Earning and redeeming points from travel rewards credit cards can be a challenging endeavor. Whether it’s remembering which one offers the best earning rates at certain merchants or figuring out which transfer partner offers the best redemption rate, there’s a lot of complexity. Many of my friends and family members prefer simpler products, especially ones with points that can be redeemed for a fixed value. Today I want to compare the most popular and rewarding credit cards in this category.
Before getting into the analysis, a few notes about how I selected the below cards. This post focuses on cards for which the best redemption isn’t cash back — after all, why not take the cash back when that’s the best redemption? As a result, the Bank of America Premium Rewards credit card and Discover it® Miles are excluded since cash back is as good of a redemption as any other for these cards. Likewise, the Citi Double Cash Card and other cash-back cards are excluded since the only redemption option is cash back. This post instead considers the best credit cards with points that can be redeemed for a fixed value.
Barclaycard Arrival Plus World Elite Mastercard
Sign-up bonus: 70,000 bonus miles after spending $5,000 on purchases in the first 90 days
Earning rates: 2x miles on all purchases (plus a 5% rebate on redeemed miles)
Redemption options: Redeem for travel credits/annual fee (1 cent per mile), gift cards/cash back (0.5 cents per mile) or merchandise (redemption values vary)
Additional perks: No foreign transaction fees, international chip and PIN
Annual fee: $89 (waived for the first year)
Analysis: The Barclaycard Arrival Plus World Elite Mastercard is a popular one for fixed-value redemptions, and one of its most appealing features is the simplicity. Every card holder enjoys the same earning rates: 2x miles on every purchase. No need to only use the card on certain purchases or worry about a merchant not qualifying as a bonus category. You’ll earn double miles every time you swipe the card.
The redemption side is also relatively lucrative, as long as you’re redeeming your miles to cover travel purchases or annual fee. Both types of redemptions are available at a rate of 1 cent per mile, but you’ll also receive 5% of your redeemed miles back. Thus, if you’re looking to cover $100 worth of checked bag fees, you’ll redeem 10,000 miles but then get 500 miles back. This boosts your overall redemption value to just over 1.05 cents per mile, so your overall return on spending is roughly 2.11%. Keep in mind, however, that the minimum threshold to redeem your miles for travel purchases is 10,000 points and the minimum to redeem your miles toward the annual fee (after the first year) is 2,500 miles. But, even with these limitations, the valuable sign-up bonus and having a card with a return of 2.11% on all purchases make the Arrival Plus quite attractive.
U.S. Bank FlexPerks Travel Rewards Visa Signature CardSign-up bonus: 25,000 points after you spend $2,000 in net purchases within the first four months of account opening
Earning rates: 2x points at airlines, gas stations or grocery stores (whichever category you spend the most in each month will earn 2x, the others will earn 1x); 2x points with cellular providers and at charities; 1x point everywhere else
Redemption options: Redeem for airfare, hotel stays and car rentals at 1.5 cents per point, other lower value redemptions are available
Additional perks: $25 airline allowance per award ticket; no foreign transaction fees; real-time mobile rewards
Annual fee: $49 (waived for the first year)
Analysis: The U.S. Bank FlexPerks Travel Rewards Visa Signature Card doesn’t look impressive at first glance. But, it is one of the few cards to provide bonus earning when donating to charities, and it is also one of the only cards to provide the same redemption value (1.5 cents per point) for flights, hotels and car rentals booked though the bank’s portal and independently. Indeed, if you set up the card’s real-time mobile rewards for these travel categories, you’ll receive a text message once eligible travel purchases post that asks whether you’d like to redeem points toward the purchase.
There are some restrictions though. You’re only eligible for the $25 airline allowance on award tickets booked through the bank’s travel portal. And, there’s a minimum of $250 for car rentals and $500 for lodging if you want to use real-time mobile rewards to offset these purchases. The 1.5% return on everyday purchases, 3% return on certain categories, low annual fee ($49, waived the first year) and $25 airline allowance per award ticket booked through the bank’s portal make this card a solid value proposition for many travelers. But, this card is particular appealing to travelers that want to use their points at maximal value to book flights on any airfare, including those that normally don’t show up in bank portals.
