What are Membership Rewards points for?

It is a truth universally acknowledged, that a travel hacker in possession of Membership Rewards points, must be in want of a way of disposing of them.

This is the main reason that until this year I avoided the American Express Membership Rewards ecosystem. I know what to do with Chase Ultimate Rewards points (transfer them to Hyatt) and Hilton Honors points (book 5-night award reservations) and US Bank Flexperks Travel Rewards points (redeem them for 1.5 cents each on paid airfare).

But for as long as I’ve been travel hacking, the main feeling people have expressed about Membership Rewards points was frustration: yeah, they’re easy to earn, but what the hell do you do with them once you have them?

Now that I’ve got a gazillion of them, I feel that frustration firsthand. Here’s what I’ve gleaned over the years about how people really redeem them.

Cash out through co-branded Platinum cards

One reason Membership Rewards points are so hard to redeem is that their cash value, unlike Ultimate Rewards (which can be redeemed in unlimited quantities for 1 cent each), is discouraging. You can redeem them for statement credits at 0.6 cents each, or for travel through the American Express reservation portal at 1 cent each (or slightly higher for Platinum cardholders, under certain conditions).

“Invest with Rewards” is a feature of the Charles Schwab co-branded Platinum credit card that lets you redeem up to 1,000,000 Membership Rewards points per year at 1.1 cent each for deposits into a Schwab investment account.

This is a popular choice for a lot of people, but it’s also an admission of defeat — and an expensive one, since the Schwab card has a $695 annual fee, not waived the first year. If you’re paying 3% “all-in” to manufacture bonus spend that earns 4 points per dollar, plus a $695 annual fee, you’re only clearing $2,805 per year on $250,000 in manufactured spend.

That’s not for me, but it is a popular choice so I wanted to make sure readers were aware of it.

“Substituting” Ultimate Rewards transfers

The most appealing approach to redeeming Membership Rewards points is to use them as a substitute for Ultimate Rewards transfers. Since transfers to World of Hyatt are so valuable, this is a true “penny saved/penny earned” situation: every point you’re able to redeem from your Membership Rewards account instead of from your Ultimate Rewards account is “worth” whatever value you get from World of Hyatt transfers. It’s not uncommon to get 3 or 4 cents per point in value when redeeming World of Hyatt points, and it’s possible to get much more value if you’re working at it.

This is most obvious when Chase and American Express share a transfer partner. Here are the programs they have in common:

• Aer Lingus Avios

• Air Canada Aeroplan

• Air France KLM Flying Blue

• British Airways Avios

• Emirates Skywards

• Iberia Plus Avios

• JetBlue trueBlue

• Marriott Bonvoy

• Virgin Atlantic Flying Club

Note that all the Avios programs (Aer Lingus, British Airways, Iberia Plus, and Qatar) have miles that can be transferred between the programs, but obviously not everyone has all four programs set up and connected to their credit card rewards accounts, so I mention them separately as well.

Another method of substitution is to transfer “similar enough” miles. For example, Star Alliance partner award availability can be booked with both United Mileage Plus miles (transferred from Chase Ultimate Rewards) or Air Canada Aeroplan miles (transferred from either). Where award space is available in both programs, then saving Ultimate Rewards points by transferring Membership Rewards points to Aeroplan is another way to preserve your Ultimate Rewards balance for higher-value redemptions.

Betting on the Hawaiian-Alaska merger

One interesting alternative that I would consider “low-” but not “no-risk” is preemptively transferring Membership Rewards points to Hawaiian Airlines HawaiianMiles. The merger recently passed the Department of Justice’s review process, so it has a reasonable chance of being finalized at some point. After that happens, I would guess the airlines would take a year or two to align their reservation and award systems, and at some point I’d expect Hawaiian to enter into the oneworld alliance, as Alaska already has.

Once all that has happened, miles might become transferrable between the programs, or used from either program to book oneworld alliance partner flights.

There are a lot of if’s, and’s, and but’s in there, but if you’re sitting on more Membership Rewards points than you have any idea what to do with, then stashing a few hundred thousand in a HawaiianMiles account is one way to hedge the value of your points. You might regret doing it eventually, but the least valuable point will always be the one you don’t redeem.

More point transfer hijinx and England trip finally booked

Last month I wrote about my experience combining Chase Ultimate Rewards points between my partner’s non-flexible Freedom account and my own flexible Ink Plus account. In order to finish booking our award tickets to the UK, I needed to shuffle around a few more points and want to share that experience as well since I wasn’t able to find any accurate or recent information online.

Failure #1: transferring Ink Ultimate Rewards point to another person’s travel program

Low-level award availability was wide open on United non-stops to London, so my plan was to book one-way awards on United for a total of 60,000 MileagePlus miles. The catch is, I had 30,000 miles in my account and my partner had 25,000. I could have transferred 30,000 Ultimate Rewards points into my account, but this would have painful in two ways:

• First, I loathe United, and it would have been painful to convert valuable Ultimate Rewards points into worthless United miles when the same points could be redeemed for multiple nights at Hyatt properties.

• Second, and even more importantly, this would have created a new problem — my partner would still have 25,000 stranded United miles! That would have kept me on the United treadmill even longer, since even if we wanted to book a 25,000-mile domestic round trip on United (we don’t), I’ve have to transfer another 25,000 Ultimate Rewards points to my account.

My plan, then, was to transfer just 5,000 Ultimate Rewards points directly into my partner’s account. This, gentle reader, proved to be impossible. While my partner’s name appeared in the United dropdown box, the site simply errored out when I attempted to submit the 5,000-point transfer. Since we had to call to set up the “link” between our Ultimate Rewards accounts, I assumed something similar was happening and called the number on my Ink card.

