Using Points To Pay For An Airline Ticket: Is Amex Or Chase Better?

For the major transferable points currencies there are generally two best ways to redeem points. You can transfer them to an airline or hotel partner (largely to get outsized value for aspirational redemptions), or you could redeem them as cash towards the cost of a travel purchase.

Regarding that second way to redeem points, reader John asked me the following question by email:

My suggestion is to compare the following which I have been using for some time:

1. AMEX Business PLT and AMEX Everyday Preferred Card for Airline Pay with Point using 35% bonus and assuming 1.5 on Everyday Spend for travel when award travel is not available.

versus below which I have not been doing.

2. Chase Sapphire Reserve and Freedom Unlimited On all spend at 1.5, earning $2.25 for travel spend via Chase UR.

I have read your posts lately on the Chase Strategy and this seems to be much more advantageous than the AMEX option if I am reading this correctly.

I love both of these strategies especially when award space is not available.

The Amex strategy

John outlines the method he uses to redeem points as cash towards the cost of a travel purchase. Generally speaking, Amex only lets you redeem points for one cent each towards the cost of a travel purchase, though there’s a strategy you can use to do better than that.

If you have The Business Platinum Card® from American Express and use the Pay with Points feature, then you can get up to 35% of those points back. There are a couple of restrictions to be aware of:

• You can only get back 500,000 points per year
• The only types of tickets that are eligible for this are first and business class tickets on all airlines available through American Express Travel, as well as any fare class with your selected qualifying airline (you can choose one airline for that per year)

Keep in mind that the 35% points are refunded after the fact. That means a qualifying $1,000 ticket would cost you 100,000 points, but then you’d get 35,000 points back. Your cost in the end would be 65,000 points, which is the equivalent of 1.54 cents per point.

What John does is use The Amex EveryDay® Preferred Credit Card from American Express, which offers a 50% points bonus when you have at least 30 qualifying transactions per billing cycle.

That means with this card combo you can earn 1.5x points per dollar spent in non-bonused categories, and you can in the end get 1.54 cents of value per point, for a total return of up to ~2.3 cents per dollar spent in non-bonused categories.

The information and associated card details on this page for the Amex EveryDay Preferred Credit Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.

The 35% rebate applies for all first and business class tickets bookable through Amex Travel

The Chase strategy

The strategy I often talk about is what I consider to be the best credit card duo for maximizing everyday spend. I’m talking about the Chase Sapphire Reserve® Card and Chase Freedom Unlimited®.

The Freedom Unlimited offers 1.5x points per dollar spent, and if you have the Sapphire Reserve then points can be redeemed for 1.5 cents each towards the cost of a travel purchase. That means if you have the two cards you’re looking at a return of 2.25 cents per dollar spent in non-bonused categories.

The other great thing is that thanks to the Chase Ultimate Rewards ecosystem, there are several other small business and personal cards you could use to maximize your return on spend.

Redeeming points towards the cost of a travel purchase can be a great deal for domestic travel

So, which strategy is better?

Obviously there’s no “one size fits all” strategy. On the most basic level, I think it’s important to consider the overall value proposition of the points currency to you. While I value Amex and Chase points roughly equally, different people value one points currency significantly more than another. Maybe you value Chase points more because you like that they have Hyatt and United as partners, or maybe you value Amex points more, because they have Aeroplan and Delta as partners.

Being able to redeem points as cash towards the cost of a travel purchase can be part of a larger overall strategy.

Other than that, I do think Chase has an overall advantage in terms of being able to redeem points towards the cost of a travel purchase. On the surface Amex may seem better, since I talked about getting 1.54 cents of value per point rather than 1.5 cents of value per point. However:

• With Amex you’re limited to redeeming on select airlines, while with Chase you can not only redeem for virtually any airline, but you can even redeem for hotels, car rentals, and more
• With Amex you get reimbursed 35% of the points after the fact (and it takes several weeks) with limits, while with Chase you just get the better price to start
• With the Amex EveryDay Preferred you need to make 30 transactions per billing cycle to activate the 50% bonus, while with the Chase Freedom Unlimited you get the same return no matter how many purchases you make
• With Chase you can potentially have the Chase Sapphire Reserve® Card (which offers triple points on dining and travel) and then add four no annual fee cards to maximize your points:
  • The Chase Freedom Unlimited® offers 1.5x points per dollar spent
  • The Chase Freedom Flex^SM offers 5x points in rotating quarterly categories
  • The Ink Business Unlimited® Credit Card offers 1.5x points per dollar spent
  • The Ink Business Cash® Credit Card offers 5x points on the first $25,000 of combined purchases per cardmember year on office supply stores, internet, cable TV, mobile phones, and landlines, and 2x points on the first $25,000 of combined purchases per cardmember year on restaurants and gas stations

You can create quite a portfolio of Chase cards

Now, in fairness, I do think it’s worth pointing out that Amex lets you redeem points towards a ticket purchase as part of the International Airline Program. This offers discounts on first and business class tickets, so getting a discount on a ticket while also being able to redeem points can represent a very good value.

The information and associated card details on this page for the Amex EveryDay Preferred Credit Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.

I got a big discount on a Qatar Airways ticket using the International Airline Program

Bottom line

Over the years, the major transferable points currencies have made it increasingly lucrative to redeem points as cash towards the cost of a travel purchase.

All things considered, this is an area where Chase still leads the way. If you have the Chase Sapphire Reserve® Card you can redeem points for 1.5 cents each towards the cost of a travel purchase (not just airfare, but also hotels, car rentals, and more), and being able to earn tons of Chase points with no annual fee card complements is quite easy. So I do think this is the best strategy given how few hoops you have to jump through to achieve a return that beats just about any cash back card.

What’s your preferred program for redeeming points towards a travel purchase — Amex or Chase?