Bank operated reward systems are not as complicated as the airline’s frequent flier programs, but they do have their nuances. It is a poorly understood reality that most of these programs have several different reward options, depending on which credit cards the customer holds. Some cardholders may only be able to redeem their points for gift cards while other can transfer them to more valuable airline miles. In other instances, travel awards can reimbursed at a higher rate, but only if the customer has the right card. What even fewer cardholders realize is that the points they have already earned can be worth far more, so long as they receive the right card before they redeem their points for an award.
How to upgrade existing points
Take the Ultimate Rewards program from Chase. Holders of the Freedom card or the standard Sapphire card can only redeem their points for gift cards, statement credits, or cash back or other options at a rate of one cent per point. However, if a cardholder later receives an Ink Bold, Ink Plus, Sapphire Preferred, JP Morgan Select, or Palladium card, the points they have already earned can now be redeemed for airline miles or hotel points. Cardholders can simply log into their Chase account and move points from one of their accounts to the other. In the case of the Sapphire Preferred, cardholders can also get an additional 25% more value added on to their travel bookings made with points.
With American Express Membership Rewards, there is the standard tier that offers gift cards, direct travel bookings, and airline point transfer award options. But there is also their Membership Rewards Express program which does not offer the airline point transfer award option. Fortunately, cardmembers who earned these less valuable points can still apply for a card that features the more valuable point redemption options. After receiving a card that features the airline point transfer award options, they can then transfer the points they already earned to airline miles with one of 16 different frequent flier programs.
Finally, the Citi ThankYou points program also has a similar issue. There are many ways to earn ThankYou points which can be redeemed for airfare booked through Citi at a rate of one cent per point. But if a cardholder later acquires a Citi ThankYou Premier card, their existing points then becomes 33% more valuable.
By understanding how bank rewards programs work, and when points are more valuable, cardholders can strategically earn and redeem points in order to receive the most valuable rewards.