After connecting to the Ultimate Rewards center, I explained the problem and the agent at first seemed eager to help, although she didn’t know how. After putting me on several “brief holds” to talk to her coworkers and consult her manual, she finally came back and said it was impossible to transfer points to my partner’s account because she’s not an “owner” of the company, just an “employee.” I pressed her on this but she insisted (“helpfully” suggesting that I can just transfer the points to my own United account and book both tickets from there).

So it was back to the drawing board for me.

Success #1: transferring Marriott points between members

Thinking through my options, I remembered that Marriott Bonvoy points can be transferred to airline partners (as can most hotel points, although at uniformly terrible rates. Thanks to Marriott’s loose alliance with United, there’s even a 10% bonus when transferring points to MileagePlus, so the 5,000 points we needed would only cost 14,000 Bonvoy points. Logging into my Marriott account, I was relieved to see that I somehow had earned 20,000 points over the years. Since I hate Marriott just as much as United, and had no plans to ever redeem Bonvoy points for a hotel stay, draining my account swapping one out for the other was a win-win opportunity.

However, the Marriott transfer page provides the ominous warning: “For most airline partners, your Member name on the frequent flyer program account must match your Marriott Bonvoy first and last name.” I wasn’t able to find any information online about whether this restriction is enforced, or for which airline partners, but since time was of the essence I couldn’t afford to have the points locked up in transfer purgatory.

Fortunately, Marriott also allows you to transfer Bonvoy points between members. There are a few restrictions on the number of points you can transfer out and receive per year that weren’t relevant, but there’s one restriction that had me worrying: “Both Accounts must be in good-standing and have each been open for at least thirty (30) days with Qualifying Activity, ninety (90) days without Qualifying Activity.”

The problem is, I had no idea whether my partner had a Marriott account! If not, there was no way we could trigger her eligibility in time to book our tickets. A few minutes of frantic searching through e-mails later, we discovered she did have an e-mail welcoming her to Marriott — but plugging the information into Bonvoy to retrieve her username and password had no effect. It turned out she had a Bonvoy account but had never set up online access to it! I assume this means she enrolled in-person at a conference hotel or something years ago and ignored the follow-up e-mail to set up her account.

This obviously raised the question: does the Bonvoy account need to be open for 90 days, or does online access to the account need to be set up for 90 days?

The answer is, it turned out to be fine. After configuring her online account, I called Marriott’s US number (800-627-7468) and requested the transfer. One interesting issue did come up: when the agent looked up my account, it wasn’t registered to my name. After confirming my identity in other ways, she asked for the details of the receiving account, and when I gave my partner’s name, the agent replied, “that’s the name I was seeing on your account.” I assume this is some kind of duplication check on their system’s backend; since we share an address, their algorithm might have linked our accounts automatically. Artificial intelligence, it ain’t!

While the point transfer wasn’t “immediate” (we tried logging out and back in, clearing cookies, using a different browser, etc.) the points had already arrived in my partner’s account the next morning, so I’d generously give yourself 24 hours before you start worrying your points are missing.

Success #2: Transferring Marriott points to United

This part was thankfully easy, since it can be completed entirely online. However, while I saw some old posts suggesting transfers were immediate, or at least fast, that was not our experience. The transfer was submitted on March 24, and while we didn’t check every day (I hate pestering my partner about this stuff) it didn’t finally post until a week or so later. The delay may be a “first-time” transfer issue to verify the name on your transfer partner matches the name on your Bonvoy account, or it may be a recurring “batch” process so your own delay time may depend on when you submit your request.

In any case, this isn’t very long in the grand scheme of things if you’re regularly emptying your Marriott balance into a partner airline program after every stay, but it’s something to be aware of if you need miles for a time-sensitive booking.

Failure #2/Success #3: booking tickets to England

Naturally, by the time the transfer to United did go through, my award availability was gone. Well, not quite gone: the price had ticked up by 2,000 miles, to 32,000. If I were flying alone I wouldn’t have minded the extra 2,000 miles, but there was no way I was going through that rigamarole again. It turned out Virgin Atlantic also had great partner award availability for 35,000 Delta SkyMiles, and we each had enough miles in our respective accounts, so we simply locked that in instead.

This is not ideal since SkyMiles are worth more to me than Mileage Plus miles (as they can be redeemed on Delta as well as partner airlines), and today I noticed United awards have ticked back down to 30,000 miles, so I may end up cancelling the SkyMiles tickets and rebooking on United after all.

Maybe next time my partner’s in a good mood.

Two great, one good, and one marginal grocery store earning boost

By now you may have heard that starting May 1, 2020, Chase and American Express have enhanced the rate that several of their cards earn miles and points at grocery stores. I was notified by American Express by e-mail on May 1 (subject line “FQF, your Amex Card Member benefits just got better”), but I still haven’t actually received any official communication from Chase.

Here are the four most attractive offers I see, from the no-brainers to the tough call.

12 Hilton Honors points with Surpass and Aspire, plus a lifetime status angle

The American Express Surpass card usually earns 6 Hilton Honors points per dollar spent at grocery stores, and the Aspire card just an unbonused 3 points. Through July, both cards will earn 12 Honors points per dollar spent, with no maximum.

Hilton Honors points are worth about half a cent each, and normally cost about half a cent each when manufactured at grocery stores (since the same spend could be put on a card that earns 3% rewards). During this period, the card earns the equivalent of 6% cash back, which is essentially unheard of for an offer with no limit on the bonused amount.

