Over the last decade, I’ve taken countless trips and saved thousands of dollars on incredible travel experiences by leveraging airline and hotel credit cards. In that sense, rewards credit cards offer a fantastic value proposition. But there’s one looming possibility that could threaten the value of your hard-earned points at any given moment: loyalty program devaluations.
Airline and hotel loyalty programs have a history of devaluing their programs with little to no advanced notice. As a result, members often find they no longer have enough points for bucket list vacations they’ve been saving up for. It’s an unfortunate situation to be in and bound to happen more often, especially as the travel industry rebounds.
Airlines and hotel chains relied heavily on selling their loyalty currency in order to stay afloat during the pandemic. Points have flooded the market and travel costs have increased as increasing vaccination rates have made it possible to travel safely once again. That means airlines and hotel brands are gearing up for high redemption costs. The best way to mitigate that problem is with a devaluation.
Several loyalty programs have already introduced increased award charts, while others have eliminated them altogether. While there’s no way to avoid devaluations, there is a way to protect yourself against them by leveraging the right programs. Here are three types of devaluation-proof credit cards everyone should have in their wallets:
A credit card that earns transferable travel rewards
Credit cards that earn transferable rewards are the most essential type to have if you want to ward off devaluations. These cards allow you to earn rewards points you can transfer to over a dozen airline and hotel partners. Since you’re not tied to one loyalty program and have flexibility in how you use your points, you’re less likely to face an unannounced devaluation.
For example, Chase Ultimate Rewards is a transfer partner of the following loyalty programs:
- Aer Lingus AerClub
- Air Canada Aeroplan
- Air France-KLM Flying Blue
- British Airways Executive Club
- Emirates Skywards
- IHG Rewards Club
- Iberia Plus
- JetBlue TrueBlue
- Marriott Bonvoy
- Singapore KrisFlyer
- Southwest Rapid Rewards
- United Mileage Plus
- Virgin Atlantic Flying Club
- World of Hyatt
So if Air Canada decides to devalue its award chart and increase the number of points required for flights, you’re not stuck paying the inflated rate. You can check fellow Star Alliance partner United’s redemption rates and if they’re lower, you can transfer your Ultimate Rewards to Mileage Plus for better value.
Alternately, if every loyalty program decides to devalue tomorrow, you have the option to redeem your points for a statement credit or book travel directly through the Ultimate Rewards travel portal. As a Chase Sapphire Reserve® cardholder, your points are worth a flat 1.5 cents each towards travel portal bookings, while Chase Sapphire Preferred® Card cardholders get 1.25 cents worth in value per point.
If you’re looking for a transferable rewards card, I recommend cards that offer any of these:
All these programs have a diverse list of travel partners that can provide lots of transfer options in case of a devaluation.
Some great starter credit cards for each of those programs include:
A 2% cash back card (or equivalent)
Sometimes cash back is more valuable than any points you can earn. This is especially true regarding hotel loyalty programs, which have devalued substantially over the last decade. For example, in 2013 Hilton Honors increased the required points for top-tier award nights from 50,000 to 95,000 points per night, effectively devaluing Hilton points value by nearly half.
Since then, the program has taken a further hit, with Hilton no longer publishing an award chart and top-tier standard awards reportedly starting at 150,000 points per night and increasing with demand.
World of Hyatt recently introduced a new award chart with peak pricing, while Marriott announced higher award prices after merging with Starwood Preferred Guest, eliminating award charts completely in March 2022. In all these cases, the points loyal members acquired became less valuable.
The only way to truly protect yourself against a devaluation like this is to earn cash back rewards. With most hotel currencies valued at 0.5-1.7 cents per point, putting your spending on a 2 percent cash back card might be more rewarding and practical. There are no restrictions on redeeming cash back or concerns about award inventory. If a program devalues, it won’t make a difference because cash prices aren’t affected.
As an added bonus, many cash back cards carry no annual fees and some even allow you to convert your cash back rewards to points. The Citi Double Cash Card can be paired with a Citi ThankYou points-earning card like the Citi Premier® Card to convert 2% cash back to 2 ThankYou points per dollar spent.
The Chase Freedom Unlimited earns 1.5 percent cash back on all spending and up to 5 percent back in select spending categories. Once again, you can convert these rewards to Chase Ultimate Rewards points if you have another card in your wallet that earns those rewards (for example, the Chase Sapphire Preferred or Sapphire Reserve).
The Capital One Venture and Capital One Venture X Rewards Credit Card are also solid options because they earn 2x miles on all purchases. The Venture X also earns 5X miles on flights booked through Capital One Travel and 10X on hotels and rental cars booked through the portal. Not only can these rewards be converted to cash back, but you can also transfer them to a variety of airline and hotel transfer partners at a 1:1 ratio or redeem them for statement credits on travel purchases. This is about as devaluation-proof as loyalty programs get.
Hotel credit card with an annual free night benefit
Hotel loyalty programs—and their co-branded credit cards—are far from devaluation-proof. However, they offer one benefit that might take the sting out of devaluations: annual free night awards. When hotels increase award redemption rates, annual free night awards issued to credit cardholders keep top-tier award nights attainable.
For example, in 2017 Hilton Honors eliminated its award chart entirely, making the official switch to dynamic pricing. That means there’s no telling whether the points you’ve been saving up for that bucket list vacation will actually be enough. An unrestricted free night award takes some of the guesswork out of that dilemma.
Here are all the hotel credit cards offering unrestricted annual free night awards when you renew your credit card:
Outside of the Hilton portfolio, there are three hotel chains offering credit cards with annul free night awards. Granted, these free nights are much more restricted, but if you’re loyal to one of these brands, you can still glean plenty of value from it:
The bottom line
Loyalty program devaluations are inevitable, but by diversifying your points portfolio and focusing on flexible rewards, you can minimize the damage to your bottom line. Diversity is especially key and the old adage, “Don’t put all your eggs in one basket,” is particularly true. With a good number of transferable and cash back rewards, you won’t be as negatively impacted if one or more of your favorite programs devalue their currency.
*The information about The World of Hyatt Credit Card, Marriott Bonvoy Boundless® Credit Card, IHG® Rewards Premier Credit Card, Hilton Honors American Express Aspire Credit Card and Hilton Honors American Express Surpass® Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.