Congratulations you have now learned the importance of Travel Rewards and how to earn more points in one year than your neighbors or Facebook friends will earn in a lifetime. Now, what the heck do you do with them?
The 3 options for redeeming Chase Ultimate Rewards® points
These Chase Ultimate Rewards® points are chilling in your account until you choose to use them. The first and WORST option is to redeem them for cash (note the bold, ALL CAPS intended to indicate that this is a bad idea). If you decide to redeem them for cash, You get a redemption rate of 1¢ per point. So for every 50,000 points, you earn you would get $500. $500 is not bad compared to your average cash back card, but we can do much better.
Option 2 is to book your travel through the Ultimate Rewards portal. This is probably the easiest and most simple travel redemption method. Chase has their own travel search engine which looks similar to Travelocity or Kayak. You would log into the portal and plug in your origin and destination, and they would spit back the cost of travel and convert it to points. It then matches up the points on your account and tells you what your remaining cost would be if any. If you have the Chase Sapphire Preferred® or the Ink Business Preferred® Credit Card, you get a 1.25¢ per point redemption rate.
If you are ready to unlock a world of free travel, start with the Chase Sapphire Preferred® Credit Card. Welcome bonus is worth $750 of travel, more if you transfer them to partners like Southwest Airlines or Hyatt hotels. Details: $95 annual fee | $4k min spend in 3 months to earn 80k Chase UR Points.
There is one way to get an even better redemption with the Ultimate Rewards portal, and that is to get the Chase Sapphire Reserve®. One of the perks is that it allows you to get 1.5¢ per point in the Ultimate Rewards portal. That means that 50,000 points would be worth $750 in free travel when redeemed through the portal. In comparison, the other two cards, the Ink Business Preferred® Credit Card and the Chase Sapphire Preferred® would only be worth $625 in free travel in the portal.
So that’s just something to remember.
The third and best option, in my opinion, is to transfer them to the travel partners (this is where it gets very cool and what we typically recommend). You can transfer Chase Ultimate Rewards® to some of our favorites including Southwest, Hyatt, United and British Airways. All transfer ratios are 1:1, and you must transfer in 1,000 point increments. The other cool thing is this these points transfer, in most cases, instantly. It literally takes 15 to 20 seconds to transfer points from your Chase account to these transfer partners. You’ll send over some points, you will hit refresh, and then the points will be sitting there. The caution is that you should only transfer points at the exact moment that you are ready for them.
Once you transfer the points, they can not get back to Chase. All of the flexibility and all the value is having them in sitting in Chase where you can send them to the other partners when you are ready for them. Never transfer them early.
In many cases, you are going to get better than 2¢ per point in-value. The 2¢ per point is just a general benchmark to use back of the envelope. If I’m getting 2¢ per point or better that’s a pretty good redemption, I should probably use them. You can see why option three far outweighs the cash back at 1¢ per point or even the 1.5¢ per point that you would get in the Ultimate Rewards Portal.
Just remember that 2¢ per point. You want to get $1,000 in value from 50,000 points.
So how do I use Ultimate Rewards to go places?
One of the transfer partners of Chase is United. United is a member of the Star Alliance. This means they are a transfer partner to both South African Airways and Ethiopian Air. To start, I go to United.com and search for flights From IAD (Dulles) to HRE (Harare), and I choose a date making sure to select saver award economy seats, and my dates are flexible. It took me 20 seconds to find out that I could get a flight one way for 40,000 United miles or 80,000 United miles roundtrip any day in October or November.
$3000/80,000 points =3.75¢ per point. As you can see this redemption far exceeds the 2¢ per point that we used as a benchmark
I picked a date at random but found that it would cost me 40,000 points one way + $5.66 in fees to go from DC to Harare, Zimbabwe. To come home, it would cost me 40,000 points + an additional $60 in fees.
In summary, I have enough points for 4 round trip tickets to Africa and my cost for two people would be the $150 to $200 in fees. So I earned enough points for us to go on two separate occasions. These are real dollars. My old plan would require that I save $6,000 and to save $6,000 I would need to earn closer to $9,000 before taxes.
Yeah, it’s unbelievable.
Just from opening a couple of cards using the Chase Gauntlet I have put together 4 round trip tickets essentially around the world which would cost me the equivalent of $12,000 in post-tax dollars. Travel hacking is not designed to make trips to the Zimbabwe I’m probably the only person that needs to go to Zimbabwe. But the places you can go are amazing. It gives you a level of freedom and flexibility. Now you don’t have to make a choice between your family and your financial future. Instead, you are treating travel like a game or a puzzle, and you are going to get to do this for free.