Additionally, if your travel hacking strategy includes hitting the $15,000 spend threshold for a free weekend night with the Surpass card, or the $60,000 threshold for a second free weekend night with the Aspire, you obviously want to earn as many points as possible along the way, and the next 3 months are going to be a great opportunity to do so. American Express is also extending the expiration date of all certificates earned after May 1 and allowing them to be redeemed any night of the week.

Finally, I want to mention — without putting too much emphasis on it — that there’s a lifetime status angle here as well: all points earned with the Surpass and Aspire cards through December 31, 2020, will be treated as “base points.” Base points are a legacy feature of the Hilton Honors program from when it was a hotel loyalty scheme instead of a credit card loyalty scheme, and are (normally) earned only on your room rate and room charges. If you receive Diamond status by holding the Aspire card or by spending $40,000 on the Surpass, then you have probably never had any reason to think about base points.

The reason you might care about base points now is that Hilton has a “lifetime” elite status program: if you earn 2,000,000 base points, and maintain Diamond status for a total of 10 years (they don’t have to be consecutive), you are awarded “lifetime” Diamond elite status. For those with access to especially plentiful and socially-distanced grocery store spend, this is an opportunity to earn a phenomenal number of base points towards that 2-million-point goal.

If, like me, you believe every deal dies eventually, then you can treat lifetime Diamond status as a kind of long-term insurance policy: American Express can fire you as a customer, grocery stores can refuse to serve you, but Hilton will be stuck honoring your status for years to come.

If you do decide to pursue this angle, contact Hilton and ask them what your current lifetime base point total is and the number of years of Diamond status they’ve credited you with. I don’t know of any way to look up this information online (leave a comment if you do!).

3 and 5 Ultimate Rewards points with Chase Sapphire Preferred and Reserve

Over time every travel hacker should be diligently accumulating as many Chase Freedom cards as possible, which in the second quarter of 2020 are already earning 5 Ultimate Rewards points per dollar spent at grocery stores, on up to $1,500 per card in spend. I personally only have 2, but I know others have many more.

In May and June, 2020, Chase has increased the earning rate on their premium Sapphire Preferred and Reserve cards to 3 and 5 Ultimate Rewards points, respectively, on up to $1,500 per month in grocery store spend. That means after you’ve exhausted your quarterly Freedom bonus categories, you have another $3,000 in bonused grocery store spend to go.

Points earned with the Sapphire Reserve are worth a minimum of 1.5 cents each (when redeemed for paid travel), which makes the spend a no-brainer, but even if you only have the Sapphire Preferred I think the flexibility of Ultimate Rewards points, compared to the relative restrictiveness of Hilton points, suggests you should knock out your capped spend on these cards before going all-in on the Surpass or Aspire cards.

3 World of Hyatt points with Chase Hyatt cards

The two offers above are great, in the sense that my recommendation is: if you have the cards, take advantage of them. The Chase World of Hyatt earning boost is attractive, but doesn’t quite fall into that category: in May and June, 2020, you’ll earn 3 World of Hyatt points per dollar spent at grocery stores, on up to $1,500 per month in grocery store spend.

My perspective here is that if you plan to transfer 9,000 Ultimate Rewards points to Hyatt any time in the near future, these 9,000 World of Hyatt points should be valued the same as Ultimate Rewards points: every point you earn in World of Hyatt is a point you don’t have to transfer from Ultimate Rewards.

But whatever your plans and your level of confidence in those plans, you should almost certainly value World of Hyatt points “somewhat” less than Ultimate Rewards points, which is to say, maximize your Ultimate Rewards earnings first before turning to World of Hyatt.

4 Delta SkyMiles with American Express consumer credit cards

I no longer have an American Express Delta co-branded consumer credit card, having swapped my personal Delta Platinum card out for the business version several years ago (a card I’m planning to cancel, if the increased $250 annual fee ever hits). That means I’m not personally affected by American Express raising the earning rate on consumer cards to 4 Delta SkyMiles per dollar spent at grocery stores through July, 2020.

Let me get the obvious out of the way first: if you value and chase elite status with Delta through the Medallion Qualification Dollar waiver (spending $25,000 per calendar year) and Status Boost (bonus Medallion Qualification Miles when spending $25,000 or $30,000 on the Platinum and Reserve cards, respectively), then you should certainly try to earn as many redeemable miles as possible while doing so! A high, uncapped earning rate at grocery stores makes the next few months a great opportunity to sprint towards those goals.

Likewise, if Delta American Express consumer cards are the only cards you have featuring enhanced earning at grocery stores, they’re the only ones you can use: play the hand you’ve dealt yourself.

But as much as I enjoy the experience of flying on Delta, there’s no escaping the fact that SkyMiles are simply hard to use for high-value redemptions, and I hesitate to value them at more than 1 cent each (their value when used on “Pay with Miles” redemptions). The risk of unredeemed balances, or low-value redemptions, is much higher even than with a program like Hilton, where even break-even redemptions come with a 5th night free, for instance.

That’s what makes this earning boost a “marginal” play: a 4% earning rate in normal circumstances would be great, especially with the potential of accelerated elite status with a good airline. But given the other possibilities available, I would turn to Delta only after meeting Chase’s earning caps and satisfying my need for Hilton points.

Bonus tip: free manufactured spend at Safeway & Co.

I’d been noodling this post for a day or two when I saw Doctor of Credit share a new Safeway deal for $10 off $100 in MasterCard gift cards. The discount reduces the cost of each card below face value, making it a great opportunity to score some early wins this month.

The offer runs through May 16, 2020, but in my experience these offers must be added to your Safeway accounts during the week they launch (after which they remain linked until expiry).

So, get cracking!

