Are Recent Improvements to Membership Rewards Program Enough to Convince You to Make the Switch?

A switch from what? Ultimate Rewards, of course! See my updated comparison of the two programs.

So, for as long as I can remember, Chase Ultimate Rewards has been an undisputed champion when it comes to flexible points rewards. I’ve certainly felt that way. When Chase Sapphire Reserve card came out, it became a game changer with its ability to redeem points towards travel at 1.5 cents apiece.

Paired up with Chase Ink business cards as well as Chase Freedom, it suddenly became possible to earn as much as 7.5% return on at least some of your spending. For economy travelers it was welcome news because it meant they were no longer tied to mileage availability. It certainly didn’t hurt that Chase Sapphire Reserve was also designed with efficiency  and simplicity in mind. It’s clear that Chase has the top talent in that department. Amex was left in the dust and scrambling to come up with a worthy competitor.

I still don’t feel they’ve accomplished that, but three things happened. Number one: Chase Sapphire Reserve recently lost some of its luster. You can no longer bring unlimited number of guests to Priority Pass lounges, but rather just  two individuals. This is a big deal for families of four or more.

Sure, you can add your spouse as an authorized user, but that’s an extra $50 (correction: thanks to reader Audrey for reminding me that it’s actually $75). And Chase Sapphire Reserve already has a hefty $450 annual fee. There is $300 travel credit that’s almost as good as cash, but still.

UR program has also recently lost Korean Air Sky Pass as its transfer partner. This is probably not a significant development for most normal families, but it does sting. You can no longer fly to Hawaii roundtrip for 25k UR points in coach, 45k in first-class from anywhere in the country.

Last but not least: Ultimate Rewards travel portal has gotten worse recently, presumably due to its switch to Expedia. As I’ve mentioned on our Facebook page, you can no longer use UR points on paid Spirit, Allegiant or Southwest flights. With Southwest, as long as you have a premium Chase card, you can still transfer points, not so with the other two. We flew Spirit last year, and I can tell you that rumors of its nastiness have been greatly exaggerated. It’s a low-cost carrier, no doubt, but as long as you do your homework, it’s no worse (and in many cases better) than the other guys.

Ok, not many regular families in this hobby care about Spirit and Allegiant, which is fair enough. But you know what they do care about? Disney. Unfortunately, according to this post on Thepointsguy, you can no longer book Disney resorts or park tickets when using your UR points.

The change was made a few months ago, and doesn’t appear to be a fluke. It’s not something that would impact my family because I’m too cheap to splurge on Disney resorts and we usually buy “Florida residents” discounted tickets at the park. But I know for many this was one of the appealing factors about collecting UR points, and now it’s gone.

Don’t get me wrong, UR portal is still extremely useful. You can book vacation rentals and tours, and get 1.5 cents per point if you have CSR card. We got an amazing apartment in Barcelona, courtesy of Chase portal. Still, the loss of ability to book certain airline carriers, plus abandonment by Disney are all bad news.

The only positive development that comes to mind is  the addition of Jet Blue program (1:1 transfer ratio). Amex still has 250:200 ratio on Jet Blue. Come on, Amex, even Citi now has 1:1 ratio! And you are definitely better than Citi.

What Amex has been doing in the meantime

A few years ago American Express launched Amex Everyday Preferred card. It was and still is an extremely attractive option for middle-class families. In fact, I think it’s probably the most underrated credit card product on the market. See this post for more details. There are few hoops to jump through, like making 30 transactions per month. Still, the relatively low fee ($95), and bonus grocery/gas categories make it very compelling.

Then last year Amex has launched Blue Business Plus credit card that earns 2 MR points on every dollar, on up to $50k each year. The game changer: it has no annual fee. It is a business card, so not everybody will qualify. Still, earning 2 transferrable points per dollar on everything is as good as it gets, especially if you normally transfer to mileage programs. When there is a transfer bonus, like the one going on with Avios right now, it means getting 2.8 Avios per dollar. Not bad.

Last month, Amex has relaunched the Gold card and added some significant benefits. The main one: ability to earn 4 MR points per dollar on groceries, on up to $25k per year. With Everyday Preferred card you can potentially earn 4.5 points, but only on $6k per year. Gold Card  also now offers 4 points on dining, which is another useful category.

So, for those who have the ability to buy Visa/Mastercard or any other gift cards in grocery stores, this is big news. If you have both Everyday Preferred and Gold card, you can get over 4 MR points per dollar on $31k each year. Of course, you need to first make sure that you can justify the $250 annual fee on Gold card. Those who live in metro areas can probably do it without much difficulty. See my related post for more details.

Chase still has Freedom card, of course, but very often bonus categories aren’t all that useful. You won’t be getting 5 points on groceries and dining all year long, that’s for sure.

The last thing I wanted to mention is the recent addition of Avianca partner to Membership Rewards. While it’s definitely a “mixed bag” kind of program, it certainly has its uses. As long as you can book United flights online (some cost only 7,500 miles+$30 in fees)  and don’t need to change them, you’ll be fine.

It’s hard to say what will become of this program in a few years, but it has plugged one very significant hole in Membership Rewards. Namely: fuel surcharges on many Star Alliance partners. This is where United (Chase UR partner) used to hold a significant advantage  over MR program. Not anymore.

But what about Southwest and Hyatt?! 

Those two programs are the main reason many collect UR points in the fist place. I can’t help you with Southwest. Just pay cash for your tickets and think about how many MR points you are getting from grocery store purchases? Look, Southwest is great, but it’s not the only game in town. Chances are, if Southwest flies a certain route, so do the other guys. Not always, but usually.

As far as Hyatt goes, you can consider getting Hyatt co-branded credit card (X2 if you have a partner). The annual fee is $95. It earns 2 Hyatt points on restaurants, airline tickets and gyms, so just use it for those purchases. A bonus: this card offers travel insurance coverage. You also receive 1 free night every year after your cardmember anniversary at any Category 1-4 Hyatt hotel or resort. You can also earn an extra free night at any Category 1-4 Hyatt hotel or resort if you spend $15,000 during your cardmember anniversary year.

Let’s say you use the card towards non-bonus spending each year and put exactly $15,000 on it. You will get 15,000 Hyatt points+free night good at Category 1-4 Hyatt hotel. If you used a 2% card like Citi Double Cash, you would get $300. Many Hyatt resorts cost way more than $150 per night during high season. Here is just one example in Florida

Of course, if you used Blue Business Plus, you would get 30k MR points which to me are worth more than $300. But either way, there is an opportunity cost whether you choose to collect cash, UR, MR or Hyatt points. Those UR points transferred to Hyatt are certainly not free because you could have used them on other travel purchases instead.

Speaking of, occasionally Hyatt sells points for around 1.7 cents apiece. While it’s not a great price to pay when collecting them speculatively, it’s not that far off from 1.5 cents you get per UR point with Chase Sapphire Reserve.

Bottom line

I can’t tell you which flexible points you should collect or even if you want to collect them in the first place. My point is: things in this hobby change constantly. Individual needs change as well. What worked for you in the past may no longer be optimal solution right now. Maybe it’s time to dump UR points and switch to MR points instead.

Click here to view various credit cards and available sign-up bonuses