Transferable Points Programs: Maximize Your Credit Card Rewards

What Is a Transferable Points Program?

Transferable points programs give cardholders flexibility in how they use credit card rewards. They allow points earned on a single card to move across multiple airline and hotel loyalty programs, which can help maximize value as programs change over time. Choosing the right card depends on personal travel habits and how often those transfer options are used.

How Transferable Points Programs Operate

Transferable points programs offer options for customers, where one program might have four different airlines included. In that case, you could transfer your credit card rewards to any of those four airlines' loyalty programs. Let's assume, for example, you've been a lifelong United Airlines flyer. You decide you want to take a trip to Europe. Unfortunately, using your United miles might not be the cheapest option for you. Luckily, you have points with a transferable points program that includes both United Airlines and British Airways. Because flying to Europe with British Airways' partner, American Airlines, is cheaper than United, you've just saved yourself miles for a future trip.

The Flexibility of Transferable Points Programs Explained

It's important to know how much flexibility a certain program provides, and how much flexibility you need. For example, American Express may allow you to transfer points to 17 different airlines, while Chase may only offer six different options. Keep in mind, you will most likely end up paying for more flexibility one way or another. You may receive smaller rewards for your purchases from more flexible programs, or you may pay a higher annual fee than if you choose a less flexible one.

Transferable points can be beneficial when a points partner changes its program in a way that reduces the value of the points you have earned. Airlines and hotels have the right to change their rewards programs whenever they choose, which can be detrimental to points holders. Another benefit of transferable points is the ability to take advantage of transfer bonuses. Credit card companies often offer discounts on transferring points to certain partners. For example, a credit card company may offer a 25% discount to rewards members who transfer points to a specific airline during a certain month.

Choosing the Right Credit Card for Transferable Points Benefits

While transferable points are a great benefit for some, they're not the only factor to consider when selecting a credit card. If you fly on the same airline the majority of the time, you may be able to get better rewards through a credit card that is co-branded with that specific airline. Or if you don't travel very often, a card that offers cash back may be a better choice for you.

The Bottom Line

Transferable points programs provide flexibility by allowing points to move among various airline and hotel partners. Evaluating transfer partners, possible fees, and occasional transfer bonuses can help preserve or improve point value as program terms change. Matching the program to personal travel habits helps determine whether transferable points or a co-branded card makes more sense.