Chase's missed opportunity to do the right thing

I mentioned in Friday’s post that the airport transfer I ordered through the Chase Ultimate Rewards portal to pick us up at the Sofia airport never arrived, and that we ended up taking the (cheap, convenient) subway instead. I wrote, “I have a request in with Ultimate Rewards to refund the points, so hopefully this mistake will end up being free, but overall it was a silly experience and waste of time.”

Oddly, that’s not how it worked out.

Chase wanted the transfer company’s permission to refund me

On my first call with Chase, on Thursday, October 10, I was placed on hold several times as the representative tried to contact the transfer company, but wasn’t ultimately able to. She told me they would contact the company and be in touch by phone or e-mail once they’d resolved the issue.

I received the first e-mail followup on Saturday, from the e-mail address “VNA-INTL.chasetravel@customercare.expedia.com,” which is obviously the e-mail address for the person at Expedia that handles Ultimate Rewards reservations:

“Thank you for contacting Chase Travel about Refund Request for your Budapest Express - Transfers on travel in dates Sep 08,2019 and travel out dates Sep 28,2019 .

“We have made multiple attempts but are still in the process of making contact with [Budapest Express - Transfers] for your Refund Request. Please expect an email update from us within 24 hour.

“Thank you for choosing Chase Travel.

“Sincerely,
”Arnold Fajardo
”Travel Consultant Supervisor
”Chase Travel”

Ignoring Arnold’s grammar, this is a very strange e-mail for multiple reasons: the dates of my trip were not September 8-September 28, they were September 27-October 9. The name of the transfer company is given as “Budapest Express - Transfers,” when the pickup was at the Sofia airport in Bulgaria, and the company in my original reservation was “P-Airbus,” which is obviously a nonsense, but it’s a different nonsense than “Budapest Express - Transfers.”

The transfer company didn’t give it

The next e-mail, from the same Expedia e-mail address, tried to break the news to me gently:

“Thank you for contacting Chase Travel about your cancellation request for your reservation at Budapest Express - Transfers.

“We have advocated your case with Budapest Express - Transfers and due to their policy in relation to your reason for cancelling your reservation, they have unfortunately denied your request.

“We apologize that their response was not more favorable.

“We apologize for the delay in answering your e–mail. We are currently experiencing an extremely high volume of e–mail requests preventing us from responding within our normal standards.

“Thank you for choosing Chase Travel.

“Sincerely,
”Alvin Elona
”Travel Consultant Supervisor
”Chase Travel”

Again, obviously I did not cancel my reservation for any reason. They simply never showed up.

I’m not mad about the points, I’m confused about the missed opportunity

Obviously, in the grand scheme of things, 2,000 Ultimate Rewards points aren’t that big a deal to me, and they certainly aren’t that big a deal to Chase. But in its own way, that makes the situation more, not less, confusing. I understand Chase doesn’t have any way to exercise control over the service providers Expedia uses. But when you’re putting your customers, with whom you have a direct relationship, completely in the hands of your partners, the obvious way to resolve partner disputes is to err on the side of caution. Instead, Chase decided to very mildly annoy me in order to save $25 because they’re not willing to stand up to their partner.

Like I say, I’m not mad, I’m just confused.

I would have been better protected using a credit card

The final piece of this microdrama is that if I had simply booked an airport transfer with a credit card, and they didn’t show up, my credit card company would have cheerfully reversed the charge within minutes. By putting customers through this absurd three-step dance, where Chase contacts Expedia, Expedia contacts their in-country partner, and then it’s up to the partner whether or not to grant a refund, Chase may save 25 bucks here and there, but also sends a loud and clear message not to trust them with third-party reservations.

It’s not going to bankrupt them, and it’s not going to bankrupt me, but that doesn’t make it a good business decision.

Quick hit: Ultimate Rewards points transfers are available instantly when you add an authorized user

This isn’t exactly news, but since I encountered it for the first time the other day, I wanted to pass it along to anyone else who might find themselves in the same situation I was in.

Expiring points are a constant nuisance if you have a lot of loyalty accounts

In general there’s no rhyme or reason to points expiration policies, with some being based on periods of inactivity, some being based on calendar years, some on program years, and some points coded to expire a fixed number of months or years after being earned. There are services that promise to track your expiring points, AwardWallet being the most prominent because they offer an affiliate program, but at the end of the day you’re responsible for your own points.

My biggest expiring-point mishap was with my HawaiianMiles account, where I had earned a sizable balance during a short-lived period when a mainland grocery store was both selling high-denomination prepaid Visa debit cards and participating in HawaiianMiles in-store mileage earning. After the grocery store withdrew from the program and stopped selling high-denomination cards, I lost interest and eventually forfeited almost 25,000 HawaiianMiles simply through years of inattention.

Ultimate Rewards transfers reset inactivity periods

If you see an expiration coming a long way off, there are plenty of ways to trigger activity. Buying a $1 Wall Street Journal subscription through a shopping portal would be enough to save your points, as long as you did it far enough in advance.

If you put it off, or don’t notice an upcoming expiration until it’s close at hand, you’ve got a different problem. Points purchases and transfers will usually reset expiration dates, but they’re preposterously expensive. For example, buying United Mileage Plus miles costs a minimum of $70, plus tax, for 2,000 miles, and transferring miles is almost as expensive.

Fortunately, transfers from Ultimate Rewards to their travel partners are free and instantaneous, starting at 1,000 points, and those transfers also reset expiration due to inactivity.

Ultimate Rewards transfers are available immediately after adding an authorized user

There’s a catch, however: you can only transfer Ultimate Rewards points to the travel partner loyalty account of an authorized user on your own flexible Ultimate Rewards-earning account, whether that’s a Sapphire Preferred, Sapphire Reserve, Ink Preferred, Ink Plus, or Ink Bold.

