I can’t remember a time when so much has changed so quickly in the points and miles space as has happened this summer. First, Chase chases away its core consumer base, and now Citi AAtracts us with American Airlines. And the summer is only halfway through! I wonder what’s next?
Chase couponifies and complexifies
The biggest event so far this summer was when Chase simultaneously made huge changes to their Sapphire Reserve card and the redemption value of their points.
The Sapphire Reserve card was ideal for the traveling masses when it was initially introduced. It offered 3x for travel and dining, and 1.5 cents per point value when redeeming points for travel. It was simple and rewarding.
The new Sapphire Reserve card is an entirely different beast. It’s expensive and complicated. The people who will find it most rewarding are the optimizers who don’t mind searching for ideal ways to utilize the card’s new coupons and who are willing to watch and wait for the best Points Boost awards. Everyone else will find this card more complicated, more expensive, and less rewarding than before. In other words, it’s a great card for me, but not a great card for me to recommend to others.
Speaking of Points Boosts, Chase brought those to the Sapphire Preferred® and Ink Business Preferred® cards as well. From these cards, Chase eliminated the old 1.25 cents per point value when redeeming points for travel and introduced the ability to sometimes get better value, but usually get worse.
In summary, Chase Ultimate Rewards used to be the program that I recommended to casual travelers, but it’s now best suited for advanced optimizers.
Citi ThankYou Rewards becomes a contender
A few days ago, Citi quietly added American Airlines as a transfer partner. This is huge. Until now, Citi didn’t have a major US airline program as a transfer partner. Chase and Bilt have United. Amex has Delta. And now Citi has AA. I’d argue that AA is a much more valuable transfer partner than either United or Delta. While pricing for AA’s own flights is dynamic, they’ve kept their old partner award chart, which is terrific. You can fly Japan Airlines business class from North America to Japan for only 60,000 points one-way. You can fly Qatar business class from North America to South Africa for only 75,000 points one-way. You can fly Qantas business class to Australia or New Zealand for only 80,000 points one-way. See also: My AAdvantage love affair continues.
It’s suddenly reasonable to ask whether Citi ThankYou Rewards points are the most valuable transferable points. They already had excellent hotel transfer options (Preferred Hotels, Choice Hotels, Leading Hotels of the World, and more). And now, with the addition of AA, Citi has a great line-up of airline transfer partners.
I’m not ready to say that I’d be happy having only Citi points in my portfolio. Citi is missing several valuable partners:
- Alaska Mileage Plan (Transfer from Bilt)
- Air Canada Aeroplan (Transfer from Amex, Chase, Capital One, or Bilt)
- World of Hyatt (Transfer from Chase or Bilt)
Due to existing contracts, it’s nearly impossible for Citi to obtain transfers to Alaska or Hyatt. But I’m surprised that they don’t offer transfers to Air Canada. Citi is the only major player that doesn’t (unless you count Wells Fargo, but I’m not ready to put them in the “major” category).
Check out this page to compare transfer partners across programs: Complete List of Transferable Points Partners
What’s Next?
Alaska Airlines Premium Card
We’re eagerly anticipating Alaska’s premium card, which was promised for this summer. Among other things, this card will offer 3x for dining and foreign purchases. The latter is huge. When traveling internationally, I expect this card would be my one go-to for nearly all spend. When have I previously considered an airline card to be the most rewarding card for spend? Never. This will be a first.
Amex Platinum Refresh
Amex has announced that a major refresh is coming to the Platinum and Business Platinum cards. We don’t have any specifics yet, but it’s a good bet that they’ll raise the annual fees and introduce even more coupons. But maybe there are other things in the works as well? Maybe we’ll see a new transfer partner (such as Alaska Mileage Plan)? Maybe we’ll get new ways to redeem points for good value? We’ll see!
US Bank
We just learned that US Bank plans to nerf the Altitude Reserve card on December 15th. However, the same announcement says that Altitude Reserve points will be transferable to “other Loyalty Programs.” Will the transfers be one-to-one? Will the transfer partners be any good? Will US Bank allow transfers from other cards? Maybe the Smartly card is only mostly dead? I doubt whatever US Bank does will lead to a significant change in the points and miles landscape, but you never know.
Capital One? Wells Fargo? Others?
Are there other major surprises in store for us in the near future? Capital One has been quiet lately, except when they announced plans to nerf Venture X authorized user and guest lounge access early next year. Maybe they’re cooking something up? Or how about Wells Fargo? They made a big splash when they launched their Autograph Journey Visa card and simultaneously introduced a limited set of transfer partners. Since then… nothing.
What do you think? Will there be other major changes to the points & miles world in the next month or two? Comment below.
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Since travel portal redemptions seem to be a major focus of all the lenders this year, I think AMEX will have to make theirs more competive if they are raising the fee to $1k. Only time I use it is to kill the annual hotel credit.
I forgot about Wells Fargo. They promised to add more transfer partners and then just failed to follow up. With the devaluation of CSR, underwhelming Citi debut, and likely Amex devaluation, now would be a great time to announce something and steal some of those disappointed customers.
