When I first started learning about points & miles, one concept completely confused me:
Why would I earn travel points when I could simply earn cash back?
After all, most people value points at about 1 cent each.
That means:
- 10,000 points = about $100
- 50,000 points = about $500
- 80,000 points = about $800
At first glance, cashback seems simpler. Earn points, redeem them for cash, and pay for your travel directly.
So why do so many travelers focus on transferable points instead?
The answer is simple:
Transferable points give you opportunities to get far more value than 1 cent per point.
What are transferable points?
Transferable points are points earned through certain bank programs that can be moved to airline and hotel loyalty programs.
Instead of being locked into one airline or one hotel chain, your points can be transferred when you’re ready to book.
Some of the major transferable point currencies include:
- Chase Ultimate Rewards
- American Express Membership Rewards
- Capital One Miles
- Citi ThankYou Points
Think of transferable points as a flexible travel currency.
You earn the points with a bank, then decide later where they will be most valuable.
The Cashback Comparison
Let’s imagine you earn 80,000 points.
With a simple cashback strategy, those points are worth approximately:
80,000 points = $800
You could take the $800 and purchase a flight.
There’s absolutely nothing wrong with that.
In fact, cashback can be a great strategy for many people.
But transferable points open up another possibility.
The Example That Changed Everything For Me
Let’s look at a real example.
A one-way economy flight from Atlanta to Paris might cost:
- $809 if purchased with cash
If you were using a cashback strategy, you would need roughly:
80,000 points
to cover that $809 ticket.
Now let’s look at the exact same flight using transferable points.
Instead of redeeming your points for cash, you transfer them to Flying Blue (the loyalty program for Air France and KLM).
That same flight may be available for:
25,000 Flying Blue miles + $139 in taxes and fees
Let’s compare:
Cashback Strategy
- 80,000 points
- Flight cost covered
Transferable Points Strategy
- 25,000 points
- $139 taxes and fees
You are sitting in the exact same seat on the exact same airplane.
The difference is that one strategy requires about 80,000 points while the other requires only 25,000 points.
That is the power of transferable points.
Left: Real Flying Blue search showing the cash price of the flight.
Right: Real Flying Blue search showing award price for the exact same flight.
Flights aren’t the only place transferable points shine…
Hotels can offer incredible value too. In some cases, transferring points to a hotel partner can save hundreds of dollars per night.
This is the Hyatt Regency Maui. By transferring Chase Ultimate Reward points to Hyatt, we booked this room for 29,000 points and $0 per night instead of paying roughly $700 in cash. This is one example of how transferable points can create outsized value for hotel stays.
A Helpful Way to Think About It
Many beginners think:
“One point equals one cent.”
I prefer to think about it differently.
A transferable point is more like a coupon that can be used in multiple places.
Most of the time it might be worth around a penny.
But sometimes a travel partner offers an opportunity where that same point becomes dramatically more valuable.
The goal isn’t to use points for every trip.
The goal is to identify opportunities where your points stretch much further than cash.
Why I Recommend Starting with Transferable Points
One of the reasons I recommend beginners focus on cards that earn transferable points is flexibility.
Let’s say you earn 60,000 points.
You don’t have to decide immediately whether those points will become:
- Hyatt points
- Southwest points
- Air France miles
- United miles
- British Airways Avios
You can wait until you’re ready to book.
Then you transfer the points where they create the most value.
That flexibility is incredibly powerful.
The Catch
Transferable points are not always the best option.
Sometimes a flight is cheap.
Sometimes a hotel redemption isn’t a great deal.
Sometimes paying cash makes more sense.
The goal is not to force every trip onto points.
The goal is to understand your options and choose the one that gives you the best value.
It is also important to understand that once points have been transferred, they cannot be transfered back to the bank. It is a one-way street.
Why This Matters
Understanding transferable points was the concept that completely changed how my family traveled.
Once I realized I wasn’t limited to redeeming points at one cent each, a whole new world opened up.
Family ski trips.
Beach vacations.
Europe.
Weekend getaways.
The ability to transfer points to airline and hotel partners is what makes points and miles so powerful.
And once you understand that concept, everything else in this hobby starts to make much more sense.