With my partner’s Mileage Plus balance expiring in just a few days, that got me worried. Would she be added as an eligible recipient in time for the transfer to go through before her balance expired?

Fortunately, after just a few clicks adding her as an authorized user on my Ink Plus account, she immediately appeared in the list of eligible transfer recipients, and I was able to instantly transfer 1,000 Ultimate Rewards points into her Mileage Plus account, pushing the expiration of her miles back another few years.

Conclusion

As I said up top, this won’t be news to heads of household that diligently manage their entire family’s travel finances. But if your family members maintain separate loyalty accounts and don’t carefully follow each other’s expiration dates, it’s good to know that Ultimate Rewards can serve as a quick and easy solution for some soon-to-expire miles and points.

Two takeaways from Starwood Preferred Guest merger announcement

Since blog subscribers already knew about the changes coming to Marriott's elite status qualification in August, I want to highlight two additional takeaways from the details released Monday about the new program.

Starwood Preferred Guest cardholders see a 33% devaluation

Right now Starwood Preferred Guest cardholders earn 1 Starpoint per dollar spent on purchases, and can transfer 20,000 Starpoints to 25,000 airline miles with most of their partner airlines.

After August, they'll earn 2 Marriott Rewards points per dollar spent, and be able to transfer 60,000 Marriott Rewards points to 25,000 airline miles.

The same $20,000 in spend will only get you two-thirds of the way to the same number of airline miles, meaning that on a per-dollar-spent basis, you'll see a 33% devaluation.

Ultimate Rewards transfers look a little better for certain Starwood stays booked in 2018

Currently, flexible Chase Ultimate Rewards points transfer on a one-to-one basis to Marriott Rewards, where they can be transferred on a three-to-one basis to Starwood Preferred Guest. Since Starwood properties top out at 35,000 points, they require up to 105,000 Ultimate Rewards points per night (84,000 Ultimate Rewards points per night on a fifth-night-free award stay).

In August, standard awards will top out at 60,000 Marriott Rewards points, or 43% less than top-tier, peak-season Starwood stays cost today.

"Starting in 2019," standard awards will top out at 100,000 Marriott Rewards points during peak season, bringing the 2019 award chart basically in line with where it is today, although 70,000-point off-peak Category 8 awards will still look better than the 90,000 points they cost today.

Annoyingly, Marriott did not include information one way or the other about whether the new program will continue to offer the fifth night free on award stays. I feel like they could have cut 7 seconds off one of their garbage promotional videos to mention that important piece of information (note that embargoed-for-your-protection Gary Leff says the feature will remain).

Conclusion

Both these observations point in the same direction: if you have a Starwood Preferred Guest credit card today, you have up to 4 more statement closing dates before the changes go into effect. While the Starwood Preferred Guest American Express cards have always been decent for unbonused manufactured spend, especially if you had a particularly lucrative hotel stay or airline transfer partner in mind, all your spend that posts by your July statement closing date will be grandfathered in at the current airline transfer rate and benefit from lower point requirements at Starwood Preferred Guest Category 6 and 7 properties after August 1.

In other words, it's a uniquely auspicious time to pivot away from your other unbonused manufactured spend credit cards and towards your Starwood Preferred Guest, especially if you primarily redeem your Starpoints for Category 6 and 7 redemptions.

This post is focused on Starwood Preferred Guest members because Marriott Rewards members have been so screwed for so long I don't think it's worth dwelling on the fact that the beatings will continue for the foreseeable future.

It's true that the creation of three additional Marriott Rewards redemption tiers above the current maximum redemption rate of 45,000 points will create additional headroom for Marriott to inflate properties into more expensive categories, punishing people who earn Marriott Rewards points through paid stays (and certainly make the 25,000-point and 35,000-point free night certificates just as worthless as they are today). But my working assumption is that anyone who has been earning Marriott Rewards points through paid stays is already so thoroughly downtrodden they'll scarcely notice that the beatings have slightly accelerated.

Don't sleep on the next couple weeks of manufactured spend

There are a couple current and upcoming manufactured spend opportunities I want to make sure readers are aware of.

Office Depot/OfficeMax Visa gift card promotion through March 17

This promotion comes around every few months and is always a good opportunity to load up on Ultimate Rewards points for folks who have a Chase Ink Plus, Ink Bold, or Ink Cash small business card. The current iteration of the promotion is $10 off $300 or more in Visa gift cards.

If you buy two $200 Visa gift cards with $6.95 activation fees, you'll end up paying $3.90 in activation fees after the $10 discount is applied, or 0.2 cents per Ultimate Rewards point if you pay with a card earning 5 Ultimate Rewards points per dollar spent at office supply stores.

This is worth doing basically regardless of your liquidation method. Even paying Plastiq (you can find my personal referral link on the Support the Site! page) $4.88 per card in liquidation fees brings your cost per Ultimate Rewards point up to just 0.68 cents each — a good deal!

Grocery store gas points on Visa gift card purchases between March 16 and March 22

Slightly overlapping with the Office Depot promotion, via Miles to Memories I saw that Giant, Stop & Shop, and Martin's stores will offer 2 gas points per dollar spent on Visa gift cards between March 16 and March 22.

These stores usually don't offer any gas points on prepaid debit card purchases, so it's potentially lucrative to time your grocery store manufactured spend to periods when these promotions are in effect, if you drive and especially if you have a way of storing extra discounted fuel.

I don't drive but have mused in the past about options for distributing fuel points to folks who do (there are some more great suggestions in the comments to that post).

Are your unredeemed points killing your game?

I haven't written about this lately, so hopefully my long-time readers will indulge me as I dive back into what I find is one of the most under-appreciated risks of travel hacking: the risk of unredeemed points.

