the Jebba Journal: Second Edition

A deeper dive into transferrable points and why you want them

Welcome back to this weird place where I get to write about credit card reward points and have become overwhelmed by how many people want to read it! I am truly grateful you are here and if you missed the First Edition, hit the link below to catch up.

I know I promised to cover several topics in this Edition, but I wound up writing way too much on just transferable points. An in-depth review of a points starter card and a points-only trip redemption story coming soon.

Fixed Points vs. Transferable Points

Look, I ramble a lot. I know this (mostly because Kayla frequently tells me). It’s not really going to change and I apologize in advance, dear reader. Before I get into a deeper topic like this, I will try and have a link to an established source that can explain it in a much more concise way. Be warned though, they usually will try and sell you some shit, usually in the form of using their referral to open a credit card. Anyway, here is a Business Insider article if you want to read their words on transferable points, instead of mine. 

For those of you still on this page, fixed points are those which are stuck within a single loyalty program. Think of airline miles (re: points) you get every time you fly Delta, or hotel points every time you stay at a Marriott-branded hotel. They can only be used for that airline, or hotel, or crappy pizza chain (callbacks from the First Edition anyone?)

Transferable points are just what the name implies; they can be transferred from one loyalty program to another. These are almost always credit card points. Most banks now offer credit cards that earn points instead of cash back on purchases. The benefit of transferrable points (vs fixed points) is that they can be used a lot more broadly. I’d rather have points I can transfer to United Airlines AND 15 other loyalty programs instead of points I can ONLY use through United. By having this flexibility, you can get immense outsized value if you are willing to do a little research.

A Quick Version of “What Are My Points Worth?”

This is a topic I will go over in more depth when we talk about different points programs / credit cards. It’s worth mentioning briefly now, especially for my example in the next section. Because we can all agree points are a made-up currency, it’s important to assign a value to them relative to something we all understand, like US Dollars.

While it isn’t essential to do this, I personally like to know “Am I getting good value from my points using them for XYZ flight/hotel/etc., or should I just pay cash instead?” How points are valued changes from person to person, but I tend to think of it like this: how much cash would I generally expect to save by using these points with minimal to moderate effort?

For example, I value 1 (one) American Express MR point at around $0.015 (aka 1.5 cents). This means if I suddenly have 10,000 Amex points in my account, I know generally that will save me about $150 in cash towards travel. If I find a flight that costs around 10k points, but I see the cash price is only $90, I will just pay cash and save my points when it will save me more money.

Many popular blogs post their own valuations, some are more realistic than others, but if you’re curious just Google, “What are [insert hotel/airline/pizza chain] points worth?” and you’ll get tons of hits.

A Not-So-Quick Example of Transferrable Points In Action (and how they can save you a ton of money)

Kayla and I recently got back from Europe, a trip booked almost exclusively using points, of course. We flew non-stop from San Francisco (SFO) to Amsterdam (AMS) on KLM Royal Dutch Airline. This was the only available non-stop flight from SFO, and flying non-stop is definitely a priority for us.

The price of an economy ticket for this one-way flight using points was only 20,000 Flying Blue Miles (the name of the points program both KLM and Air France airlines use) plus about $80 in taxes and fees per person.

I was able to transfer points from my American Express card and turn them into Flying Blue Miles, allowing me to book directly with KLM.

Using my own valuation of Amex points mentioned above, I would generally expect 40,000 Amex points to cover about $600 worth of travel. $600 for two people to get a direct flight from the West Coast to Europe isn’t that bad. But here is where the value of points really shows. The actual cash price for these tickets was right around $700 PER PERSON(!) which is unreasonably expensive for a one-way flight.

Just so you can see this visually, doing a quick search for the same flight on a random date in September 2023 you can see the cash price is an absurd $1,227 on the 17th.

When I search the exact same flight, but this time using miles (aka points) to book, you can see it’s only 20,000 miles + $86 for taxes/fees!

Instead of the $600 worth of value I would normally expect to get from my 40,000 points*, I actually got $1,240 in value** from our flights. This is what I meant many, many paragraphs above when I said you can get crazy outsized value if you put in a bit of legwork and learn how to leverage points.

*[40,000 points X $0.015 (aka 1.5 cents) = $600]
**[$1,400 cash price - $160 I had to pay for taxes/fees when using points = $1,240]

The return flights in economy were priced very similarly; 20,000 points per person vs. roughly $700 per person, AMS to SFO non-stop. So in reality, taking roundtrip economy using points saves about $2,500.

You can see how having flexible, transferable points allowed us to take a direct flight while avoiding insanely inflated cash prices. Now I know I *saved* $2,500 in cash by using points, but the reality is, we would have NEVER spent $2,500 on a roundtrip flight to Amsterdam in economy to begin with. Which brings me to my next….point…

Without these points to cover the cost of the flights, we wouldn’t have been able to take this trip and experience a new country, at least not for a few years while we scrimped and saved. For me, this is the entire point of having points in the first place; to make travel possible when it otherwise wouldn’t be financially feasible or responsible.

I’ve joked a bunch already about how I’m points rich but cash poor, which is how I am able to travel the way that I have over the last few years without raking in a six-figure salary. Your financial situation likely isn’t the same as mine, though. Maybe you would have no problem paying $2,500 for a roundtrip flight for two people to Europe, or maybe you wouldn’t even pay $1,000.

The beauty of using points is that you don’t have to have to do either. Instead, you can do what I do: Pay with points and use some of that cash you saved to eat and drink whatever the fuck you want while on vacation!

What places would you like to try and travel to without using cash for the flights or hotels? Be sure to leave a comment and I may post a tutorial on how to get there using transferrable points (make sure to tell me your home airport)!

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