When should you use a co-branded credit card?

There are many benefits to using Transferable Points alike Chase Ultimate Rewards Points use a specific airline or hotel currency, including flexibility, flexibility, and… flexibility. You’ll get more value from your points when you can choose which partner in a single alliance to move to and when you can explore alternative routes if no awards are available on your first-choice itinerary. And you can even decide whether to redeem your points for flights or hotels.

It should come as no surprise that more than half TPG’s Top Travel Rewards Cards Earn transferable bank points instead of individual airline or hotel points.

That doesn’t mean there isn’t value in co-branded hotel and airline cards, though. While I spend the majority of my spending on cards like Chase Sapphire Reserve® And Chase Freedom Unlimited®There are many situations where using a co-branded card makes more sense than a more flexible alternative.

Here are times when I use a co-branded card instead of a transferable rewards card.

Get hard-earned miles

While Chase Ultimate Rewards Points And Amex Membership Rewards Points gives you combined access to over 20 hotel and airline transfer partners, not all miles can be easily earned from transferable cards. A great example of this is Alaska Mileage Plan miles. TPG August 2024 valuation They are priced at 1.55 cents per point, slightly lower than Chase and Amex flexible points (2.05 and 2 cents per point, respectively). They earn this high mark because of the great redemption options they can help unlock, including US-Asia JAL or Cathay Pacific business class for just 75,000 miles one way.

The only points that can be transferred to Alaska are Bilt Rewards Points And Marriott Bonvoy Pointsand you will profit when you spend directly on Alaska Airlines Visa Signature® Credit Card. This card happens to be offering a limited-time offer of Buy One Ticket, Get One Ticket with Taxes and Fees Only ($0 fares plus taxes and fees from $23) and 50,000 bonus miles after spending $3,000 or more on purchases within the first 90 days of account opening. This bonus is worth $775 based on TPG as of August 2024 valuationGet you more than halfway to your first-class flight.

When it comes to Marriott points, they fall into a bit of a gray area in terms of terminology. While Marriott cards are “co-branded” (even though they’re issued by Chase or Amex, they earn hotel points), those points are flexible and can be shipped to 45 airline partnersThese cards are no longer valid. daily expenses, not bonuses.

However, if you have a specific ransom in mind, like a dream flight Emirates First Class or a wooden house on the water somewhere far awayYou may find it makes sense to sacrifice a higher income level to earn the specific number of points you need.

Related: The best Marriott hotels in the world

Earn welcome bonus

In addition to annual fees, credit card companies make a large portion of their profits from exchange fee (swipe fees) and constantly look for ways to encourage you to use the card more. With co-branded cards, this often comes in the form of a welcome bonus for new applicants.

Most cards offer a large welcome bonus if you spend a certain amount within a certain period of time. For example, United℠ Explorer Card Get 50,000 bonus miles after spending $3,000 in the first three months.

This bonus is worth $675 based on TPG August 2024 valuation and can help you get Polaris business class tickets to select destinations around the world.

If you have a big purchase coming up, you can open a new co-branded credit card and use that purchase to earn a stack of points or miles that might take years to earn through everyday spending.

Related: Best Credit Card Welcome Offers of the Month

Travel benefits

Aside from the welcome bonus, one of the best reasons to keep a co-branded credit card open long term is because of the brand-specific perks they offer. For co-branded hotel cards, this can be night without memories or elite status. For co-branded airline cards, these may include free checked baggage And priority boarding with the airline. Many co-branded cards link these perks directly to your loyalty account, but with some cards, you actually need to pay for your travel on the card to enjoy them. For example, United will often not honor the first free checked bag that comes with the United Explorer card if you book with another card.

Among many airline credit card offers discounts on in-flight purchases, all of which specify that you must use that particular card to get the discount. A 20-25% discount easily beats the returns you get from a flexible travel card like Chase Sapphire Reserveequivalent to 6.15% (3 points per dollar, each dollar is worth 2.05 cents).

Another example of a good time to spend on a co-branded card is when you need to spend to earn a free night reward or elite status. For example: Hilton Honors American Express Surpass® Card This card offers one free night after spending $15,000 in a calendar year.

Remember that this is a big expense and for most of us, it will take careful planning throughout the year to achieve it. It is important to consider the opportunity cost of spending on a single card and, if you are chasing status, how much value you will get if you do not qualify naturally.

Related: Redeem Hilton Free Nights: 10 of the World’s Best Hotels to Use Your Rewards Certificate

Better earning rate at hotel

Most airline co-branded credit cards offer double points on flights booked with that specific airline, and you can easily do better with a card like Chase Sapphire Reserve or The Platinum Card® from American Express. But co-branded hotel credit cards offer much higher interest rates and can be the most valuable way to book stays.

To keep things simple, I’ll compare all of these cards to the Chase Sapphire Reserve and its 6.15% cash back (3 points per dollar) on hotel bookings (It offers 3 points per dollar on travel, including hotels.). The chart below shows how useful a hotel credit card is when used to stay at that hotel chain.

Returns calculated based on TPG August 2024 valuation.

The information about the Hilton Honors American Express Aspire card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

You’ll be sacrificing some benefits like travel insurance if you don’t go with the Sapphire Reserve, but the extra rewards may make it worth it. Even Marriott cards (all of which earn 6 points per dollar at Marriott hotels) may be worth more than the Sapphire Reserve. While TPG’s August 2024 valuations put those points at 0.6 cents each, you could easily get many times more value if you switch to airline partners for first-class rewards.

Related: How to choose a hotel credit card

Keep rewards from expiring

One problem with travel rewards (especially difficult for frequent international travelers) is keeping track of small mileage balances in different accounts and preventing them from expiring.

Most airlines only require you to have some type of Mileage activity every 1-2 years (Terms vary by program), and so when someone’s miles are about to expire, I often hear people suggest transferring at least 1,000 points from Chase or Amex to keep those miles active. This can certainly work, but if you don’t plan on using those miles in the near future, you’ve just wasted 1,000 valuable miles that could be used elsewhere.

A much simpler option, if you have the right co-branded card, is to just walk into a convenience store and buy a pack of gum or some other small purchase. You’ll earn a few miles on your statement, enough to reset the expiration date on your loyalty account. Just keep an eye on your calendar and make sure your statement closes/your miles are posted before the expiration date.

The last line

We don’t recommend building your rewards strategy around co-branded cards, but there are cases where they can be useful even without a welcome bonus. You’ll find more perks and more generous bonus categories with flexible points cards, but co-branded cards can offer rewards that are uniquely valuable to the specific airline or hotel that issues them. If you’re loyal to a single airline or hotel, engaging directly with each of their credit cards can help boost your bottom line.

Related: How to Choose the Right Travel Credit Card for You