In the world of travel, the name of the game is flexibility. Depending on the credit cards in your wallet, this flexibility may be hindered, and you could be missing out on some sweet opportunities that travel rewards programs offer.
In a nutshell, fixed-value points credit cards can be redeemed towards a specific dollar amount for travel. Typically, you can expect to receive one to two cents per point towards travel. On the flipside, transferable points allow you to transfer your rewards to various airline or hotel partners and give you more options for redeeming your miles and upgrading to premium cabins.
Here are five lessons I learned when using fixed-value points rewards.
1. Devaluations happen
When you don’t have the ability to transfer points to other airline or hotel partners, you’re stuck if the company suddenly decides to make changes to its program. Although it’s not ideal, it happens. In fact, here’s a recent case from Chase Sapphire Reserve®. Even though transferable points won’t completely protect you either, you have the option of moving your points over to other airlines that offer valuable redemption options.
That’s why having a credit card that earns you points and miles to transfer or redeem with a variety of partners is ideal. That way, if a program changes with one airline, you aren’t at a complete loss. Consider using balance transfer credit cards to help manage your finances until you find the right travel card with the most benefits for you.
2. Fixed-value points won’t change
By definition, a fixed-value points credit card means the points redemption will always be the same—and it doesn’t matter when or how you travel. To give you an example, let’s say points are worth one cent each. If you have 10,000 points, you can use it for $100 worth of travel. Conversely, if you racked up points with any of the three popular options for a transferable rewards points system (American Express, Chase, or Starwood), points are anywhere from one cent to 1.5 cents.
The top credit cards for miles come with a plethora of travel partners, including airline, automobile, and hotel reward and redemption options. You have the option to transfer your rewards points where it makes sense for your travel, thus, more opportunities to maximize travel value.
3. Flying premium comes at a premium
One thing savvy travelers like to do is to transfer points to an airline loyalty program so they can redeem first class tickets or partner flights since they tend to have better award values than an economy seat.
When doing it this way, transferring miles is way cheaper than if you were to do it with fixed-value rewards.
Pro tip: plan your strategy far in advance to avoid challenges like mileage expiration or losing out on an upgrade opportunity.
4. International travel may be out of reach
Traveling overseas usually means dealing with long flights, and being able to fly in business class would be ideal, right? If you need to travel internationally, or at least want the option, fixed-value points may not get you very far. Instead, I recommend using transferable points to help you reach your international destination.
5. Maximize lucrative bonus categories
Many transferable credit cards offer a wider variety of bonus categories, including:
- American Express Platinum: 5X points on flights and hotels
- Ink Plus® Business Card: 5X points for cable, TV, and internet services
- Chase Sapphire Reserve®: 3X points on travel and dining at restaurants worldwide
Having the flexibility and opportunity to rack up points definitely makes it easier to travel, but it’s also important to understand how miles and points are best used to help you maximize value. Who doesn’t want to earn the most with what they’ve got available? With a little strategy and research, you’ll be jet-setting the world in no time!
Disclaimer: Opinions expressed here are author’s alone, and have not been reviewed, approved or otherwise endorsed by Hipmunk. The author may include references to products from advertisers. For an explanation of this contributor’s advertising disclosure, please click here.
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