Freaks and geeks rule!

No, its not  a rant. Yes, its miles and points related. You may have heard all the talk about Southwest Rapid Rewards program devaluation, coming after March 31st  2014. Basically, one point will be good for 1.4 cents in travel instead of 1.67 cents currently.

Even before this change, when you heard “most valuable mile” in this hobby, people usually  talked about Mileage Plus. And I think that’s fair. For their travel style it makes sense. If you want premium product, this mile is for you. And you, and you, and you !

United allows one way redemptions and belongs to Star Alliance, the equivalent of a football team in high school. Everyone wants to hang out with them. BTW , Skyteam would represent the ” misfits and rejects “.

In fact, the most recommended transfer from Chase Ultimate Rewards is usually the  Mileage plus. But I still  would take Rapid Rewards point over Mileage Plus any day as Chase transfer option, even after devaluation. I think for a middle class family like mine with 2 kids, it makes more sense. Oh, and Rapid Rewards program  would be the equivalent of “freaks and geeks”, not to be confused with “misfits and rejects”.

There are few questions to ask, when comparing the two:

1) How easy is it to redeem? United award tickets may or may not be available for a family of 4. It’s almost impossible to find seats during Spring Break or a major holiday. On Southwest  you are guaranteed to find something available.

2) How many points are required? United starts at 10000 miles one way for some routes around continental USA . Southwest award prices are more broad, with some tickets requiring just 5000 points 1 way. So they potentially can go further.

3) How much value does 1 point get ? On United, best case scenario maybe  2 cents per mile in economy, but not guaranteed. My average redemption domestically is usually around 1.5 cents.

If you are a family, like mine, you probably don’t have a huge potential for miles and points earning. Most of it comes from bonus sign-ups. So economy is the redemption of choice majority of the time.

On Southwest currently you can get 1.9 cents per point for “Wanna get away” fare, with tax included . After March 31st it will be 1.4 cents, but probably closer to 1.6 cents, factoring in tax. This is just a guess on my part though. Either way I will take “guaranteed” over “potential” any day.

4) How many transfer possibilities? United mile transfers from Chase premium cards with Ultimate Rewards program, but there is a way to redeem from Membership rewards on United flights through one of their Star partners.

Southwest point also only transfers through Chase cards. They do partner with Aitran, but the scheme is a bit complicated and availability is not guaranteed. Plus, very soon the programs will be combined. So  Rapid Rewards redemptions by that metric  are harder to acquire=more valuable.

5) Can you transfer to cash, if needed? This is important for a family like mine, who has little in savings currently.

Not as far as I know, from United. Sure, there are brokers, who buy miles. But it’s against the rules, so I would never do that. Also, there is a way to redeem miles for hotels or car rentals.

But if you lose your job, the last thing you will want to do is go on vacation.   With Southwest Rapid Rewards points, you can convert 10000 points to a 100 dollar Amazon gift card , which is almost as good  as cash to me. Though its important to note, that this option is available to Southwest visa cardholders only. However, regular members can redeem during certain promotional periods.

You can buy paper towels and all kinds of stuff at a good price on Amazon. Things you would need in your everyday life anyway. So in this instance your stash of Rapid Rewards points will become a quasi emergency fund of sorts.

There you have it.  Freaks and geeks win. I was one of them once upon a time. What the heck, I still am! Of course, the nice thing about Ultimate Rewards program, is that you do have  a choice. But the transfers are not reversible. So be careful about choosing Mileage Plus in hopes of getting 4 award tickets during your kids’ spring break, only to find no availability. Then you  log in to your Chase account and see the Rapid Rewards transfer option and say to yourself: you could have been the one…

P. S. The sign-up bonus on Chase Southwest credit cards is increased to 50000 points till October 31st. You can find more info in my “Best credit card deals for family” page. I strongly recommend you link from there to my post on Chase Airtran card as well.

Photo credit goes to curatormagazine.com