I am surprised that they haven’t added Air Canada or Singapore Airlines, since they partner with most of the other bank programs
Wells added Virgin Atlantic to its original list of transfer partners. When TAP joins Flying Blue, it will indirectly be a transfer partner. Similarly, Finnair and Qatar are indirect transfer partners.
I’d guess that Bilt is consuming the time and energy of its credit card team. Once Bilt is done, maybe we see more transfer partners.
The high value (and high fee) couponized cards are a good fit for couples with no kids with good jobs. Hotel rooms are designed for 2 people. Breakfast benefits for 2. Finding 2 award tickets in Business is still manageable. All the coupons and perks are redeemable for those with flexibility. Plus, endless referrals to each other. Once you start building a family it really becomes a chore keeping track of everything.
I have to believe that C1 is also in a refresh cycle. They announced the lounge changes for February, but they also sent out a survey several months ago to some users about a competitor to the Amex Gold card (a revival of the old Savor card with the annual fee). I expect something there.
You also left off the Bilt 2.0 refresh and move to Cardless. That could have some weird changes too. I wonder if Bilt follows the Chase model of axing the 1.25 cpp portal redemptions, now that they don’t have to compete with the CSP.
Shut down by AA and with a very long international stint coming up in August, I’m anxiously awaiting the Alaska premium card. I just hope “August” means early August, not August 31st.
I think it will be 8/20 or the day after. AS is hosting an event in the evening on 8/20 where details of the new loyalty program will be released
With the 1:1 Accor transfer, and now the availability to transfer to AAdvantage…
I’m looking for Tim to knock the 100K Vacay out of the park!
No pressure.
The Citi echosystem is a good fit for the casual traveler. It feels like Citi is taking the middle ground where the CSR use to be before all the coupons. You can easily recoup 500 of the 595 AF with the 300 hotel and splurge credits. They have a good earning structure with the Premire, Custom Cash and Double Cash.
It would be a big win if Bank of America would make Alaska a transfer partner! That seems to be to much to ask as they are locked in their relationship strategy and no transfer partners.
All these credit card programs are on an unsustainable path. They’ll keep raising fees, offering “bigger” welcome bonuses, cutting benefits or making them harder to use. Their customer base overlaps with one another, so only one or two of them can be successful and survive in this game. Citi is unlikely to be one of the survivors because it lacks the discipline and resourcefulness to play in this game long term. It’s more likely that it will lose some serious money and quit competing before too long.
For some consumers, yes, the path is unsustainable and they will drop out. But, for a specific profile of consumer, no, the path is indeed sustainable and they will remain. And, for the companies themselves, the comments of the Amex CEO on a recent earnings call would suggest the path is sustainable. In spite of what we on the outside might think, there is substantial growth in net new cardholders.
Amex – If all it does is add coupons to and raise the annual fee of the Platinum, Chase wins. People will still keep the Platinum but charge flow will go to the CSR. To remain competitive, the Platinum’s earning structure needs to change.
US Bank – It will be hard for it to overcome its track record of unreliability over the past couple years. Sure, there will be some takers. But, hobbyists should be wary.
Wells Fargo – Expansion of transfer partners. Emirates and Singapore at a minimum. It needs to get past Bilt to start thinking about the Autograph Beyond.
Technically you can transfer thank you points to Alaska but not at a good rate. 5,000 choice points can get you 1,000 Alaska miles, which is something I’ve done in the past to top off an account.
Appreciate the content, but maybe on the same day that an 8.8 earthquake struck in the north Pacific, we might not choose a “seismic” metaphor for the title of this article?
This cannot be a serious comment. Get over yourself.
You’re right. Better to write “Tsunami of change coming to points and miles”.
PS there are thousands of earthquakes every day, so find something else to be offended about, I’m sure that will be easy for you.
I would bet that Amex leapfrogs Chase for highest annual fee.
I gave up on earning airline miles with a view to collecting Chase UR points. To that end, I got a Sapphire Reserve card. I am about to downgrade it to a Sapphire Preferred. (Once my UR points are consumed, I will cancel my Preferred.) From now on, I will use only my Citi Costco card and other, non-Chase cash reward cards. The spending categories are easily manageable.
Good article. I’m cautiously excited. Once AA gets flooded with all those new Citi points for their partner award flights, I’m sure they’ll finally have the perfect reason to go completely dynamic .
I’m not ready for AA pesos. I’m planning to book all my AA award flights sooner rather than later.
Sadly, alaska will likely devalue as soon as their merger is complete so I’m rushing to book all my Alaska flights.
Things change so fast these days and almost a new devaluation each week. I’m not taking the risk…
Citi can’t really be considered for #1 because they simply don’t have the breadth of Chase (4 business cards, several personal cards), and Amex (almost the same), plus their liberal grant of multiples. I don’t think the small Citi Strata family can compete with the Chase and Amex clans.