21. Transfer Bonuses and Speculative Points Transfers

Welcome to Point Me to First Class, the only show for employed professionals, entrepreneurs, and business owners who are looking to optimize their higher-than-average expenses to travel the world. I'm your host, Devon Gimbel, and I believe that your expenses are your greatest untapped asset if you know how to leverage them. Ready to dive into the world of credit card points and miles so you can travel more, travel better, and travel often? Let's get started.

Hey everybody. Welcome back to the podcast. Today I want to talk about the question of whether it's a good idea to speculatively transfer points from a credit card account to an airline account, or whether it's not a good idea to speculatively transfer points. 

The reason that this is a particularly relevant question this week is that three of the major transferable points currencies, American Express, Chase, and Capital One, are currently offering transfer bonuses when you move points from your credit card account to specific airline transfer partners for a limited time. Transfer bonuses offer a unique opportunity to get even more value from your points. 

So before we dive into whether it's a good idea or not to speculatively transfer your flexible points to take advantage of a transfer bonus. First, let's look closer at what a transfer bonus is and how they can help you maximize the potential value of your transferable points. 

Periodically, the issuers of the transferable points currencies, the five main ones being American Express, Chase, Citi, Capital One, and Bilt will offer a bonus if you transfer points from your credit card account to a specific airline or hotel loyalty account. This will be for a specified amount that usually ranges from around 15% up to as high as a 30% or 40% bonus. Every once in a while you may see a transfer bonus for more than 40%, but that's pretty rare. 

Transfer bonuses increase the usual transfer ratio between your transferable points to an airline frequent flier account from one to one to one to 1.5 to 1, 1 to 1.2, or more. When the transfer ratio between your transferable points currency to an airline transfer partner is one to one, that just means that for every point you transfer over, you get one point in your airline account. Transfer 100,000 Amex points to Air Canada Aeroplan, and you end up with 100,000. Aeroplan points. Transfer 100,000 Citi points to Turkish Airlines, and you end up with 100,000 miles in your Turkish Miles and Smiles account. Pretty straightforward. 

So if a given point system is offering a 15% transfer bonus to one of their airline partners, and you transfer over 100,000 points, you'll end up with 115,000 points in your airline frequent flier account. If a given point system is offering a 30% transfer bonus to one of their airline partners and you transfer over 100,000 points, you'll end up with 130,000 points in your airline frequent flier account. Again, pretty straightforward. 

As I mentioned before, transfer bonuses are offered periodically by the major transferable points issuers for a designated bonus amount and for points transfers that occur within a designated time frame, usually for a month or two. Currently three of the transferrable points currencies are offering transfer bonuses. In this episode, I'm going to specifically focus on transfer bonuses to airline frequent flier accounts. 

American Express is offering a 30% transfer bonus to Iberia Airlines and to British Airways for points transfers until August 31 of this year. Chase is offering a 20% transfer bonus to Air Canada Aeroplan through July 31, and Capital One is offering a 20% transfer bonus to Air France Flying Blue through July 31st. Between these four airline programs, you can do some pretty incredible flight bookings with points that become even better deals with a transfer bonus.

I've bought multiple award flights through British Airways, Air Canada Aeroplan, and Air France Flying Blue because each of these programs offers some unique award flight opportunities. I want to highlight a few of those here to give you all some ideas of how you can leverage the current transfer bonuses to your advantage. 

As I mentioned, American Express is currently offering a 30% points transfer bonus when you move Amex points to Iberia Airlines or British Airways before August 31. Iberia and BA are interesting in that they're actually part of a smaller airline partnership that also includes Qatar, Aer Lingus, and Vueling Airlines. 

These airlines share a points currency called Avios that can actually be transferred between the frequent flier programs of these different airlines allowing you to potentially use American Express points transferred to Iberia or BA, and then transfer those points over to Qatar or Aer Lingus or Vueling and book award flights through those programs as well. 

Some great award flights that can be booked using Avios earned from transferring Amex points to Iberia include economy and business class flights from the US to Madrid and vice versa. From Chicago, Boston, Washington DC, or New York's JFK Airport, you can fly one way in economy to Madrid, Spain for as little as 17,000 Avios if you're flying during a time of year that Iberia designates as off peak. 

