This post is long overdue and was prompted by upcoming changes to the sign-up bonus on Chase Sapphire Reserve (online applications only). Once upon a time, I did a write-up where I compared the two programs. I’ve mentioned that for most families, getting Amex Everyday Preferred and focusing on MR points is the way to go. Of course, a lot can change in this hobby in the span of one year.
Additionally, many normal folks who come across this blog will only consider signing up for a credit card if they plan on holding on to it for years to come. There is nothing wrong with that, and I’ve mentioned before that you should do what you are comfortable with. If the above statement describes your feelings on the matter, this post is for you.
Do the math and decide if collecting flexible points is the right strategy for your situation
While I’m a big fan of flexible points, I recognize that collecting them via everyday spending is not for everyone. If you are someone who goes berserk at the thought of trying to keep up with various bonus categories (hello, husband!), or don’t like the idea of studying award chart etc, you may be better off with plain old cash back. There are several choices and I recommend you see my list of best options for a middle-class family.
When it comes to simplicity, it’s hard to beat Citi Double Cash. If you are willing to do a bit more work, investigate Sam’s Club MasterCard and US Bank Cash Plus Visa. There are many other choices, and there is no “one size fits all” when it comes to maximizing points or cash back on everyday spending.
Who should consider flexible points? Well, those who like flexibility! With this type of rewards you are not locked in just one type of currency. Usually, you have a choice of statement credit, gift cards, hotel points or airline miles. There is also an option of redeeming points on revenue flights and getting better value compared to cash back.
This option is a decent choice for those who are a bit more organized and who go on several trips per year. It’s also good for those who have relatives in other states or countries. With that, for most families, I would recommend to focus everyday spending on either Membership Rewards or Ultimate Rewards, possibly both (for those who are ultra-organized). But how do you choose between them? Let’s dig in. Once again, see this post for reference. I will highlight the changes in red.
Membership Rewards program
Best credit card combination: each spouse gets Amex EveryDay Preferred (no change from my previous advice).
Read my post on Amex Everyday Preferred The idea is to buy Visa gift cards at a grocery store with the second Amex in order to collect 4.5 MR points per dollar on up to $6,000 per year.
Total annual fees paid: $190
1) Points transfer instantly to most programs, including Avios, Air Canada, Delta and Jet Blue. Those will likely be your main uses of MR points. I wrote about some other good options for family here
2) There are transfer bonuses on a regular basis, which let you extract more value out of your stash.
3) There are quite a few partners, and all three airline alliances are well represented. You can transfer to Singapore program and redeem for flights to Hawaii on United metal (at a cost of 35K miles roundtrip) Programs like Air France and Iberia open up many possibilities if you want to fly to Europe.
4) Amex EveryDay Preferred earns Membership Rewards points and happens to be one of my top long-term picks for family. Amex card gives you an access to special savings program. So, with some effort, it should be possible to offset your annual fee.
5) You don’t have to have a credit card with an annual fee in order to preserve your points. You can get Amex Everyday (or downgrade it from Amex Everyday Preferred).
6) Improved availability on Delta, with some awards starting at only 5,000 miles one-way. This is terrific news for Delta-hub captive readers.
7) Addition of Plenti as a transfer partner (read about it here). They even had a 50% transfer bonus last year and I anticipate it will come back at some point.
1) Cut in transfer ratio to Avios. Instead of getting 1,000 Avios in exchange for 1,000 MR points, it’s now 800 Avios per every 1,000. This is a big blow, but hopefully, they will have some sort of transfer bonus to make up for it.
2) Somewhat weak revenue program option compared to Southwest. MR partners with Jet Blue, but transfer ratio isn’t all that great and value per point is less (domestically) compared to what you would get with Rapid Rewards. While Jet Blue may be preferable to those who live near one of their hubs, in general, Southwest shines by comparison when it comes to family travel.
3) Delta is the only domestic program out of the big three (Delta, American, United) that is represented. While there is a way to redeem MR points on United and American, you will not have access to standard level awards in those programs. That could be problematic if you need to fly last-minute.
4) One point is worth only 1 cent toward flights.
5) Many international routes come with fuel surcharges which can make your search complicated. While there are ways to get great value out of MR points without paying exorbitant fees, it will take time and effort. By comparison, if you have United miles transferred from UR program, you can just look for seats and book them online. There are no fuel surcharges, ever. Easy peasy!
6) Very weak hotel partner list. Sure, there is Choice. But you can purchase Choice points for 1.1 cents each, so you will most likely want to preserve your MR stash. It’s an option, of course, but not near as lucrative as Hyatt.
7) Terrible “saver” level availability on American Airlines, which makes it hard to utilize Avios program within United States.
8) Lately, Amex has been taking the term “Big Brother” to the next level. There are many reports of them freezing Membership Rewards accounts if they detect suspicious activity. One of my readers emailed me and said that he doesn’t do any manufactured spending, yet they still froze his account for review and he wasn’t able to transfer points to miles for a couple of months.
They also claw back bonuses for various reasons. This is by far the biggest negative development and something you should take into consideration if you plan on accruing MR points via everyday spending.
