The recent launch of Barclaycard’s two new Arrival card (one with no annual fee and one with an $89 annual fee that’s waived the first year) has shifted my thinking about the sphere of fixed-value travel points and the credit cards that earned them, so for today’s Maximize Monday post, I wanted to cover the various fixed-value points programs that are out there and ways you can make the most of them.
I usually focus on credit cards that earn transferable points but fixed-rate ones have a lot of value too.
I usually focus on credit cards that earn transferable points such as Chase Ultimate Rewards and American Express Membership Rewards that give me the flexibility to transfer points I earn into any of several different airline or hotel programs because I am able to get a lot more value on premium redemptions out of them since the amount of miles needed for awards in most programs isn’t pegged to the actual cost of the ticket.
However, there are a lot of good reasons to include fixed-value points – points that you redeem for travel, cash back or merchandise at a fixed rate that is usually around 1-2 cents each depending on what you want to redeem them for. The great thing about points and credit cards is that you don’t have to choose one kind- you can still have traditional miles/points for aspirational awards and then also take advantage of fixed value bonuses to help pay for day to day flights and travel expenses that can be redeemed for with normal airline miles.
One of the great things about these kinds of points is that you are essentially using them to “buy” travel via your credit card company, it’s the same as buying a ticket using money, so you can snag that last seat on a plane or the last available hotel room without having to worry about award availability – hence the “no blackout dates” marketing. The airlines also view these redemptions as purchases since the credit card company is basically buying the ticket for you and taking your points in exchange, so you also generally earn miles (including elite miles) on airline tickets purchased using them. To put it simply: your points are basically cash when you redeem them this way..
Fixed-value programs are best for people who want to redeem them for the following:
1) If you don’t have flexible travel dates and need to travel at peak times like during the holidays or school vacations.
2) If you want to earn elite miles on every flight in order to retain status
3) People who don’t like surprises or uncertainty when it comes to the value of their points
4) Travelers who redeem for cheap flights
On the other hand, these kinds of points do have some shortcomings, especially if you are looking to redeem points or miles for premium tickets such as business or first class seats on international routes. So if you educate yourself on the airline and hotel programs out there, you can usually reap much more value out of transferable or airline- or hotel-specific points.
I redeemed 125,000 AAdvantage miles for a ticket that would have cost $4,374, getting a value of about 3.5 cents per mile.
For example, for my recent trip from JFK to Sao Paulo in American Airlines new first class, I redeemed 125,000 AAdvantage miles for a ticket that would have cost $4,374, getting a value of just about 3.5 cents per mile, even with that high-level award. If I’d redeemed fixed-value points for the same ticket, I would have needed 437,300 points in most fixed value programs!
Now, I’d never actually pay full price for a first class ticket, but by using traditional award miles, I was able to snag it at a relatively reasonable rate (could have gotten it as low as 62,500 AA miles if saver availability existed), whereas with fixed-value points, I’d need to rack up nearly 3 times as many to get the same seat. However, to get decent value from your miles and points, you have to be flexible and know the program you are earning and redeeming in, whereas fixed-value programs make the whole process a lot simpler.
Here are my rankings of the top 5 fixed-value travel rewards credit cards out there based on their base earning/redemption levels – your own valuations will vary based on how much category bonus spending you do. Read on below for the specific details on these cards and more as well as the best current sign-up bonuses we have found (though if you have another deal that is better, please comment below and we will update the list).
1) Barclaycard Arrival (annual fee): 2.2% when redeeming for travel
Pro: Great sign-up bonus of 40,000 points
Con: Low value when redeeming for statement credits
2) Capital One Venture: 2%
Pro: Steady earning ratio at 2 miles per $1
Con: Low sign-up bonus of just 10,000 miles
3) US Bank Flexperks Travel Rewards Visa: 2% if you redeem for flights at the highest value in the redemption spectrum (award flight prices are in bands of values).
Pro: Ability to increase the value of your points with bonus spending categories
Con: It takes skill to redeem points for flights at the maximum value
4) Citi ThankYou Premier: 1.33%
Pro: Bonus categories earn 1.2 points per $1
Con: Annual fee of $125 is high
5) Discover It Card: 1% on most purchases in the form of cashback
Pro: Ability to earn up to 20% cashback by shopping through the ShopDiscover portal, no annual fee
Con: No sign-up bonus
You can find the current popular credit card offers in each along with their sign-up bonuses and redemption ratios and a quick-hit list of pros and cons of each. Note, you’ll only find the cards in each program whose points you can specifically redeem for travel, so while some other cards might accrue these kinds of points, you cannot use them for travel expenses. You’ll note that I’ve also included American Express Membership Rewards and Chase Ultimate Rewards because although these are transferable points programs (depending on which card you have), you can actually “pay with points” with each just like a fixed-value program.
