Rewards programs offering rebates on point redemptions

/

A few days ago I saw Frequent Miler post some datapoints describing how folks who carry both the personal Barclays JetBlue Plus Mastercard and the JetBlue Business Card were receiving a total of 20% of the TrueBlue points they redeem back as a rebate (each card normally earns a rebate of 10%).

While that doesn't exactly put the JetBlue cards on the map for unbonused spend, it may be worth considering for folks with a lot of paid JetBlue travel, since a 20% rebate on redemptions is functionally the same as a 20% boost to your earning rate: if you ordinarily earn 6 TrueBlue points per dollar spent on JetBlue fares, but when you redeem those 6 points you receive a rebate of 1.2 points, and another 0.24 points when you redeem that rebate, your earning rate is functionally 7.44 points per dollar spent on JetBlue fares.

Likewise, the 10,000 anniversary points awarded by the cards would earn an additional 2,400-odd TrueBlue points when redeemed, which even at a conservative 1.5 cents per point would be worth another $36 against your combined $198 in annual fees. After running through that analysis, I thought it might be useful to put all the programs offering similar rebates together in one place.

Other rewards programs offering rebates on redemptions

  • Barclaycard Arrival Plus. Unlimited 5% rebate when points are redeemed for travel statement credits, $89 annual fee.
  • Bank of America Amtrak Guest Rewards World and Platinum MasterCards. Unlimited 5% rebate on all Amtrak Guest Rewards redemptions for Amtrak travel. I don't know if holding both the World and Platinum MasterCards would trigger a double rebate (let me know in the comments or by e-mail if you hold both cards).
  • Citi / AAdvantage Platinum Select MasterCard, Barclays AAdvantage Aviator Red and Aviator Silver MasterCards. 10% rebate on all AAdvantage redemptions, up to 10,000 miles rebated per calendar year (on 100,000 in redeemed miles). This benefit is not supposed to be stackable, although if your cards are linked to separate AAdvantage accounts you might be able to earn a total of 30,000 rebated miles on 300,000 in redemptions, at least until you get caught.
  • (Closed to new applicants) Chase IHG Rewards Club Select. 10% rebate, up to 100,000 rebated points (on 1,000,000 redeemed points). This benefit should be stackable with the new IHG Rewards Traveler and Premier cards' 4th-night-free benefit, for a total "rebate" of 32.5% off stays of exactly 4 nights.
  • American Express Business Platinum. 35% rebate on Membership Rewards points redeemed for premium cabin travel on all airlines, or economy travel on a single airline of your choice each year, up to 500,000 rebated points (on 1.43 million redeemed points). This can also be stacked with a fairly bizarre coding issue on the American Express personal Platinum card.
  • US Bank Flexperks Travel Rewards. $25 rebate (the equivalent of 1,667 Flexpoints) when booking flights through the Flexperks travel portal, but not when booking flights through other channels and redeeming Real-Time Rewards against the purchase.

You can see these rebates vary along a number of axes:

  • is the rebate capped or uncapped? An uncapped rebate is better if it's a program you use heavily. Someone whose primary airline in American might not even notice a 10,000-mile rebate each year, while the $25 Flexperks rebate can be ransacked by, for example, booking flights one direction or even one leg at a time whenever the price is the same as booking a round-trip (for example with Alaska or Southwest Airlines).
  • is the rebate in points or cash? Given a fixed value, you should theoretically prefer a points rebate since you will earn another rebate on the redemption of the rebated points, as I described in the case of JetBlue: a 20% rebate is "really" closer to a 24.8% rebate after you complete enough redemptions.
  • is the rebate stackable? Most of these rebates are nominal on their own, but they can become more valuable if they can be combined with other discounts or benefits, as in the case of the legacy and relaunched IHG credit cards. To give another example, the AAdvantage cards also give you access to American's reduced mileage awards, giving you the combination of a lower sticker price and a 10% rebate off that lower price.

Conclusion

This was an interesting exercise for me, because while it's second nature to me to describe, for example, the Arrival Plus card as earning 2.105% cash back on unbonused spend, that precise logic applies equally well to all these programs.

For example, if the United and American shopping portals are both paying out 20 miles per dollar, and you value the miles equally, an American AAdvantage credit cardholder should prefer the American portal, since you know you'll actually receive 22 miles per dollar: 20 up front and another 2 after redeeming them.