U.S. Bank Altitude Reserve Visa Infinite CardSign-up bonus: 50,000 points after you spend $4,500 in net purchases within the first 90 days of account opening
Earning rates: 3x points on travel and mobile wallet purchases; 1x points everywhere else
Redemption options: Redeem for airfare, hotel stays and car rentals at 1.5 cents per point, other lower value redemptions are available
Additional perks: $325 annual travel credit; 12-month Priority Pass Select membership (after the first year the first four visits and four individual accompanying guest visits are waived each Priority Pass Select membership year); 12 complimentary Gogo inflight Wi-Fi passes per year; up to $100 statement credit to reimburse your Global Entry or TSA PreCheck application fee once every four years; no foreign transaction fees; real-time mobile rewards
Annual fee: $400
Analysis: The U.S. Bank Altitude Reserve Visa Infinite Card is a premium version of the U.S. Bank FlexPerks Travel Rewards Visa Signature Card. The card’s annual fee is effectively $75 if you utilize the annual travel credit, which should be easy enough to do since purchases made directly from airlines, hotels, car rental companies, taxis, limousines, passenger trains and cruise lines are all eligible. Real-time mobile rewards work the same as for the U.S. Bank FlexPerks Travel Rewards Visa Signature Card. So, if you like the ease of booking and getting easily reimbursed using the real-time mobile rewards framework, you simply need to decide which card’s benefits and bonus earning categorizes align best with your needs.
Redeeming Transferable Points at a Fixed RateAlthough this post is focused on fixed-value point credit cards, it wouldn’t be complete without discussing how some transferable currencies can be redeemed at a fixed value. Generally, you can get a lot more value from transferable currencies by transferring your points to make a high-value redemption. But, it’s certainly less complicated to redeem at a fixed value. Plus, if you redeem your points toward airfare you’ll still earn airline miles since your booking will be treated as a revenue ticket. Here are the best fixed-value redemption options for each of the most popular transferable currencies.
Capital One Miles
Until Capital One recently added transfer partners, the Capital One Venture Rewards Credit Card would’ve been included above. But, although Capital One miles can now be transferred to 14 airline partners, they can also still be used at a value of 1 cent each toward (1) erasing a previously made travel purchase, (2) booking new travel through Capital One’s travel portal or (3) redeeming for gift cards.
Chase Ultimate Rewards Points
Three cards — the Chase Sapphire Reserve, Chase Sapphire Preferred Card and Ink Business Preferred Credit Card — earn full-fledged Chase Ultimate Rewards points, although the Chase Freedom, Chase Freedom Unlimited, Ink Business Unlimited Credit Card and Ink Business Cash Credit Card can also earn full-fledged Ultimate Rewards points if you also hold one of the three primary Ultimate Rewards-earning cards.
TPG values Ultimate Rewards points at 2 cents apiece, but this is based on the value that can be obtained by transferring the points. If you book travel though the Ultimate Rewards travel center each point is worth 1.5 cents if you have the Chase Sapphire Reserve, 1.25 cents if you have the Chase Sapphire Preferred or the Ink Business Preferred, or 1 cent if you only hold a Chase Freedom, Chase Freedom Unlimited, Ink Business Unlimited Credit Card or Ink Business Cash Credit Card. You can also redeem your Ultimate Rewards points for statement credits or gift cards for 1 cent each.
Citi ThankYou Rewards Points
Two cards — the Citi Prestige Card and Citi Premier Card — earn full-fledged Citi ThankYou Rewards points. However, various other Citi cards can earn full-fledged ThankYou points if you also hold the Citi Prestige or Citi Premier.
You’ll usually get the most value for your ThankYou points by transferring them to one of the program’s 15 travel partners. But, if you’re a Citi Premier or Citi Prestige (until Sep 2019) card holder you can also redeem your ThankYou at a flat 1.25 cents each toward airfare through the Citi ThankYou Travel Center. If you only have a Citi card that earns “basic” Citi ThankYou points, then you’ll only be able to redeem them at a rate of 1 cent per point.
Amex Membership Rewards Points
Many Amex credit cards earn Amex Membership Rewards points. As with other transferable currencies, you’ll often get better value from your Membership Rewards points by transferring them to one of the program’s 21 travel partners.
But, if you don’t want to transfer your points you can also apply 5,000 Membership Rewards points or more to pay the full or partial amount of airfare booked through Amex Travel at a value of 1 cent per point. You can also use your points to book prepaid hotels, vacations, or cruises through Amex Travel, but you’ll only get a value of 0.75-0.85 cents per point for these types of bookings. There is one exception to these redemption values: if you have The Business Platinum® Card from American Express you can redeem points for an airline of your choice (it must be the same airline you choose for the $200 fee credit) and receive 35% of your redeemed points back.