A one way business class flight from these cities will cost only 34,500 Avios. With a 30% transfer bonus that means that you would only need 13,100 Amex points for a one way economy flight, and only 26,000 points for a one way business class flight to Madrid. 

Iberia also flies to San Francisco, Los Angeles, Dallas, and Miami, though award flights on those routes will cost more points than if you're flying from the East Coast or Chicago. British Airways is the other American Express transfer partner that you can currently transfer points to with a 30% bonus. BA offers tons of economy, premium economy, and even a good number of business class awards to over 30 airports in North America and has flight routes that cover much of Europe. 

But despite this incredible flight network, using Avios to book British Airways operated flights through British Airways actually isn't usually that great value. That's because of the high taxes, fees, and surcharges that BA levies on most of its award flights. 

But that doesn't mean that Avios are useless for booking award flights through British Airways, or that this transfer bonus to BA isn't worth seriously considering. That's because some of the best uses of BA Avios are to book partner flights. That means flights operated by different airlines, but that are still bookable through British Airways, including flights on American Airlines and Qatar. 

A favorite premium cabin points redemption of many in the points travel world, including myself, is using points to book the highly praised Qatar Qsuites business class product, which can be booked for about 70,000 Avios one way between the US and Doha. With the 30% transfer bonus from American Express, that means that you can spend over 13 hours in one of the highest rated business class products in the world for only 54,000 points one way. 

Now even if Doha is not your final destination, you can book itineraries in Qsuites from North America through Doha to Africa or India for around 105,000 British Airways Avios one way in business class, which would be reduced to 81,000 points with 30% transfer bonus. 

Another way to leverage the transfer bonus between American Express and BA is to book economy or business class award flights on Qatar is to take advantage of the partnership between Qatar and BA. Now Qatar airlines itself is not a transfer partner of American Express. So there's no option to transfer American Express points directly to Qatar in order to book flights. 

But because Qatar and British airways are in a partnership that share the Avios points currency, you can actually transfer points that you have in a BA frequent flier account over to your Qatar frequent flier account to book award flights. The Amex transfer bonus to BA effectively allows you to also get a 30% transfer bonus to Qatar because as long as your Qatar and BA frequent flier accounts are linked, you can freely move Avios or points between those two accounts. 

The second transfer bonus currently being offered is between Chase and Air Canada Aeroplan. If you transfer Chase Ultimate Rewards points to Aeroplan between now and July 31 of this year, you'll get a 20% bonus. Those extra points can go a long way with Aeroplan because not only can you Book award flights operated by Air Canada, but you can also use Aeroplan points to book flights on over 40 other airline partners based all around the world. 

You can use Aeroplan points to book one way economy class flights from the western US to Singapore for 60,000 points, and business class flights from the western US to Singapore for a little less than 88,000 points. With a 20% transfer bonus, that means that you would only need 50,000 points to fly economy to Singapore and 73,000 points to fly business class on one of the best reviewed airline products in the world. 

Another airline partnership that Aeroplan allows you to leverage to book a great award flights is with Emirates Airlines, which is based in Dubai. You can book an Emirates award flights directly through Emirates. But the downside of doing that is that you're going to be paying high taxes, fees, and surcharges even on tickets booked using points. On a business class ticket, those out of pocket costs can be as high as $800 or more on a one way award ticket, which obviously decreases the appeal of both during a flight using points.

But Air Canada Aeroplan does not pass along carrier imposed surcharges when booking an award ticket, meaning that you won't have to pay hundreds or even $1,000 to book an Emirates award flight when you book it through Air Canada instead of directly through Emirates. For example, a one way economy flight from Boston to Dubai on Emirates Airlines booked through Aeroplan would cost 45,000 points and around 77 Canadian dollars. A business class flight would cost 100,500 points and 77 Canadian dollars.

