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Flexible Points Credit Cards vs. Co-Branded Credit Cards—Don't Make This Mistake!

Updated: May 6

Would you rather have a $100 Vanilla Visa® Gift Card or a $100 gift card at your go-to grocery store? I'm sure you would agree that the $100 Vanilla Visa® Gift Card is a better selection. Why? Not only can you use it at your go-to grocery store, but you can use it at many other stores.

On a similar note, credit cards that earn flexible points are oftentimes more valuable than credit cards that earn fixed miles or points. Let's now take a deep dive into this topic so that you don't make the same mistake that many do. In this post, we will focus on Flexible Points Currencies and co-branded credit cards that relate to Award Travel.

Being flexible not only benefits us physically but it is very powerful as it relates to Award Travel
Being flexible not only benefits us physically but it is very powerful as it relates to Award Travel. Image courtesy of Wix

All opinions and reviews expressed herein are the author's alone and have not been reviewed or approved by any credit card issuer, airline, bank, hotel chain, or other entity. Some of the credit card offers and links appearing in this article are from companies from which we may receive commission or a referral bonus when you click on the link. You do not need to use our links but we appreciate it when you do—it helps support our website!

What Are Flexible Points Credit Cards?

A Flexible Points Credit Card is a credit card that earns points in a centralized account. You accumulate your points in that account based on using that credit card—or another credit card in the same "family" that also earns the same points "currency." You can subsequently redeem your points in multiple ways including: Transferring your points to a transferable partner; using the issuer's Travel Portal; receiving a statement credit or cashback; purchasing a gift card, etc.

When it comes to Award Travel, there are four big players in the field that offer Flexible Points Currencies: Chase, American Express, Citi, and Capital One. Chase has Ultimate Rewards® Points, American Express has Membership Rewards® Points, Citi has ThankYou® Points, and Capital One has Venture & Spark Miles that can be combined into one account.

Generally, the best value to be had from Flexible Points Currencies is to strategically utilize transferable partners. Each Flexible Points Program has a fixed transfer rate when transferring points to one of its partners. Generally speaking, a 1:1 transfer ratio is what yields the most value. On top of this, some Flexible Points Programs will periodically offer transfer bonuses on top of the regular transfer ratio. American Express typically offers some of the best transfer bonuses.

What Are Co-Branded Credit Cards?

A co-branded credit card is the result of a partnership between a merchant, network, and issuer. For example, one of my favorite co-branded credit cards is the United Quest℠ Card. The merchant is United, the network is Visa, and the issuer is Chase. I recently used this card for an amazing Award Travel redemption. You can learn more about this card in the following post: United Quest Card—The Best Airline Credit Card! You can apply for this card here!

With a co-branded credit card, you generally earn miles or points that can only be redeemed with the merchant. In the aforementioned example, you earn miles as part of United's MileagePlus® program. The miles you earn can only be redeemed with United; they can not be transferred to a different loyalty program.

Flexible Points Credit Cards vs. Co-Branded Credit Cards—Who Wins?

Flexible Points Credit Cards win by a landslide! Why? You can leverage your points for a better redemption. You can learn more about this in the following post: An Easy Example of How to Leverage Your Miles & Points for an Award Ticket.

Loyalty programs are constantly devaluing their respective programs. This is a sad reality for Award Travel enthusiasts. But, the old adage is a lifesaver: Don't put all your eggs in one basket. By taking advantage of Flexible Points Currencies, you are diversifying your points. If one program is devalued, use another program that gives you a better redemption.

"Stay ahead of loyalty program devaluations by using Flexible Points Credit Cards."

In addition, with Flexible Points Currencies, you do not need to use your points toward Award Travel. There is often a cashback or statement credit option. For example, Chase Ultimate Rewards® allows you to "cash-out" your points at a value of 1 cent per point. Although this is not great value compared to Award Travel redemptions, it does provide a built-in "savings" account in the event you face a financial reversal or have an immediate need for cashback.

Take, for example, the Chase Sapphire Preferred® Card. The current welcome bonus is 60,000 Ultimate Rewards®! You could "cash-out" all of those 60,000 points for $600. You can apply for this card here! If you would like to learn more about this credit card, please see the following post: Chase Sapphire Preferred—The Best Credit Card Just Got Better!

An Example of Leveraging Your Ultimate Rewards® Points for an Award Ticket

My favorite Flexible Points Currency is Chase Ultimate Rewards®! They have 11 airline and 3 hotel programs.

Here are the 11 airlines:

  • Aerclub Aer Lingus

  • Air Canada Aeroplan

  • British Airways Executive Club

  • Emirates Skywards®

  • Flying Blue AIR FRANCE KLM

  • Iberia Plus

  • JetBlue TrueBlue

  • Singapore Airlines KrisFlyer

  • Southwest Airlines Rapid Rewards®

  • United MileagePlus®

  • Virgin Atlantic Flying Club

Here are the 3 hotels:

  • IHG® Rewards Club

  • Marriott Bonvoy®

  • World of Hyatt®

Now, let's look at a simple example of how you can save your points by leveraging your Ultimate Rewards® Points vs. having points/ miles in a fixed program. In other words, we will see how we can get more value from using a Flexible Points Currency vs. miles earned from a co-branded credit card. The fixed program we will use in this example is United MileagePlus®. United is also a transfer partner of Chase.