Bottom LineDiversifying your points and miles is a critical strategy in this hobby, and fixed-value credit cards represent a great way to do that. The three purely fixed-value cards discussed above all have compelling cases — the best one for you will depend on your spending habits. But, you may find that a transferrable rewards card that also allows you to get decent value when you book through its travel center is a better value, especially if you may want to transfer points periodically to top off loyalty account balances for redemptions.
Additional reporting by Katie Genter.
Featured image by Eric Helgas for The Points Guy.
Apply for the Starwood Preferred Guest® Credit Card from American Express here before it closes applications forever on Feb. 12!
If you haven’t been following along, the Marriott program will soon go by the name of Bonvoy. With that will come a rebranding of the cobranded credit cards, and the closure of the Starwood Preferred Guest® Credit Card from American Express to new applications.
The last day to sign up for the SPG Amex is Feb. 12, 2019. Although the card will close to new applicants, it won’t be discontinued completely, meaning existing accounts won’t be closed or converted into another product. Instead, the card will be renamed to the Marriott Bonvoy Amex and retain its existing perks for card holders who are approved before the cutoff date. These perks include its annual free night certificate (up to 35,000 points) provided at each account anniversary, complimentary Silver Elite status and a 6x earning rate at Marriott hotels.
Once closed, the only entry-level personal Marriott credit card available to new applicants will be the Marriott Bonvoy Boundless Card (currently known as the Marriott Rewards Premier Plus Credit Card). Although both cards offer the same key benefits and earning rates, there are pros to carrying discontinued credit cards. Let’s take a look at why you might want to pick up the SPG Amex before applications are shuttered forever.
75,000-Point Welcome BonusThe SPG Amex is currently offering new card holders 75,000 points after spending $3,000 on the card within the first 3 months. Worth a solid $675 based on TPG’s latest valuations, this isn’t a welcome bonus you’d necessarily want to pass up on.
Best of all, although Marriott has restrictions on earning welcome bonuses, you will still be able to earn the welcome bonus on other cobranded cards later down the line. So, if you’re holding off on applying for a Marriott card now in hopes of getting a better welcome bonus in the future, you don’t need to. Likewise, it’s important to note that you won’t be able to earn the bonus on this card if you currently have or have had any of the personal Marriott or Ritz-Carlton Chase cards in the last 30 days.
Photo courtesy of the JW Marriott Los Cabos Beach Resort & Spa.
Annual Fee Waived First Year
The SPG Amex and the Marriott Premier Plus both carry a $95 annual fee. However, only the SPG Amex offers a $0 introductory annual fee for the first year (See Rates & Fees). This means you’ll have 12 months to effectively try out the card and reap its benefits (including the welcome bonus) without paying anything at all. And when each successive annual fee hits starting with the first one, it’ll be accompanied by the free night certificate.
Bypass 5/24Once the SPG Amex is phased out, Marriott’s entry-level cards will be issued solely by Chase and subject to the issuer’s dreaded 5/24 rule for approval. This means that if you’ve opened more than five credit cards in the past 24 months (from all banks, not just Chase), you won’t be approved for one of these cards. So, if you’re well over 5/24 and want an entry-level Marriott card, now’s the time to apply. Otherwise, you’ll have to commit to the Amex-issued $450 Marriott Bonvoy Brilliant (currently known as the Starwood Preferred Guest® American Express Luxury Card (See Rates & Fees).
Limited-Edition Card DesignWhile you obviously shouldn’t apply for a credit card for aesthetic reasons alone, the SPG Amex’s new look is promising and will probably warrant a spot on our ranking of the prettiest credit cards — though reader opinions are very divided.
American Express collaborated with mural and studio artist Tony “Rubin” Sjöman on a limited-edition card design, with an abstract, city-inspired motif. The design is sure to look a whole lot more interesting than the rest of the rebranded cards. Card members can expect to receive the new cards starting in May.
If you don’t already have an entry-level Marriott card, you’ll almost certainly want to apply for the SPG Amex before it bites the dust. Even if you don’t frequent Marriott properties, the card’s anniversary free night certificate should make it easy to get outsized value from its modest annual fee. Just remember that the SPG Amex is only available until Feb. 12, 2019, so you’ll need to act fast if you want to grab it, or forever hold your peace.
For rates and fees of the SPG Amex Card, please click here.
For rates and fees of the SPG Luxury Card, click here.
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