PROGRAMS
Earn 25,000 points when you spend $2,000 in 3 months with the Amex Platinum Card.
American Express Membership Rewards
I prefer to transfer my Amex Membership Rewards to its travel partners and redeem for premium awards that way, but you can also use these points with Amex’s Pay With Points feature and redeem them directly for travel. Sometimes it makes sense to use Pay With Points instead of transferring to airline or hotel partners because you get more value out of your points that way than with a redemption. The break-even point would be getting 1 cent per point with Pay With Points on Amex (except the Business Platinum card).
Premier Rewards Gold
Current Bonus: 25,000 points when you spend $2,000 in 3 months
Annual Fee: $0 first year then $175
Earning: 3X points on airfare, 2X points on gasoline at U.S. stand-alone gas stations, supermarkets and 1X points on other purchases
Redeeming: 1 point per $1 with Pay With Points
Value: Between 1% and 3% depending on whether you are spending in the bonus categories
Business Gold Rewards
Current Bonus: None
Annual Fee: $0 first year then $175
Earning: 3X points on airfare, 2X points in the US for advertising in select media, gasoline at standalone stations and shipping, 1X on other purchases
Redeeming: 1 cent per point
Value: Between 1-3% depending on your spending habits
Platinum Card
Current Bonus: 25,000 points when you spend $2,000 in 3 months
Annual Fee: $450
Earning: 1 point per $1
Redeeming: 1 cent per point on Pay With Points (this recently changed – it used to be 1.25 cents per point like the Business Platinum card below still offers)
Value: 1%
Mercedes-Benz Platinum Card
Current Bonus: 50,000 points when spending $1.000 in 3 months
Annual Fee: $475
Earning: 5 points per $1 on Mercedes-Benz purchases, 1 point per $1 on everything else.
Redeeming: 1.25 cents per point.
Value: Between 1% and 5% if you’re using your card to make Mercedes-Benz purchases.
Business Platinum
Current Bonus: 25,000 points when you spend $5,000 in 3 months
Annual Fee: $450
Earning: 1 point per $1
Redeeming: 1.25 points per dollar when redeeming for Pay With Points
Value: 1.25%
Blue Sky Preferred
Current Bonus: None
Annual Fee: $75
Earning: Earn 2X points at US restaurants, hotels and car rentals, 1X on other purchases.
Redeeming: For every 7,500 points you redeem for travel expenses, you get a $100 cash-back statement credit. This card also gives you a yearly $100 airline allowance to use on incidental fees.
Value: 1.33-2.66% back on your spending
Blue Sky
Current Bonus: None
Annual Fee: $0
Earning: 1 point per $1 on purchases
Redeeming: For every 7,500 points you redeem for travel expenses, you get a $100 cash-back statement credit.
Value: 1.33% back on your spending.
Again, it would be pretty unusual for me to use my Amex points on Pay With Points redemptions where I’m just getting one cent per point (and at most a 3% return on my spending) when I can get much more value out of them by redeeming them for premium travel experiences, but when award availability is tight, it’s nice to know I have this option as well. That said, if fixed-value points are your goal for now but you might consider getting a premium Amex card in the future so you can transfer Membership Rewards points to partners, consider one of the Blue Sky cards (depending on how much of your spending is on restaurants, hotels and car rentals) to at least get a 1.33-2.66% return on your spending at the fixed rate for now.
Barclaycard
Barclaycard has just launched two versions of its Arrival card, which could change the whole fixed-rate equation thanks to their earning structure and a 10% points refund.
The Barclaycard Arrival World Mastercard gives a 10% points refund.
Barclaycard Arrival World MasterCard – With $89 Annual Fee
Current Bonus: 40,000 points when you spend $1,000 in 90 days
Annual Fee: $0 first year then $89
Earning: Earn 2 miles per dollar on all purchases
Redeeming: Redeem at a rate of 1 cent per mile for travel and 1 cent per 2 miles on all other redemptions
Value: In terms of travel redemptions, you’re getting a value of 2.2% back on your spending thanks to the card’s 10% mileage refund, but with cash back and other merchant redemptions, you’re only getting a value of 1% return on your spending.
