Required Reading for Frequent Flyers
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Ultimate Guide to Chase Ultimate Rewards
[Jan 2014 Issue]
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We explore in detail the four-year-old Ultimate Rewards program.


When Chase launched its Ultimate Rewards program on June 4, 2009, members could transfer their points on a 1:1 basis into only four travel loyalty programs: Continental Airlines, British Airways, Marriott and InterContinental. Since then, the program has gradually added partners and now, members can convert their Ultimate Rewards points into the currencies of British Airways, Korean Air, Southwest, United, Virgin Atlantic, Hyatt, InterContinental Hotel Group, Marriott, Ritz-Carlton and Amtrak.

Earning Points

There are three Chase credit cards that offer Ultimate Rewards points that can be transferred into airline miles and hotel points: Chase Sapphire Preferred, Chase Ink Bold and Chase Ink Plus. All of these cards have an annual fee. There are several no-fee cards that earn Ultimate Rewards points as well, but the points earned by the no-fee cards cannot be transferred into miles or points in partner programs. However, if you also own one of the cards with an annual fee, you can transfer the points earned by your fee-free card into the account of one of your higher tier cards. You can then transfer your Ultimate Rewards points for airline miles and hotel points.

In addition to being able to transfer points into airline miles and hotel points, the cards with annual fees have higher earning potential. All cards earn one point per $1 spent, but you can earn additional points in specific categories with different cards. The Chase Sapphire Preferred card offers double points on airfare, dining and other travel expenses while the Chase Ink Plus and Chase Ink Bold offer double points on gas and hotel stays on spend up to $25,000. One unique feature of the Sapphire Preferred card is the ability to earn an additional seven percent on all the points you earned during the year. For example, if you earn 50,000 points, you’ll receive an additional 3,500 points at the end of the year.

If you spend a lot at office supply stores, the Chase Ink cards offer five points per $1 spent on business expenses, including your cell phone, cable and Internet and purchases at office supply stores on the first $50,000 spent in these categories for up to a maximum of 250,000 points. The Chase Ink Classic and Chase Ink Cash card also offer five points per $1 spent on business expenses but only on the first $25,000.

The Chase Sapphire offers double points on dining (like the Sapphire Preferred) but not on airfare and other travel expenses. The lower tier cards do not waive the foreign transaction fee on international expenses, have lower sign-up bonuses (as well as lower spend thresholds to earn the bonus) and do not offer a 20 percent points discount when redeeming points for travel through Chase Ultimate Rewards.

The Chase Freedom card offers five percent back on the first $1,500 spent in categories that change every quarter. The last quarter of 2013 was Amazon.com, and select department stores so if you spent $1,500 in those categories, you would have earned a total of 7,500 Ultimate Rewards points from those purchases. If the Chase Freedom is the only card you have, these points can be cashed out for $75, but if you have the Chase Freedom plus the Sapphire Preferred, Chase Ink Bold or Chase Ink Plus, the points can also be converted into miles or points with one of the participating loyalty programs. You won’t automatically receive the five points per $1 spent, however, and must sign up each quarter to earn the quintuple points in the rotating categories.

Chase introduced triple points on dining on the first Friday of every month with the Chase Sapphire Preferred and Chase Sapphire cards in April of 2013 and the offer was scheduled to end on Dec. 31. A spokesperson for Chase said, “We are currently evaluating whether to extend First Friday through 2014.”

Ultimate Rewards Mall

All cardholders can earn bonus points through the Ultimate Rewards Mall. The point-earning mall is similar to the airlines’ mileage malls in that you have to click to the merchant’s website from the Ultimate Rewards Mall website and you must pay with your Chase credit card to earn points. You can search for merchants by name or product category and standard offers are two to four points per $1 spent. Occasionally you’ll find higher bonuses for a limited time where you can earn 10 or more points per $1 spent at select merchants. You can sort by highest earn rate to find retailers offering the most bonus points. For example, when we looked, magazines.com was offering 30 points per $1 spent, so spending $100 is the equivalent of earning 3,000 points. If you convert those points into United miles, which cost $35 per 1,000 miles if you buy them directly from the airline, you’d be able to effectively “buy” 3,000 miles for $100, which is less than what United is selling them for, not to mention you’d have an array of magazine subscriptions to keep or give away.

