Ultimate Rewards for Flights Vs. American Express Rewards

Due to the popularity of the Chase Sapphire Preferred card, it seems as though we need to put it against a long time non-mileage card to see how the Ultimate Rewards compare to American Express Rewards cards.

For a basic introduction, I’ve done a review of American Express Rewards.

Annual Fee Comparison

We all know comparing apples to oranges is a poor strategic move.  So we need to first establish what type of annual fees are associated with the leading cards that earn these various points.

Card Name Earning Points Program Annual Fee Sign Up Bonus
AMEX Platinum 1 point per dollar spent AMEX Rewards $450 25,000
AMEX Premier Gold 3x on airfare
2x on groceries and similar
1x the rest
AMEX Rewards $175 15,000
AMEX Gold 1x AMEX Rewards $125 15,000
Chase Sapphire Preferred 2x travel
1x on all else
Ultimate Rewards $95 50,000
Chase Sapphire Preferred 1x Ultimate $0 25,000

If you are also a business owner, then you’ll probably want to explore the business cards also associated with these programs.  Both do offer related business cards.

Earning Potential

In the earning category, one thing that strongly favors the American Express Rewards program is that it frequently runs various transfer bonuses.  Recent bonuses include things such as:

  1. British Airways 50% transfer bonus
  2. Starwood Hotels 25% transfer bonus
  3. Virigin 25% transfer bonus
  4. Delta 50%

If you earn Ultimate Rewards with the Chase Sapphire Preferred, you’ll also get a 7% bonus on the points you earn in a year.

Burn Potential

The burn potential is how efficient, easy, and valuable it is to use your points.

American Express Rewards Airline Transfer Partners:

Conversion Rate: transfers by the 1,000’s unless otherwise noted

  • Delta Airlines  1:1 (i.e. 1000 Delta SkyMiles requires 1,000 Membership Rewards Points (MRP)
  • AeroMexico 1:1
  • Air Canada 1:1
  • AirTran 1 credit requires 1,500 MRP
  • Alitalia Airlines 1:1
  • All Nippon Airways 1:1
  • British Airways 1:1
  • Continental Airlines* (until Sept 30th, 2011) 1:1
  • EL AL Israel Airlines 15 Matmid points = 1,050 MRP
  • Air France & KLM 1:1
  • Frontier Airlines 1:1
  • Hawaiian Airlines 1:1
  • Iberia Plus Airlines 1:1
  • JetBlue Airways 200 TrueBlue Points = 250 MRP
  • Singapore Airlines 1:1
  • Virgin Atlantic 1:1

Ultimate Rewards Airline Transfer Partners:

  1. British Airways 1:1
  2. Continental (thus, ultimately United as well) 1:1

Notes:

I think there is a very valuable place for having points with these programs that are not directly associated with any program.  They provide the flexibility to top up accounts when you’re making an award booking.  Obviously, there is no doubt that the American Express Rewards program gives you many more transfer options – thus ultimately making the program more valuable when it comes to transferring miles to programs. 

For most of us, it comes down to the airlines/routes/programs we wish to use.  If I had a preferred transfer airline, it would be American, but clearly neither offer that choice.  Next, I would have said British Airways (before the recent change).  Third would be either Air Canada or United for me.  In the end, I see a lot of overlaps and advantages with each program.

If one were using the points to book flights using points as cash, then Ultimate Rewards has the advantage as they award a 20% bonus when you use their booking portal to spend Ultimate Rewards to book your travel.  Thus, the 50,000 point sign up bonus with Chase Sapphire Preferred can translate into $600 worth of travel.

American Express Rewards transfer instantly.  Million Mile Secrets confirms that Ultimate Reward transfers to Hyatt and British Airways miles transfer instantly.  You may need to wait a few days for the others.  Both American Express Rewards and Ultimate Rewards can be transferred into another person’s frequent flyer account.  This is useful if one person needs extra miles to reach an award tier level.

Questions to Ask/Verdict

How much do you plan to spend on the card annually?

I’m not a huge credit card spender.  Thus, the annual fee becomes more important for me.  Here’s an illustration:

Lets say I’m going to spend $1,000 per month ($2,000 per year on airfare) and keep the Premier Gold or Chase Sapphire Preferred card for five years.  The question is: would I rather 143,380 Ultimate Rewards points for $380 or 95,000 for $700?

  Points year 1 Points year 2-5 Total Points Earning in 5 years Annual Fees paid (1st year free)
Chase Sapphire Preferred 50,000 Sign up bonus
10,000 regular spending
4,000 airfare
4,480 bonus
Total = 68,480
10,000 regular
4,000 airfare
980 bonus
Total = 14,980
x 4 years
Total over 4 = 74,900
143,380 $380
American Express Premier Gold 15,000 sign up bonus
10,000 regular spending
6,000 airfare
Total = 31,000
10,000 regular
6,000 airfare
Total = 16,000
Total over 4 =
64,000
95,000 $700

It is quite possible that one could transfer those 95,000 points during a 50% bonus special or something and end up with 142,500 miles in a program.  Also, if one could take advantage of a higher sign up bonus with AMEX, then obviously that would close the gap.

For my spending and flying preferences, I’d go with Ultimate Rewards.  But that doesn’t make them better.  Just better for me.  You’d need to do the math with your own numbers and travel preferences in mind.

What are your preferred travel airlines?

Obviously, if you want to have a wider variety of redemption options, American Express Rewards has the advantage (unquestionably).

The Right American Express Rewards Customers:

  1. Higher annual spenders (justifies the more expensive annual fees).
  2. More frequent air travelers (take advantage of the 3x bonus on airfare with Premier Gold).
  3. People who want a larger access to airlines.  Again, this would be folks who travel more frequently.

The Right Ultimate Rewards Customers:

  1. Lower Spenders.
  2. Those who travel less frequently and are content with a smaller number of airline partners.
  3. Those who wish to use points as cash instead of transferring them to a reward program.

How do these cards compare to some of the best airline credit cards?  Compare them here.

Which program do you prefer?  Why?

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