Barclaycard Arrival World MasterCard – No Annual Fee
Current Bonus: 20,000 points when you spend $1,000 in 90 days
Annual Fee: $0
Earning: Earn 2X miles on travel and dining and 1 mile per dollar on everything else.
Redeeming: Same as card with annual fee
Value: Your value back on this card ranges from 0.5% on non-bonus category purchases when you redeem for cash back up to 2.2% if you only use this card in the bonus categories and redeem solely for travel.
Both cards are World Mastercards and do not have foreign transaction fees, so they’ve got some valuable perks that make them great to carry when traveling. Because the bonus is twice as much for the same minimum spending, the annual fee is waived, and you earn 2X miles on all purchases, I’d personally apply for the Arrival card with the $89 annual fee since you know you’re getting a return of 2.2% on travel redemptions at all times and that annual fee isn’t due for a year, so you have all that time to put the points to use before deciding whether or not to keep the card, though if you do, it means earning about 4,050 more points than you could with the no annual fee card to make up for the $89 annual fee.
Capital One Venture Rewards
Probably the program that everyone knows the best with its “no hassle rewards” and “what’s in your wallet?” marketing. Capital One offers some very competitive cards that provide potentially great return on your spending if you value the reward fixed-value points can get you.
Capital One Venture
Current Bonus: 10,000 miles when you spend $1,000 within 3 months.
Annual Fee: $59 waived the first year
Earning: 2 miles per dollar on every purchase
Redeeming: 1 cent per mile when redeemed for travel or cash-back statement credits
Value: Because you earn 2 miles per dollar on every purchase and can then redeem those miles for travel at the rate of 1 cent each, your return is 2%.
Capital One Venture One
Current Bonus: 10,000 miles when you spend $1,000 within 3 months.
Annual Fee: $0
Earning: 1. 25 miles per dollar on every purchase
Redeeming: 1 cent per mile, can only be applied toward travel purchases in the form of statement credit.
Value: Your return here is a bit lower at just 1.25% thanks to this card’s lower earning structure.
Both cards are Visa Signatures and carry no foreign transaction fees. The Capital One Venture’s 2X earning structure makes it one of the frontrunners in this category since a constant 2% return is among the highest you can get with these kinds of points.
Chase Ultimate Rewards
Although I get the most value from my Ultimate Rewards points by transferring them to partners like United and Hyatt and redeeming them for first/business class suites or nights at top-tier hotels, when award availability is scarce, you can also redeem Ultimate Rewards points directly for travel through the Ultimate Rewards travel portal. However, which card you has determines how much your points are worth.
Sometimes it makes sense to use Pay With Points instead of transferring to airline or hotel partners because you get more value out of your points that way than with a redemption. The break-even point would be getting 1.25 cents per point with Sapphire Preferred or Ink Bold or Plus. For instance, if you wanted a domestic roundtrip economy award ticket on United, that would cost you 25,000 Ultimate Rewards points. If you were to redeem those points directly by paying with them, they would be worth a value of $312.50 if you had either the premium Ink or Sapphire Preferred cards. If your ticket is worth less than that, redeeming points directly might be the way to go since you’ll be spending less than 25,000, but if it’s more than that and there’s award availability, go for the transfer and award redemption to reap more value from your points.
Earn 10,000 points when you spend $500 in 3 months with the Chase Freedom and then maximize those points with the card’s 5X bonus spending categories.
Freedom
Current Bonus: 10,000 points when you spend $500 in 3 months
Annual Fee: $0
Earning: 1 point per $1 on most purchases, 5X points per dollar on the first $1,500 you spend at merchants quarterly rotating bonus spending categories
Redeeming: Get 1 cent per point you redeem for travel and cash back.
Value: Although you’re just getting a return of 1% on most redemptions, if you maximize your bonus spending, you could be getting as much as a 5% return on your spending thanks to those quarterly rotating categories. However, if you have one of the premium cards listed below, that high goes up to a potential 6.25% if you combine your Ultimate Rewards account and redeem through the Sapphire Preferred or Ink travel portal.
Sapphire
Current Bonus: 10,000 points when you spend $500 in 3 months
Annual Fee: $0
Earning: Earn 2 points per dollar at restaurants and 1 point per dollar everywhere else
Redeeming: 1 cent per point for travel or cash back.
Value: Like the Freedom card, you’re only getting a 1% return on your spending for the most part, and up to 2% if you’re just spending at restaurants using this card, but if you combine your points from this account with those from a premium credit card below, you’re potentially getting another 25% bump in the value of your points.