Redeeming Points

Ultimate Rewards members have many options for redeeming points, but most frequent travelers can get the most value from their points by redeeming their points for airline miles or hotel points. While point transfers are fixed at a 1:1 ratio, when a program makes changes to its award chart, those changes also impact the value of Ultimate Rewards points when they are converted. Ultimate Rewards partners with United MileagePlus, Hyatt Gold Passport and Southwest Rapid Rewards, and they all announced program changes last year that devalued their currency when redeeming for certain types of awards. Those decisions had an effect on members who collect Ultimate Rewards points to redeem in those programs and prompted many to ask whether Ultimate Rewards has the same value as it did before. Lucky of One Mile at a Time changed his valuation of Ultimate Rewards points. He wrote, “In March I valued Ultimate Rewards points at 1.8 cents each, last week I valued Ultimate Rewards points at 1.6 cents each, so what do I value them at now, in light of the Hyatt devaluation? I probably now value Chase Ultimate Rewards points at 1.5 cents each.”

While Lucky may be correct in his assessment that Ultimate Rewards points are worth less now than in the past, they are still valuable and can be redeemed for many travel and non-travel items.

Airline Miles

With Ultimate Rewards points, members have access to award flights on all three alliances: oneworld (British Airways), Star Alliance (United) and SkyTeam (Korean Air). Partner Southwest is the largest carrier in the U.S. in terms of domestic passengers and Virgin Atlantic Flying Club has frequent award sales to Europe.

British Airways

British Airways Avios are priced by segment so a nonstop flight between your origin and destination is going to require fewer Avios than a flight with a connection. You’ll also need to watch out for fuel surcharges. British Airways charges fuel surcharges on British Airways and many of their flight partners. If you wish to fly to Europe with Avios, you can try partners airberlin and Aer Lingus, where fuel surcharges are not added.

There are some really good deals when redeeming Avios for flights on American Airlines, but you will be hit with a hefty fuel surcharge on award flights to Europe on American. Short-haul flights within the U.S. on American Airlines can be booked for 4,500 miles in economy and 9,000 miles in business for flights less than 650 miles. Examples include New York to Montreal, Detroit to New York, San Francisco to Los Angeles and Toronto to Chicago. Flights between 650 and 1,151 miles are also relatively inexpensive at 7,500 miles one way and 15,000 miles in business. If Hawaii is on your bucket list, you can fly economy nonstop between Los Angeles and Kauai for only 25,000 Avios roundtrip, compared to American AAdvantage’s price of 35,000 miles roundtrip.

Avios can be useful when redeeming miles for flights on other oneworld flights and The Points Guy points out that they can be especially useful to avoid last-minute charges for award flights. For example, American Airlines charges a $75 fee for awards within 21 days of departure but if you use Avios for a last minute one-way trip between Chicago and Toronto, you can use 4,500 Avios and $2.50. For more tips from The Points Guy about spending Avios, visit http://www.insideflyer.com/link/?10262

United Airlines

United Airlines MileagePlus award chart changes are going into effect Feb. 1, 2014, which means you still have some time to redeem at the current rates. On roundtrip long-haul international awards, United allows open jaws and a stopover, which means you can see additional cities on a single itinerary without having to pay more miles. And United does not require fuel surcharges on any of their airline partners, so you’ll only have to pay the taxes and fees on award tickets.

When the new award chart goes into effect, awards in business and first class will be more expensive and there will be a separate, more expensive award chart for partner flights on Star Alliance carriers. If you want to spend some miles for an aspirational trip before the mileage skyrockets, Lucky at One Mile at a Time gives some Star Alliance routes where first class awards are often available. For example, Air China flies between Los Angeles or Houston and Beijing and Lucky says first class award flights are very easy to find for 70,000 miles at the Saver level. If you can wait until two weeks before your departure to book tickets, Lufthansa first class is also fairly easy to book. Lucky offers his suggestions for some his favorite MileagePlus redemptions before the changes go into effect at http://www.insideflyer.com/link/?10265

Southwest Airlines

For domestic itineraries, Southwest Rapid Rewards award flights often price out at less than 25,000 points roundtrip, which compares favorably to most of the legacy carriers. And for short flights, you can even find flights for less than 5,000 points roundtrip, such as flights between Phoenix and Denver. Availability is good since there are no capacity controls on award flights and you can cancel an award flight without any fees. But Southwest Rapid Rewards points won’t stretch as far beginning March 1, 2014, when you’ll need to redeem 70 points per $1 instead of 60 points per $1 spent on Wanna Get Away award flights. If you like to redeem for international flights, Southwest only partners with AirTran, which puts Mexico and the Caribbean within reach of Rapid Rewards members.