The date of departure is February 17, 2022, from San Francisco (SFO) and the destination is Singapore (SIN). United will charge 48,000 MileagePlus® miles + $19.40 in fees to fly from SFO to SIN via Tokyo, Japan (NRT) in Economy class.

SFO to SIN one-way for 48,000 United MileagePlus® miles.  Screenshot courtesy of United
SFO to SIN one-way for 48,000 United MileagePlus® miles. Screenshot courtesy of United

However, Singapore Airlines flies a non-stop route between SFO and SIN. Singapore Airlines' KrisFlyer loyalty program is also a transfer partner of Chase. Let's now see how many miles will be required to redeem an Award Ticket on the same date, origin, and destination:

SFO to SIN one-way for 38,000 KrisFlyer miles
SFO to SIN one-way for 38,000 KrisFlyer miles. Screenshot courtesy of Singapore Airlines

We find a better flight for 10,000 fewer miles! It is non-stop and doesn't require a connection in a different country—something you may want to avoid when traveling during the COVID-19 pandemic. In addition, the fees are only $5.60!

Because this is a Saver Award, let's check another Star Alliance member—Air Canada—to see how many miles this same flight would cost for its members (Aeroplan):

SFO to SIN one-way for 60,000 Aeroplan points
SFO to SIN one-way for 60,000 Aeroplan points. Screenshot courtesy of Air Canada

Aeroplan charges its members 60,000 points + $46.10 in fees—22,000 more points than KrisFlyer charges its members!

Clearly, the best redemption out of the 3 aforementioned examples is Singapore Airlines KrisFlyer's loyalty program. It requires the fewest number of miles and the least amount in fees.

Strangely enough, even though United Airlines is also a Star Alliance member, the KrisFlyer's Saver Award in this example did not show up on United's award booking engine. United has a reputation for being the go-to award booking engine when searching for Star Alliance partner availability. I'm not sure if this was a glitch but it demonstrates the problems that can arise when trying to find Saver Award space.

Your next step would be to log in to your Chase account and transfer 38,000 Ultimate Rewards® Points to your Singapore Airlines KrisFlyer account. You have just successfully leveraged your hard-earned Ultimate Rewards®!

If you only had United MileagePlus® miles, you would be stuck with redeeming through United for more miles and a worse route!

Flexible Points Credit Cards You Want to Have

There are many outstanding Flexible Points Credit Cards out there! Without trying to overwhelm you, I will discuss three that have tremendous potential:

  1. Chase Sapphire Preferred® Card. In my opinion, this is the best travel credit card for beginners. It is a premium-earning Ultimate Rewards® Points card. It opens the door to Chase's 14 transfer partners and comes with other perks and benefits. You can apply for this card here!

  2. Citi Premier® Card. This is one of the most underrated travel credit cards out there. It is a premium-earning ThankYou® Points card. It opens the door to Citi's 18 transfer partners and has very generous bonus category multipliers making it easy to earn ThankYou® Points. You can apply for this card here! You can learn more about this card in the following post: Citi Premier Card—Don't Underestimate This Workhorse!

  3. Capital One Venture Rewards Credit Card. I love to use this card on my non-bonus-category spend as it earns 2X Venture miles. It opens the door to Capital One's 17 transfer partners. This is another card that flies under the radar. You can apply for this card here! You can learn more about this card in the following post: Capital One Venture Rewards Credit Card—Simple But Powerful!

Everyone has their own "custom" spending habits. Therefore, selecting the right credit card is a personal decision. Wouldn't it be great if there was a "custom" calculator that generated a value based on your spending habits?

There is! AwardYourMiles has developed a Miles & Points Calculator. Select the credit card and enter the amount of money you spend on average per month in the corresponding category. It will calculate the following:

  1. The monetary value of your first and second years using the credit card; and

  2. The miles/ points generated from your spend.

AwardYourMiles has also developed a Credit Card Selector Calculator. It uses our proprietary algorithm which determines the best credit card in our database based on your spending habits. You will be able to determine the value of each credit card in your first year of use! Having more miles & points will improve your ability to leverage for an Award Ticket.

The Bottom Line

Flexible Points Credit Cards are generally better than co-branded credit cards. They have more value and flexibility.

But, don't get the idea that co-branded credit cards should be shunned. Co-branded credit cards still have a place in your Award Travel portfolio of credit cards. They can be used to complement the loyalty programs that provide you the most value.

In fact, some co-branded credit cards work great as "sock-drawer" credit cards. What is a "sock-drawer" credit card? Put simply, a credit card that you rarely use but is more valuable to keep than to close. Of course, you will want to use the credit card initially—at least until you receive the welcome bonus. After that, you may decide to use other credit cards for your everyday spend—whether to meet the spend requirement for another welcome bonus, use a credit card that earns higher multipliers in various spending categories, etc.

Credit Card Miles & Points Consultant

Do you feel overwhelmed with all the options available when it comes to redeeming your miles & points? Would you like some assistance to get you started in the right direction? You will benefit from the services of a Credit Card Miles & Points Consultant. You will be assisted with regards to earning miles & points through credit card use and leveraging those miles & points for Award Travel. Or, feel free to use any of our Award Travel Tools online. Get started today!


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