Plenty of attention is paid to devaluation risk, which is what you encounter when it takes you too long to earn the points you need for the trip you want to take, and the amount you earn in anticipation of a redemption ends up not being sufficient. This risk does not concern me in the least. Earning more points is the natural condition of the travel hacker, so who cares if every few years you need to pack on a few tens of thousands of points in order to secure the redemption of your dreams?

No, the real risk faced by travel hackers every day isn't earning too few points — it's earning too many points, and finding them unredeemable or redeemable only at much lower value than the redemption they were earned in anticipation of.

It turns out flying to Munich is very cheap

The occasion for me thinking about this subject is my partner's planned intercontinental family reunion in Germany this year, which I figured was the perfect opportunity to prove the value of all those trips to Walmart: with all the transatlantic Star Alliance traffic, it should be a piece of cake to find some premium cabin award space so we can travel there in style and comfort. Since I've got way more Ultimate Rewards points than I'm comfortable with, a quick transfer to United would yield a high-value redemption and take a weight off my mind.

Unfortunately, flying to Munich is very cheap. We can fly there and back, nonstop, on the day of our choosing for $775. That's handily under the $800 US Bank Flexperks redemption threshold, so I can book a nonstop ticket for $400 in Flexpoints.

Meanwhile, two roundtrip award tickets in Lufthansa's business class would cost 280,000 Mileage Plus miles and $212 in taxes and fees, or $1,506 per ticket valuing Ultimate Rewards points at their cash value of 1 cent each.

$1,106 is a lot of money, and $2,212 is even more money, so I'm not going to pay that much to upgrade us to business class on a couple of 8-10 hour flights.

What do you do when this happens over and over again?

There are two potentially competing forces at work here: the drive to earn the most valuable points possible and the drive to redeem the right points for each individual redemption. I say "potentially" competing because in many — hopefully most — cases you'll find they are not: if you primarily travel to cities with Hyatt locations that meet your needs, you'll almost invariably find that cheaply-earned Ultimate Rewards points transferred to Hyatt are one of the best values available.

For example (just because I like examples), in Seattle a night at the Hyatt at Olive 8 costs 15,000 World of Hyatt points ($3,000 in office supply store spend with a Chase Ink Plus) while the Hilton Seattle may cost 70,000 Honors points ($11,667 in bonused spend on a Surpass American Express).

But what happens when "high-value" redemptions like the Lufthansa business award I described above are ruled out over and over again by far cheaper paid tickets booked using fixed-value currencies like Flexpoints?

I stay at a lot of Hyatt properties, and I book them for friends and family every chance I get, and I still have enough World of Hyatt and Ultimate Rewards points for 10 nights at a Category 7 property, or 64(!) nights at a Category 1 property. Having too many points to redeem doesn't feel as acutely painful as having too few points to redeem, but both situations send the same signal: that my system is out of of balance.

I think you should redeem your points for cash, but you won't (and neither will I)

The funniest thing I see on Twitter and in the miles and points blogosphere is people bragging about their points balances, as if having a high balance was a point of pride, rather than an admission of failure.

To state what should be obvious, the best number of miles and points to have in all your accounts is zero: the perfect calibration of your earning and burning activity would leave all of your accounts empty virtually all the time, with all of your earning activity purposefully directed towards particular planned redemptions.

That's impossible, both because the world isn't so tidy and because humans are blessed with foresight: odd numbers of points accumulate here and there as various promotions are triggered, and points are earned in small amounts in anticipation of large future redemptions. Such is life.

But the necessity of living in the world as it actually confronts us is sometimes converted into the false belief that high balances are good in their own right, because they give you "flexibility" for future redemptions or "insurance" against a particular deal or earning opportunity dying.

Conclusion

I understand that one subset of travel hackers is wealthy people who use miles and points as a kind of stunt to save money on the kinds of luxury vacations they'd still take if the game didn't exist.

Above I compared a business class award flight on Lufthansa to a paid economy class flight on United. However, if your alternative to each redemption were payment in cash, the comparison would look very different: the $775 United flight gets you about two cents per point on a Flexperks redemption, while the $1,506 Lufthansa flight gets you over 4 cents per point (for a ticket that would otherwise cost $6,143). There you'd be comparing a "good," or even "great," Ultimate Rewards redemption against a "standard" Flexperks redemption, and you wouldn't be wasting $1,106, but rather saving $4,637 per ticket!

That is, needless to say, not my perspective.

Rewards programs, ranked by reliability

One fun thing about writing a blog is that reader feedback gives you a chance to see how different ideas interact and collide. Last Friday when I wrote "While I'm willing to take unlimited risk in my investment portfolio, I'm willing to take virtually no risk in my travel hacking portfolio," reader Danny commented:

"This seems like an interesting sentiment. I'd be far more concerned with keeping my investments sound than my points balance."

Then on Monday I wrote with respect to my findings on Hilton all-inclusive award pricing that:

"If points costs will fall to match low revenue rates, it is easier to justify earning large quantities of Hilton points knowing that you'll almost always get close to, or above, their imputed redemption value."

I've been thinking about these two ideas, risk and reliability, and how they interact in my travel hacking practice.

Devaluations are the big, unknown risk

For several years, the US Bank Club Carlson credit card offered the last night free on all award stays. Now, this benefit was never quite as good as it was cracked up to be since Club Carlson properties, even or perhaps especially high-end Club Carlson properties, are dumps (true story: months after the Radisson Blu Warwick Hotel Philadelphia finished their renovations to not be a dump any longer they left the program).

Many people, expecting that benefit to continue indefinitely, earned hundreds of thousands, or millions, of Club Carlson Gold Points (trust me — many of them are readers of this blog).