If I can get to Zimbabwe with three minutes worth of work, You can get anywhere. You can get to Florida; you can go to Disneyworld, you can go to California, Hawaii or Europe. You can go to Asia
I have real up-to-date knowledge since Costa Rica is a trip that we’re planning on taking. Costa Rica is very easy to fly to via Southwest Airlines. Southwest, in my opinion, is the easiest of all the frequent flyer reward programs to use because they don’t have limitations on their award seats. They don’t have blackout dates, all of their rewards points are a function of the cash price of the ticket.
Blackout dates usually aren’t a problem if you have flexibility but when you see blackout dates, what it usually means is that there are a finite number, of awards seats on every single flight and people book them. It’s not the Airlines job to guarantee that every single person can get a frequent flyer seat. They might allocate 2, 5, or 10 seats and individuals book them. So that’s where flexibility comes in. But since Southwest points are a function of the cash price, families are going to have the easiest time with Southwest. You can use the miles, and the flights are inexpensive, so they’re not going to cost a ton of miles.
This is why we spent so much time raving about the Companion Pass. Southwest is a nice easy way to get to San Jose, Costa Rica. There is a Hyatt in Costa Rica; I believe that it’s the Andaz Hyatt which is one of the Hyatt’s sheik brands and we use our Ultimate Rewards points to transfer to Hyatt for this luxury redemption. At 15,000 points per night. If you wanted to stay five nights, it would cost 75,000 Ultimate Rewards rewards points. The Dave Ramsey plan would require us to save $4000 post tax to go on this Costa Rica trip but since both Hyatt and Southwest are transfer partners we can use the Chase Gauntlet to transfer our points on an as needed basis and get the trip for free.
I like this our plan better.
Hawaii is a huge sweet spot destination. We think of Sweet spots as opportunities to game the system using a partner’s miles to book a flight. Usually, this opportunity will far exceed the 2¢ per point. There are several sweet spots to get to Hawaii using partner miles, and you get all of them from Chase Ultimate Rewards®.
You can see we’re not in the bag for Chase, but these are the best points, they simply are.
You can use British Airways miles to fly American Airlines and Alaska Airlines. And it only cost 25,000 points to fly roundtrip from the west coast. The west coast is important here because to get the sweet spot redemption of 25,000 points you have to use one of the 10 to 12 airports on the west coast. Compare that to the standard award chart for American, United, and Delta where 45,000 points are the baseline, and you begin to realize the possibilities.
British Airways has another Transfer Partner Korean Air. Korean Air Miles is a sky team partner of Delta, and there are lots of Delta flights. If you can find a Delta Level One Saver flight, you can use Korean Air Miles to fly to Hawaii why it only cost 25,000 points, and it doesn’t matter what part of the country you are. Korean has added functionality where you can search for it on their making this redemption even easier. So 25,000 points round trip to fly anywhere in the US and it’s only 45,000 to fly first class. Delta normally cost 80,000 points to travel first class, but it would only be 45,000 points to travel first class on Delta when you transfer through Korean.
You can also use Singapore Airlines to fly United flights for 35,000 points round trip because they are a Star Alliance partner. United availability is plentiful, so while traveling to Hawaii in the summer can be difficult, if you have some flexibility on dates it is very simple to go. This is a huge dollar saving
You can also use some of the same tactics to go to Europe from the East Coast. Similar to the distance from the West Coast it’s almost identical to use British Airways from the East Coast. You can use their partner Aer Lingus and Air Berlin, to a lesser degree, to go to Europe.
The baseline to travel to Europe is typically 60,000 miles round-trip. So to qualify as a sweet spot redemption, we want to do significantly better than that. To fly anywhere in the US to Europe you can now get these round-trip flights on Aer Lingus from six or seven different airports for only 26,000 points during their off-peak time. But their “off peak” time is almost two-thirds of the year. At 26,000 miles it’s less than half of the 60,000 point baseline. Your essentially getting a 50% plus discount
So this may seem complicated. I mentioned a bunch of airlines and partners but they all have one thing in common: They are transfer partners of Chase. All of these other doors open for you when you start with the “Chase Gauntlet.” And by the time you’re finished, you have this arsenal of Ultimate Rewards points. You Could have 700,000 miles by the time you finish the gauntlet and those transfer one to one to all of the partners that we just mentioned. Costa Rica, Hawaii, Asia, Europe, Alaska, the 50 continental states, Disney World, Zimbabwe. Your options are only limited by your imagination.
So in this three part article series, Brad and I have illustrated what Travel Rewards are. How to Earn them and How to Redeem them. Now you just have to decide if you want to get started. And if you want to get started with us you are in the right place. follow this link to our Travel Rewards page and then click our cards page link to start on the next card in your sequence
Re-read these articles several times and listen to Episode 9 of our podcast which lays out exactly how all of this works. Share your success stories with us. We want to know if the information we are giving you is helpful.
This is real, it’s very easy, and you should get started, this is the lowest hanging fruit in the personal finance world. This is personal finance; this is the untold story. This is a $5 to $10,000 post-tax raise just by being a little bit smarter than the next guy.