CardWise Compass
A clearer path to free travel.
Hi friend!
Happy Friday and welcome to the third edition of the CardWise Compass!
Last issue, we talked about why transferable points are more valuable than airline-specific miles. This week, I want to tackle something I often see: people sitting on valuable points and then redeeming them for a fraction of what they're actually worth.
This one hits close to home because it's a pretty easy mistake to make (and I've done it too!). The "simple" redemption option is right there in your bank app. But simple and optimal are not the same thing.
Estimated read time: 3 minutes
Today's Issue at a Glance:
Signal: The Capital One Venture is still at an all-time-high offer of 75K points plus $250 in travel credit
Strategy: How you redeem your points matters just as much as how you earn them
Scenario: The same 75K points can be worth $750 or $1,500, depending on your use
Step: Do a quick self-assessment to see your current point redemption value and how you can increase that
Signal
I wanted to call out an all-time-high offer going away very soon on the Capital One Venture card - 75,000 miles (points) with a $250 travel credit. If the $250 travel credit is no longer available, I would look at the Chase Sapphire Preferred card instead (also offering 75K points), as it is the best "starter" travel card, in my opinion.
These 75,000 points can be used in very different ways, and the value gap is significant (more on that below).
Some links I share are referral links, which are a free way to support my work. But I'll always prioritize your best interest.
Strategy
If you remember one idea from this week's newsletter, let it be this:
The way you redeem your points can double (or cut in half) their value.
Most credit card apps make it easy to redeem points for statement credits, Amazon purchases, or gift cards. The value is often around 0.5 to 1 cent per point.
When you transfer those same points to an airline partner instead, the value often can jump up to 1.5 to 2+ cents per point.
The takeaway: the "easy" button in your credit card app is almost never the "best-value" button.
Here's a quick framework to evaluate any redemption:
Below 1 cent per point: You're leaving significant value on the table (ex: gift cards, merch, AmEx statement credits)
1 to 1.5 cents per point: Decent, but you can likely do better (ex: Chase statement credits or travel portal bookings)
1.5 to 2+ cents per point: The sweet spot (ex: airline and hotel transfers, especially premium cabins)
Scenario
Let's say you earn 75,000 points on a Capital One Venture or Chase Sapphire Preferred sign-up bonus.
Option 1: Statement credit, Amazon purchase, or gift card 75,000 points x ~1 cent per point = $750
That's fine. It's $750 you didn't have before. But consider the alternative.
Option 2: Transfer to a travel partner Transfer those 75,000 points to Hyatt (1:1 ratio) and book 3 to 4 nights at a hotel that would normally cost $300 to $400/night = $900 to $1,200 in value.
Or, transfer to United or Air France/KLM (Flying Blue) and book a business class ticket to Europe that would retail for $3,000+ for 2 to 4+ cents per point.
To be clear: statement credits aren't always wrong. If you need the cash flexibility, that's a valid choice. But it's important to know what you're giving up.
Step
Before you redeem more of your points, take a quick "audit" to assess your points redemption value currently.
A helpful free tool is the Frequent Miler Reasonable Redemption Values chart, which shows the value of each type of point when used pretty well, or an average use of your points.
If you already have a card that earns transferable points, you're in a great spot. The key is just making sure you're redeeming them wisely.
One more thing: starting next issue, I'm rolling out a referral incentive for anyone who helps get friends signed up to the newsletter. So if you've been wanting to share the newsletter, now is a great time to start!
Next issue, we'll discuss costly mistake #4: using one card for all your spending (and how a little strategy here can significantly multiply your points).
If there's anything you'd like to see me talk about or include here (like screenshots, etc), please let me know!
Blessings and I hope to hear from you soon!
Ross
CardWiseTravel.com