Are Chase Ultimate Reward Points Devaluing?

About a year and a half ago I wrote an 8 post series on the Chase Ultimate Rewards program. During this time I wrote a whole analysis on the best transfer partners for redeeming your points (Best Redemption for Chase Ultimate Reward Points – Hotel Stays; Best Redemption for Chase Ultimate Reward Points – Air Travel)

At the time, I said that the best hotel transfer partner was Hyatt and the best airline transfer partner was United and British Airways. Well out of the three, two just recently devalued their points pretty significantly (related posts: United Devaluation; Hyatt Devaluation).

Remember, with the Chase Ink Plus and Chase Ink Bold cards, you can use the “Pay with Points” option to redeem at a flat 1.25 cents per point. So when transferring to a partner you want to ensure that you get more value than that. And with the “Pay with Points” option you earn points while burning points, so there is some benefit there. Due to this option, that is why transferring to Marriott, Ritz Carlton, and InterContinental loyalty programs is 99% of the time not a good idea. And with Southwest’s upcoming devaluation in March, your Chase UR points will also be worth less if Southwest is your go-to-program.

So are Chase Ultimate Reward points as valuable going forward as they once were? The answer really comes down to how you use your points. If you typically use the “Pay with Points” option then they are just as valuable. 50,000 points still equals $625 in FREE travel (for Chase Ink Bold/Plus/Sapphire Preferred cardholders)! If you like transferring your points to British Airways, then again they are still just as valuable. But, if your go-to-programs were Hyatt, United, or Southwest you might have to transfer more points for the same free flight or free hotel room.

Changes per partner:

• Hyatt:
  • If you typically redeem at category 1-4 hotels for a standard room, then there will be no changes for you! If you prefer to redeem at category 1-4 hotels for regency club rooms or suites, then you will be affected.
  • If you redeem at category 5 or 6 hotels, you’ll have a 11%-14% increase in the amount of points you will have to use.
  • If you like to redeem at the Park Hyatt Beaver Creek, Milan, Paris, Sydney, Tokyo and Zurich, you’ll be looking at a 36% increase!
  • If you like to use your points for suite upgrades on paid stays you might want to think twice! This is increasing as much as 300%!!!
• United:
  • If you typically redeem for domestic flights, there will be no changes for you!
  • If you like to fly United operated flights internationally, you will be affected slightly
  • If you like to fly United partner flights, you better start saving your points – those flights are going up a ridiculous amount
• Southwest:
  • When the devaluation takes place, points will be worth a fixed 1.43 cents per point. Still better than the “Pay with Points” option (and you cannot book Southwest flights through Chase anyways).

With all that being said, I think you can still get a nice value out of your points. Just make sure you are getting more than 2 cents per dollar, or it is worth moving over to a cash back card – for example one of the CapitalOne cards (CapitalOne Venture you get 2 cents per point) or the Barclaycard Arrival World MasterCard (giving you 2.2 cents per point).

And remember, the Chase cards have some of the best spend bonuses around:

• The Chase Sapphire Preferred has 2x points on all travel and dining! You also get a 20% discount when using the “Pay with Points” option, so this is still better than cash back cards.
• The Chase Ink Bold and Chase Ink Plus gives 5x points on all business purchases (office supply stores, phone, internet, etc. up to $50,000 spend) and 2x points at gas stations, hotels, and motels (up to $50,000 spend). And similar to the Chase Sapphire Preferred, you still get a 20% discount when you use the “Pay with Points” option. If you are into manufactured spend this is by far the best credit card around even with the devaluation.
• The Chase Ink Cash and Chase Ink Classic also gives 5x points on all business purchases (office supply stores, phone, internet, etc. up to $25,000 spend) and 2x points at gas stations, hotels, and motels (up to $25,000 spend). With no annual fee, these cards are great if most of your spend is in the business purchase categories. And you do not have to worry about the devaluation as you can only use the “Pay with Points” option with this card.

So while I hate to see programs devalued, I still think Chase Ultimate Reward points are incredibly valuable – especially since there are so many great partner opportunities. You just might need to be a little more creative and picky with how you use your points.

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