Ultimate Rewards program
Best credit card combination: Chase Sapphire Reserve+Chase Freedom+ Chase Freedom Unlimited (used to be Chase Ink Plus+Chase Freedom)
Chase Ink Plus is no longer available for new sign-ups, otherwise, it’s definitely a workhorse when it comes to maximizing your UR-earning potential. You may want to read my post on Chase Freedom Unlimited and Chase Sapphire Reserve
How to maximize your earnings: Use Chase Sapphire Reserve for travel and dining purchases (3 points per dollar), Chase Freedom for rotating 5% categories and Chase Freedom Unlimited (1.5 points per dollar) for everything else.
Total annual fees paid: $450 (but you would receive $300 annual credit toward travel purchases).
1) Points transfer instantly to Southwest, which is probably the best program for most middle-class families in America. It’s revenue-based, which means every seat is available on points. If you book far ahead, you can usually get 1.6 cents per point. Flights are fully refundable and bags fly free. And let’s not forget Companion Pass.
2) Points transfer instantly to Avios on 1:1 basis. Avios has a distance-based program where some flights cost only 4,500 points one-way. Note that this pricing is no longer valid for flights that originate or end in USA. The program also lets you pull miles into a family account, which helps to efficiently use up your stash.
3) Points transfer to Hyatt program on 1:1 basis. I wrote a post on some Category 1 redemptions (cost only 5,000 Hyatt points). There are also some very nice resorts that cost 15,000 points per night. Those can be a great deal during peak season and holidays.
4) You can combine points with those earned from Chase Freedom. That card doesn’t have an annual fee and offers 5 points per dollar in rotating categories throughout the year. This lets use supercharge your earning potential. Staples.com is now selling $300 Visa gift cards, but you will only benefit from it if you have Chase Ink Plus that earns 5 points on office supply purchases.
3) You can redeem UR points toward cash back on 1:1 basis.
6) You can get 1.5 cents per UR point when you redeem for travel as long as you have Chase Sapphire Reserve. This is yuuuge!
7) UR points now transfer to Air France, which lets you book Delta flights online. Unlike Korean and Virgin Atlantic, you can redeem miles for one-way tickets. See this post on Travelisfree for all the other cool stuff you can do with Flying Blue program.
8) You can now use Korean Sky Pass program (UR partner) to book Sky Team awards online. Why should you care? Because you can fly on Delta to Hawaii roundtrip for only 25,000 Sky Pass miles. I presume that you will still have to fill out a gazillion forms if you want to book tickets for your relatives (read about one reader’s experience).
1) No transfer bonuses, ever.
2) No special savings offers in your credit card profile, ever.
3) A relatively short list of partners, which is now even more pronounced after the loss of Amtrak.
4) Somewhat weak program for Delta lovers (yes, they do exist). While you can use Air France, the prices start at 12,500 miles one-way within Continental US. You will not have access to routes that run at only 5,000 miles via Delta’s own program.
5) An annual fee of $450 on Chase Sapphire Reserve, which allows you to transfer points to airline and hotel programs. This is very high no matter how much you try to sugarcoat it. Yes, you will get $300 credit, plus all the other goodies, but that kind of initial cash outlay will sting for most middle-class families.
So, what program should you focus on?
My old advice favored collecting Membership Rewards. Why? Because I’m cheap. I liked the idea of erasing the annual fees on Amex Everyday Preferred cards via “Offers for you” program. And I still do. But I have to reluctantly admit that all the recent changes in UR program make a strong case for focusing on that program instead.
While the initial sign-up bonus of 100K points on Chase Sapphire Reserve is VERY compelling (after tomorrow it will go down to 50K points for online applications), I think it’s a great card to hang on to as well. Full disclosure: I personally won’t be renewing it because most of my everyday spending goes toward sign-up bonuses. I simply can’t justify this high of an annual fee, no matter how many perks come with it. But this post is not meant for people like me. If you are not sure, my advice is to apply for CSR in order to lock in the 100K points’ bonus. You will have a year to decide on whether it’s a keeper or not.
Obviously, you could focus on both programs, but I honestly think Ultimate Rewards will be a better fit for majority of middle-class families who fly at least a few times per year. If you regularly have to buy trip insurance and value airline lounge access, CSR card is very useful indeed. Yes, you will have to do some work and switch Chase cards as needed in order to maximize your rewards. But the points will surely add up if you do.
To me, there are three main reasons this program is more compelling compared to Membership Rewards:
1) You can redeem UR points toward statement credit on 1:1 basis. No such thing with MR program, unfortunately. Sure, you can get certain gift cards at 1:1 ratio, but it’s not exactly the same thing as cold hard cash.
2) You can redeem UR points toward travel and get 1.5 cents in value if you have Chase Sapphire Reserve. You will only get 1 cent per MR point toward flights if you have Amex Everyday Preferred.
3) I don’t like how Amex is handling its MR program as of late. Audits for no reason and freezing accounts out-of-the blue don’t instill confidence, do they? When you choose to accumulate flexible points, you put faith in the fact that they will be available when you need them. Otherwise, what’s the point, right?
There are currently two main reasons I can think of that would prompt me to recommend Membership Rewards program over Ultimate Rewards: Delta and Jet Blue. If someone regularly flies short, expensive Delta routes that go for 5,000 miles one-way, I would say, Membership Rewards points may be the way to go. Jet Blue has some fantastic deals as well, where you can get 2 cents per point on flights. Also, see this post for other decent uses of MR points.
But all in all, I have to admit that UR program is king…again.
Readers, what are your thoughts? Yay or nay?
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Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.