1)
• Korean Air Skypass (1:1)
• Southwest Rapid Rewards (1:1)
• United MileagePlus (1:1)

Hotel Transfer Partners (Amex Points: Hotel Points)

• Hyatt Gold Passport (1:1)
• Marriott Rewards (1:1)
• Priority Club Rewards (1:1)
• The Ritz Carlton Rewards (1:1)

There are three credit cards that earn Ultimate Rewards points: the Sapphire Preferred card, the Ink Bold card, and the Ink Plus card.  The Sapphire Preferred card is a personal card: it comes with a 40,000-point sign-up bonus if you spend $3,000 within 3 months, and it earns 2 points per dollar on travel and dining purchases and 1 point per dollar on everything else.  It is, without question, one of the best credit cards on the market, and is described in more detail here.  The Ink Bold and Ink Plus cards are nearly identical, except that the former is a charge card and the latter is a credit card.  Both come with a 50,000 point sign-up bonus if you spend $5,000 within 3 months and earn an impressive 5 points per dollar at office supply stores (which can be leveraged for other types of purchases by purchasing gift cards at office supply stores), 2 points per dollar at gas stations and hotels, and 1 point per dollar on all other purchases.

The Starwood Preferred Guest Program

The Starwood Preferred Guest Program sounds like a hotel-specific program, but behaves like a flexible points program.  Starwood “Starpoints” are generally most valuable when redeemed for award nights at Starwood properties, but they are also transferable to nearly thirty different airlines.  Plus, when Starpoints are converted in batches of 20,000, an additional 5,000 Starpoints are added to the transfer.  So 20,000 Starpoints actually converts to 25,000 miles (for airlines that transfer on a 1-to-1 basis), and each Starpoint therefore effectively yields 1.25 miles.  However, and this is an important however, Starpoints may take up to one week to transfer to partner airlines, which can be very problematic when trying to secure award space.

Airline Transfer Partners (Starpoints: Airline Miles)

• Aeroplan/Air Canada (1:1)
• Air Berlin (1:1)
• Air China Companion (1:1)
• Air New Zealand & Air Points (65:1)
• Alaska Airlines Mileage Plan (1:1)
• Alitalia MilleMiglia (1:1)
• All Nippon Airways (ANA) Mileage Club (1:1)
• American Airlines AAdvantage (1:1)
• Asia Miles (1:1)
• Asiana Airlines (1:1)
• British Airways Executive Club (1:1)
• China Eastern Airlines (1:1)
• China Southern Airlines’ Sky Pearl Club (1:1)
• Delta Air Lines SkyMiles (1:1)
• Emirates Skywards (1:1)
• Etihad Airways (1:1)
• Flying Blue (1:1)
• Hawaiian Airlines (1:1)
• Japan Airlines (JAL) Mileage Bank (1:1)
• LAN LANPass (1:2)
• Miles and More (1:1)
• Qatar Airways (1:1)
• Saudi Arabian Airlines Alfursan (1:1)
• Singapore Airlines KrisFlyer (1:1)
• Thai Airways International Royal Orchid Plus (1:1)
• US Airways Dividend Miles (1:1)

There are only two credit cards that earn Starpoints, the Starwood Preferred Guest® Credt Card from American Express and the Starwood Preferred Guest® Business Credit Card from American Express.  Both Starwood cards earn one Starpoint per dollar spent, and both offer a sign-up bonus consisting of 10,000 Starpoints on the first purchase and an additional 15,000 Starpoints after spending $5,000 within 6 months of opening an account.  A full write-up of the personal card can be found here.

What About The Second Part Of The Title?

I hadn’t forgotten!  With such strong flexible points currencies available to U.S. consumers, there are very few good reasons to use an airline-specific credit card.  In fact, I can only think of two: (1) to hit a minimum spend requirement for a sign-up bonus, or (2) to purchase a flight on the co-branded airline, if the use of the card triggers privileges like a free checked bag, lounge access, or priority boarding.  Aside from those two relatively narrow situations, it’s difficult to justify the use of an airline-specific credit card when there are several excellent flexible points currencies that can be acquired in greater numbers and transferred to a variety of loyalty programs.

Note:  I do not mean to suggest that it is unwise to have an airline-specific credit card; in fact, I have two (I got them for the sign-up bonuses).  I’m just arguing that you shouldn’t use these cards, aside from the two purposes I just mentioned.

Airline cards generally earn 2 miles per dollar spent on the airline itself, and 1 mile per dollar spent on all other purchases.  This is true of all of the major carriers’ co-branded cards: American Airlines, Delta, United, U.S. Air, Southwest, Jet Blue, etc.  The miles are earned at a rather unimpressive rate, and, once earned, they are locked into the loyalty program of the co-branded airline.  But why settle for a United card that earns double miles on United flights only, when you could earn double Ultimate Rewards point on all travel purchases, and then transfer those points – instantly – to United or several other loyalty programs?  Why settle for an American Airlines card that earns double miles on American flights only, when you could earn triple Membership Rewards points on all flights with the Premier Rewards Gold card, and transfer those points – instantly – to American or fifteen other airlines?

I hate to end with rhetorical questions, but that concludes my case in favor of credit cards that earn flexiIle points.  If you have any comments or questions, please post them in the comments!

Key Links: American Express® Premier Rewards Gold Card, Starwood Preferred Guest® Credit Card from American Express

Please note that I may receive a referral credit if you choose to apply for a credit card through the links contained in this post.  As always, referral links are only provided when they direct you to the best available offer.  If you plan to apply for the Chase Sapphire Preferred card, please consider applying through this creditcards.com Travel Rewards Credit Cards link (click to page 2); if you plan to apply for the Chase Ink Bold or Plus cards, please consider applying through this creditcards.com Business Credit Cards link (click to page 2 for Ink Plus and Bold).  Both creditscards.com links direct you to the best available offers, and generate a commission for me if you are approved.