Then the last-night-free benefit ended, and those points could only be redeemed at still-crappy Club Carlson properties. The same spend that earned those millions of points could have been used to earn 2% cash back, unbonused Ultimate Rewards or Membership Rewards points, or another rewards currency.

That's the kind of risk that I do my best to avoid in my travel hacking practice, by earning the rewards I redeem and redeeming the rewards I earn.

Reliability is the certainty of being able to redeem rewards for the trips you want to take

Reliability is something slightly different than risk. A reliable program offers consistent redemption values, whether or not that value is high or low, attractive or repulsive.

For example, according to Hotel Hustle, the IHG Rewards Club offers quite remarkable consistency, with a median value of 0.58 cents per point, with 75% of award searches above 0.44 cents per point and 75% of awards below 0.68 cents per point. That doesn't make it attractive to manufacture IHG Rewards points, but it gives you a clear view of the value of any points you might earn in one of their periodic sweepstakes or promotions.

My top ten loyalty programs, by reliability

Whether a particular rewards currency is "worth earning" depends on both your cost of acquisition and your particular travel plans, so this is not a list of the top ten most valuable loyalty programs. It's only a list of the top ten rewards programs sorted by my view of their reliability.

1. Cash. Cash has the great benefit of maintaining its dollar redemption value no matter what happens. It is, in that way, the most reliable rewards currency. Into this category also falls the fixed-value redemption of currencies like Ultimate Rewards, Membership Rewards, BankAmericard Travel Rewards, and other rewards programs with fixed values, like Delta SkyMiles Pay with Points redemptions. Their reliability is unimpeachable.
2. IHG Rewards anniversary free night certificates. In the several years I've been travel hacking, I've never seen an IHG property that I would be willing to transfer points, buy points, or manufacture points in order to book. But they really do have a Chase IHG Rewards credit card that gives you an annual award night at any IHG Rewards property in the world! I've never seen a report of the certificate not being honored for any reason, except the chain's preposterously loose rules on award availability. As far as I can tell the thing is completely reliable. Compare that to Marriott's anniversary night certificates, which have become almost unredeemable as properties continually migrate up out of Category 4.
3. Flexible Ultimate Rewards. Chase Ultimate Rewards points held in a Sapphire Preferred, Sapphire Reserve, Ink Bold, or Ink Plus account are more valuable than cash but slightly less reliable, since their value depends in part on the value of transferred points. One component of the value of a flexible Ultimate Rewards point is the value of one United Mileage Plus mile, but the value of a United Mileage Plus mile is highly volatile, so that portion of the value of an Ultimate Rewards point is also volatile. Nonetheless, Chase strongly supports the 1:1 transfer ratio of Ultimate Rewards points to their partners, so the reliability of the program overall is raised by the relative constancy of programs like World of Hyatt and Southwest Rapid Rewards.
4. US Bank Flexpoints. Long-time readers know I love the US Bank Flexperks Travel Rewards Visa because of its generous bonused earning categories, but the process of redeeming Flexpoints introduces some unreliability into the system. Flights will sometimes be shown with odd fare differences which push them into a higher redemption band, for example. Nonetheless, the ability to redeem Flexpoints for between 1.33 and 2 cents per Flexpoint makes them one of the most reliable currencies around.
5. Flexible Membership Rewards. Here the problem of transfer partner volatility is magnified by the eclectic range of partners Membership Rewards has. For example, in 2015 the transfer ratio to British Airways Avios dropped 20%, from 1000:1000 to 1000:800. Then in 2016 British Airways created a special exception to their distance-based award chart in order to charge between 33% (off-peak) and 60% (peak) more for business class flights between Boston and Dublin on Aer Lingus. Today, you may need to transfer 75,000 Membership Rewards points to Avios to pay for a flight that would have cost 37,500 Membership Rewards points before the two devaluations. This doesn't mean that Membership Rewards points themselves have radically decreased in value (how often do you fly between Boston and Dublin?), but the example illustrates the way in which their reliance on transfer partners for value introduces a lot of volatility into the value of their rewards currency, since they don't control their partners' award redemption rates.
6. Southwest Rapid Rewards. Unlike a true fixed-value currency, Southwest Rapid Rewards points have fixed values only within each fare bucket: Wanna Get Away (between 1.4 and 1.6 cents), Anytime (about 1.1 cents), and Business Select (about 0.9 cents). That means that while you know you'll get one of those three values, which one you get depends on availability, reducing in my view the overall reliability of the program. Southwest enthusiasts avoid this problem by carefully watching the schedule and snapping up Wanna Get Away fares as soon as they become available, increasing the overall reliability of the program for them, at least for flights booked far enough in advance.
7. World of Hyatt. According to the Hotel Hustle database of search results, the lowest value redemption at Hyatt properties is 0.91 cents per point (the median is 1.78 cents). If my Chase accounts were abruptly closed and I had to speculative transfer my entire Ultimate Rewards balance, I would choose World of Hyatt in a heartbeat. Hyatt doesn't have properties everywhere in the world, which makes it hard to rely on as a first-string hotel rewards program, but if there's a Hyatt in your destination you're exceedingly likely to get a good redemption value.
8. Starwood Preferred Guest. Starwood has three different sources of value: their points can be redeemed for hotel stays at Starwood and Marriott, they can be transferred to airlines partners (either directly or through a Marriott Hotel + Air package), or they can be redeemed for revenue flights. That makes it almost impossible to get a bad value for your Starpoints, although it also causes the much more serious and common problem of hoarding Starpoints and being unwilling to redeem them for anything but the perfect redemption!
9. Hilton Honors. As I've been discussing lately, the biggest effect of the recent changes to Hilton Honors is that they've apparently deliberately increased the reliability of the program. While there will always be sub-par redemptions in any non-fixed-value loyalty program, Hilton appears to have increased the number of properties where points redemptions make sense compared to paying cash rates.
10. Legacy airline programs. I got into travel hacking at the very tail end of the period when, with flexibility and planning, it was still possible to fairly reliably book low-level domestic award tickets. Those days are over. Virtually all of my domestic travel today, in both economy and first class, are revenue tickets, not because revenue tickets have become cheaper but because award tickets have become completely unreliable as a means of booking domestic travel. International travel, especially on partners, hasn't seen quite as bad a gutting, and flexibility and planning still go a long way to booking flights overseas. Having access to legacy airline currencies through Ultimate Rewards, Membership Rewards, and Starpoints is still a reasonable tactic in case you happen to find award availability, but I don't think it can be the cornerstone of a strategy any longer.