Sapphire Preferred
Current Bonus: 40,000 points when you spend $3,000 in 3 months
Annual Fee: $95 waived the first year
Earning: Earn 2X points per $1 on travel and dining, 1X on everything else
Redeeming: When redeeming for pay-with-points through the Ultimate Rewards portal, this card yields a value of 1.25 cents per point, otherwise you get 1% for cash back and statement credits.
Value: Your value back will vary between 1% and 2.5% on your spending depending on how much of it you do on the bonus categories of travel and dining. You’re actually getting a little bit more than that – 1.07-2.675% to be exact – thanks to this card’s 7% annual points dividend.
Ink Classic
Current Bonus: 20,000 points when you spend $3,000 in 3 months
Annual Fee: $0
Earning: Earn 5X points per dollar on the first $25,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services; earn 2X points per dollar on the first $25,000 spent annually at gas stations and for hotel accommodations when purchased directly with the hotel; earn 1 point per dollar on all other card purchases
Redeeming: When redeeming for pay-with-points through the Ultimate Rewards portal, this card yields a value of 1.25 cents per point, otherwise you get 1% for cash back and statement credits.
Value: Your value will vary between 1.25% for everyday purchases to 2.5% for gas and hotel purchases all the way up to 6.25% for purchases in the 5X category – all subject to annual spending caps.
Ink Bold
Current Bonus: 50,000 points when you spend $5,000 within 3 months.
Annual Fee: $0 first year then $95
Earning: 5X points per $1 on the first $50,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services; 2X points per $1 on the first $50,000 spent annually at gas stations and for hotel accommodations when purchased directly with the hotel; 1X on everything else.
Redeeming: When redeeming for travel through the Ultimate Rewards portal you get 1.25 cents per point, otherwise you get 1% for cash back and statement credits.
Value: Depending on where you use this card, you could be getting a value back of between 1.25% (for everyday purchases in non-bonus categories) to 2.5% (for hotels and gas) to a whopping 6.25% if you are spending in the 5X category.
Ink Plus
Current Bonus: 50,000 points when you spend $5,000 within 3 months.
Annual Fee: $0 first year then $95
Earning: 5X points per $1 on the first $50,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services; 2X points per $1 on the first $50,000 spent annually at gas stations and for hotel accommodations when purchased directly with the hotel; 1X on everything else.
Redeeming: When redeeming for travel through the Ultimate Rewards portal you get 1.25 cents per point, or 1% back for statement credits and cash back.
Value: Depending on where you use this card, you could be getting a value back of between 1.25% (for spending on everyday purchases in non-bonus categories) to 2.5% (for hotels and gas) to a more impressive 6.25% if you are spending in the 5X category.
The best earning/redeeming strategy with Chase Ultimate Rewards – not only if you’re just interested in pay with points – is carrying a combination of one of the basic cards (I prefer the Freedom thanks to its 5X bonus spending categories) and the premium card like the last three so that you can combine your points and redeem them at the higher rate of 1.25 cents per point through one of the premium portals. When you do that, you hit a potential return on spending of 6.25%. It’s also a good option to have in your back pocket in case award availability is scarce.
Citi’s fixed-value program offers some good values with between a 1-2.66% return.
Citi ThankYou Rewards
Citi’s fixed-value program offers some good values with between a 1-2.66% return on your dollar depending on your spending and redemption habits and which cards you carry.
Citi ThankYou Premier
Current Bonus: 25,000 points after spending $1,000 in 3 months
Annual Fee: $125 annual fee waived the first year
Earning: Earn 1.2 points per dollar at supermarkets, gas stations, drugstores, commuter transportation and parking merchants and 1 point per $1 on all other purchases
Redeeming: 1.33 cents per point when redeeming for travel, 1 cent per point on merchandise, gift cards and statement credits.
Value: Based on the redemption options, you are getting between 1.33% and about 1.6% return on your spending.
Citi ThankYou Preferred
Current Bonus: 15,000 ThankYou points after $1,000 spending in 3 months
Annual Fee: $0
Earning: Earn 1 ThankYou point for every $1
Redeeming: Redeem at 1 cent per point for travel
Value: 1% return on your spending.