Korean Air

Korean Air Skypass isn’t as well known as the other transfer partners of Chase Ultimate Rewards, but Skypass offers some interesting awards that might not immediately come to mind. Gary Leff at View from the Wing explains that you can redeem Korean miles for an award flight on Alaska Airlines and include a domestic stopover. Roundtrip domestic flights are 20,000 miles in economy and 40,000 miles in first class on Alaska Airlines. And you can book a flight to Hawaii for 30,000 miles in economy and 60,000 miles in first on Alaska Airlines or Hawaiian Airlines. Leff outlines some of the rules that apply to Skypass partner awards in his blog post at http://www.insideflyer.com/link/?10315

You can also redeem Skypass miles across the SkyTeam network of carriers. When redeeming miles for SkyTeam awards, you can include one stopover or one open jaw and you must fly the most direct route between your origin and destination. The Skypass award chart has some comparatively inexpensive redemptions, such as award flights to Europe for 50,000 miles in economy, 80,000 miles in business and 100,000 miles in first class. Flights to southern South America start at 50,000 miles in economy compared to 60,000 miles with most other carriers.

Virgin Atlantic

Virgin Atlantic Flying Club charges a fuel surcharge on award tickets and a free flight can cost hundreds of dollars with Flying Club miles. Flying Club runs frequent award sales and is known to regularly discount award flights by 25 to 50 percent, which can compensate for the cost of the fuel surcharge. Another reasonable option is to redeem Flying Club miles on Virgin America flights, especially if you are flying a short-haul domestic flight. There are no fuel surcharges on Virgin America flights and awards start out at 10,000 miles for a roundtrip flight between Los Angeles and San Francisco in economy. San Francisco to Seattle is 15,000 miles roundtrip. Flying Club members can also redeem miles for flights on Delta Air Lines with no fuel surcharge. An award flight to southern South America on Delta using Flying Club miles is only 45,000 miles in economy compared to the standard 60,000 miles.

Hotel Points

Hotel transfer partners include Hyatt Gold Passport, IHG Rewards Club, Marriott Rewards and Ritz-Carlton Rewards. Hyatt Gold Passport free night awards range from 5,000 to 30,000 points, IHG Rewards Club range from 10,000 to 50,000 points, Marriott Rewards range from 7,500 to 45,000 points and Ritz-Carlton range from 30,000 to 70,000 points. Despite Hyatt’s recent category changes, their highest tier hotels are still less expensive than the highest tier hotels of other hotel programs and their lowest tier is also the least expensive of the four. Many frequent travelers say they like to convert their Ultimate Rewards points into Hyatt Gold Passport points for hotel stays at upscale Park Hyatt properties. Other good options to take advantage of are IHG Rewards Club PointBreaks 5,000-point hotel awards or Marriott PointSavers.

Other

Ultimate Rewards points are flexible and can be redeemed for merchandise, cash, experiences, gift cards and Amazon shop with points. With all of these options, you’re going to get a value of about a penny per point, the same as if you would redeem them for cash. We’ll run through the options, but in most cases, you aren’t going to get any better value than the cash back option. Ultimate Rewards can be redeemed for either a statement credit or a mailed check. For example, 20,000 points is the equivalent of $200.

Some gift cards offer a slightly better deal than a penny per point, but with most, you’ll get one cent for every point redeemed. For example, an Amazon gift card is $25 for 2,500 points and an American Eagle gift card offers a bit of a higher payout at $25 for 2,250 points. Using your points directly with Amazon is convenient, but again, you’ll only get a penny per point and 100 points is the equivalent of $1 at Amazon.com.

To calculate the value of points for merchandise awards, you’ll have to find what the same items can be purchased for with cash. An Apple iPad Air with Wi-Fi 16 GB is 52,500 points and $499 at the Apple store, so you’ll be getting slightly less than a penny per point with this option. It would be better to buy the iPad Air with your Ultimate Rewards credit card and earn points through the transaction, and then redeem for a statement credit if you want to use points for an iPad Air.

Ultimate Rewards also offers one-of-a-kind experiences, such as a gourmet food tour, private DJ lesson or horse-drawn sleigh ride. Again, each point will be worth one penny when redeeming for experience awards.

You can redeem points for flights, car rentals, hotel stays and activities through Chase Ultimate Rewards travel. Points redeemed this way have a fixed value of one penny per point so a $250 flight would require 25,000 points. You can also combine points and cash for travel and adjust the number of points you want to redeem. For example, you could redeem 10,000 points plus $150 for a $250 flight. Cardholders of Chase Sapphire Preferred, Chase Ink Plus or Chase Ink Bold receive a 20 percent point discount when redeeming for travel so a $250 flight would require only 20,000 points.

While you will never be able to get more than a penny per point (1.25 cents per point for cardholders with one of the annual fee cards) when redeeming with Ultimate Rewards travel awards, keep in mind that unlike award tickets, you will be able to earn miles or points for your travel. These awards are similar to paying cash for fares and will earn miles, including elite-qualifying miles.


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