Conclusion

There you have it, my completely subjective top ten ranking of rewards programs by reliability. This is certainly not the only ranking possible: those whose travel regularly brings them to expensive cities with Starwood properties will find they're able to get consistent value from Starwood Preferred Guest, and those who live in cities with many international partner airlines will likely get more consistent value from legacy airline programs than I do. But today, a combination of cash back, Ultimate Rewards or Membership Rewards, and one or two strong hotel programs seems most likely to help you pay as little as possible for the trips you want to take.

Booking Southwest flights with Flexpoints and Ultimate Rewards

I previously wrote up my experience booking a Hyatt all-inclusive resort in Jamaica. That left the question of how to get there. While I'm not ready to be seduced by Southwest, I waited to pull the trigger a bit too long and the price difference between the nonstop Southwest flight and one-stop options on real airlines shrank enough to convince me to give them a shot, despite my reservations.

Chase Ultimate Rewards points and US Bank Flexpoints can be used to book Southwest flights

Southwest famously doesn't participate in the public Global Distribution System that real airlines use, which is why their fares don't show up on ITA Matrix, Google Flights, and online travel agencies (Google Flights will show you Southwest routes, but not fares).

But the Chase Ultimate Rewards travel center and US Bank Flexperks Travel Rewards travel contractor can book Southwest fares over the phone.

Redeeming Chase Ultimate Rewards points for travel on Southwest

To make an Ultimate Rewards redemption on Southwest call 866-951-6592.

Like all Ultimate Rewards travel redemptions, points are worth 1.25 cents each for travel on Southwest, and you can use any number of Ultimate Rewards points against the purchase price and pay the remainder in cash. After transferring points to Hyatt to pay for our stay in Jamaica, I didn't have quite enough Ultimate Rewards points left to pay for my partner's ticket, so I redeemed my entire Ultimate Rewards balance and paid the remaining amount with my Chase Ink Plus card, which should earn 2 Ultimate Rewards points per dollar if the purchase codes correctly as a Travel Center reservation.

Theoretically I could have redeemed my Ultimate Rewards balance for a cheaper Southwest fare, then cancelled that flight and used the value towards the ticket I really wanted while paying the difference with the card of my choice. Since this was my partner's ticket and as far as I know she doesn't even have a Rapid Rewards account, I decided to keep it simple and just book the tickets I really wanted.

After feeding the Ultimate Rewards agent the dates and flights I wanted, she came back with a price about $90 cheaper than the fare available online. I had heard of this happening before, so told her to go ahead and make the reservation. After giving her all of my partner's information and my credit card information, and waiting on hold for a while, she came back and told me that flight was not available.

After going back and forth a few times, it turned out what she really meant was that that fare wasn't available, which didn't surprise me, and she was ultimately able to book the fare I had found online.

The call took a total of 45 minutes.

Redeeming US Bank Flexpoints for travel on Southwest

To redeem Flexpoints for travel on Southwest call 888-229-8864. The "Rewards Center" US Bank uses is not open 24 hours a day, but has pretty reasonable hours, something like 7 am to 11 pm, Monday through Saturday (I didn't catch their Sunday hours, but they were closed at 10:50 pm Eastern on Sunday).

After taking down my trip details, the agent explained that in order to book international travel on Southwest he had to call them, get a fare quote, put the reservation on hold, and then return to confirm the fare and itinerary with me. He asked me if there was a particular fare I was expecting, which seemed like a common sense precaution to make sure we were looking at the same flights and dates. It was unclear to me whether the same procedure is required for domestic travel on Southwest.

While the Southwest Anytime fare I booked for my partner was still available for about $900, a Business Select fare was also available for $950. Since I was redeeming Flexpoints, I knew that either itinerary would cost 50,000 Flexpoints and I told the agent to look for the Business Select fare. He was happy to do so and, after putting me on hold for 25 minutes or so, returned with the same fare I had found online.

Since Southwest flights can't be booked online, he also waived the $25 phone booking fee.

The call took a total of 44 minutes. If it seems strange that the call took almost as long as my call with Chase did even though the agent was able to accurately find the correct fare on his first try, the reason is the two lengthy holds he placed me on while calling Southwest.

Adding your Rapid Rewards number

Neither agent asked for a Rapid Rewards number to add to the reservations, and I didn't ask since I was getting pretty bored of waiting on the phone. However, both agents provided the Southwest confirmation number, which made it easy to pull up the reservations on Southwest.com. The Flexperks Rewards Center also provided an "agency" confirmation number they use internally — be sure you get the Southwest confirmation number as well.

Strangely, I was unable to add my Rapid Rewards number to my reservation while logged into Southwest.com. After logging out, however, I was able to pull up my reservation and manually add my Rapid Rewards number, and the reservation immediately appeared in my account.