Given the option, I’d choose the Citi ThankYou Premier card over the Citi ThankYou Preferred because of its higher redemption power and bonus – although bonuses on this card have historically been as high as 50,000 points so I might wait for that to come around again before applying. Its $125 annual fee (waived the first year) is a consideration, but the card has other benefits like an annual points bonus of between 1-5% depending on how long you’ve had the card, and it is also a Visa Signature and waives foreign transaction fees, so it could be a good one to carry while traveling abroad.
Discover
Although you can redeem the points you earn with Discover cards for cash back rather than specifically having to redeem them for travel expenses, I wanted to include these
Discover It Card
Current Bonus: None
Annual Fee: $0
Earning: 1% cashback on all purchases, 5% Cashback Bonus on a rotating selection of merchants (April-June is home improvement), 5-20% cashback bonuses on purchases through ShopDiscover portal.
Redeeming: Redeem points for 1 cent each in cash back
Value: 1% on base earning, 5% on bonus spending categories and up to 20% on spending through the ShopDiscover portal
Discover It Student Card
Current Bonus: None
Annual Fee: $0
Earning: Up to 1% cashback on all purchases, 5% Cashback Bonus on a rotating selection of merchants (April-June is home improvement)
Redeeming: Redeem points for 1 cent each in cash back
Value: 1% on base earning, 5% on bonus spending categories and up to 20% on spending through the ShopDiscover portal
Discover Open Road Card
Current Bonus: None
Annual Fee: $0
Earning: 2% cash rewards on your first $250 in gas and dining purchases each billing period, 1% on everything else
Redeeming: Redeem points for 1 cent each in cash back
Value: 1-2% on base earning and up to 20% on spending through the ShopDiscover portal
Discover Student Open Road Card
Current Bonus: None
Annual Fee: $0
Earning: 2% cash rewards on your first $250 in gas and dining purchases each billing period, 1% on everything else
Redeeming: Redeem points for 1 cent each in cash back
Value: 1-2% on base earning and up to 20% on spending through the ShopDiscover portal
Although most of what you spend will earn just 1% cash back with these cards, the beauty is that you can earn up to 20% cash back when shopping through Discover’s online shopping portal, and you can put that cash back towards anything, including travel.
US Bank FlexPerks
FlexPerks Travel Rewards Visa Signature
Current Bonus: 17,500 FlexPoints after the first $2,500 in net purchases in the first 150 days
Annual Fee: $49 waived the first year
Earning: 3 points per $1 on charitable donations, 2 points per $1 spent on gas, groceries or airline purchases (whichever you spend the most on in a billing cycle) and most cell phone expenses, 1 point per $1 on everything else.
Redeeming: The redemption schedule yields values of between 1.33-2 cents per point.
Value: You are earning a potential of between 1.33-6% back on your spending with this card though the high end of that spectrum would mean you’re only spending on charity.
FlexPerks Business Travel Rewards Visa Signature
Current Bonus: 17,500 FlexPoints after the first $2,500 in net purchases in the first 150 days
Annual Fee: $55 unless your company spends more than $24,000 in a calendar year.
Earning: Earn 3 FlexPoints per $1 on charitable donations, 2 FlexPoint per $1 on gas, office supply or airline purchases (whichever you spend the most on in a billing cycle) and most cell phone expenses, 1 FlexPoint per $1 on all other purchases.
Redeeming: Same as FlexPerks Visa Signature
Value: Same as personal card.
FlexPerks Select Rewards
Current Bonus: 5,000 when you spend $250 or more within 90 days
Annual Fee: $0
Earning: 1 point per $2 spent
Redeeming: Same as FlexPerks Visa Signature
Value: Because you earn just 1 point per $1 on all purchases, you’re essentially cutting your value in half – at best to between 0.5-1% value back.
Pen Fed
The Premium Travel Rewards American Express has four key features:
Current Bonus: 20,000 points when you spend $650 within three months.
Annual Fee: 0
Earning: 5 points per dollar spent on airfare, 1 point per dollar on everything else
Redeeming: Points can be used for travel at about 1.5 cents per point for flights and 1 cent for merchandise. on fees.
Value: 1.5% standard on travel and up to 6.5% back when you purchase airfare and redeem for airfare.
The premium and personal and business cards offer some great additional perks like 5,000-point bonuses for referring friends who get the card, and that 3,500 annual spending bonus on the personal card (potentially worth $70) and Platinum banking customer bonuses. At most with the premium personal card that would earn you up to 3.5 points per dollar and provide the potential of getting 7% of your value back, though you’d have to do a lot of charitable spending in order for that to happen. The premium cards also have SmartChips, but levy foreign transaction fees, so I wouldn’t use them abroad.