For the same economy flight Emirates charges almost 18,000 more points and 200 extra dollars. For the same business class flight, Emirates charges 38,000 more points and almost 800 more dollars. So booking an Emirates award flight using Air Canada Aeroplan points is cheaper both in points and the out of pocket cash expenses than booking directly through Emirates. 

When you factor in the 20% transfer bonus from Chase, the award prices offered by Aeroplan are even better. To book that one way economy class flight on Emirates, you'd need to transfer 37,500 points. To book that one way business class flight, you'd need to transfer about 84,000 points.

But Aeroplan also offers great options for flying from North America to Europe and back because of its partnership with several airlines in the Star Alliance, including Lufthansa, Swiss Airlines, Austrian Airlines, Brussels Airlines, Scandinavian Airlines, Turkish Airlines, and LOT Polish Airlines. 

For example, you can fly one way in economy class direct from San Francisco to Copenhagen on SAS Airlines for 40,000 points. With a Chase transfer bonus, you could book that flight for only 33,400 points. If exploring Istanbul is on your bucket list, you can book a nonstop flight on Turkish Airlines from Dallas to Istanbul for 90,000 Aeroplan points in business class, which would require only 75,000 Chase points with the transfer bonus.

If flying international first class is one of your travel dreams. You can use Aeroplan points to book yourself on a first class flight on Lufthansa from the US to Frankfurt or in the reverse direction for only 90,000 points one way or 75,000 points with the Chase transfer bonus. These are just a few award flights and airline partnerships that you can leverage through Air Canada Aeroplan. 

Traveling to Europe for fewer points is also possible thanks to the third transfer bonus currently being offered, which is a 20% bonus when you transfer Capital One points to Air France Flying Blue. Air France Flying Blue is the frequent flier program of Air France, which is based in Paris, and KLM airlines, which is based in Amsterdam. Between these two airlines you can fly from around 16 different airports in the US including both large international hubs, as well as a few smaller airports including Denver, Minneapolis, Las Vegas, and Austin to many destinations in Europe. 

One of the perks of the Air France Flying Blue program is that it offers some of the lowest points prices for flying between North America and Europe. A one way economy class ticket can cost as low as 15,000 points, and a one way business class ticket can cost as low as 55,000 points per person. With a 20% transfer bonus from Capital One, that means that you would only need 12,500 points to fly one way to or from Europe in economy, and 45,900 points to fly one way in business class. 

These points prices can be even lower if you're also able to take advantage of a promo award offered by Flying Blue. Promo awards are essentially sales on award tickets that are offered by Flying Blue. Every month Flying Blue offers 20 to 50% off discounts on select economy and/or business class flight routes.

At the time of this recording, the current Flying Blue promo awards are offering 25% off economy or business class award flights on 13 different routes, including 25% off KLM economy awards between Europe and Austin, 25% off Air France and KLM economy awards between Europe and Chicago, and 25% off Air France business class awards between Europe and Quebec just to name a few. 

With a 25% promo award a one way economy class flight from Chicago to Paris that normally costs 15,000 points would only cost 11,500 points. If you can combine that with a Capital One 20% transfer bonus, you would only need to transfer 9,600 Capital One points to Air France Flying Blue to have enough points to book the ticket at the promo award rate, which is a really incredible points price to fly from the Midwest to Europe.

But Flying Blue’s route network extends even beyond Europe, making it a great option to fly to destination ends such as Israel, Kenya, or South Africa as well. For example, you can apply economy one way from Los Angeles to Tel Aviv for as low as 35,000 points. With a 20% transfer bonus from Capital One, you'd only need 29,200 points for that flight. 

Another great benefit of booking award flights through Flying Blue is that they charge 25% fewer points for award tickets for children aged two through 11 years old. So that one way promo award economy ticket would cost only 8,000 Capital One points to book. Just to put how great a deal that is into perspective, you could redeem 8,000 Capital One points for an $80 gift card to Subway or you could use it to fly your kid to Paris with you. 

One important thing to note about these points transfer bonuses is that you receive the bonus points just by transferring points from the specific transferable points currency to the airline transfer partner, you do not have to use those points to make a flight booking during that same time period. So you can transfer points now during a transfer bonus period, and then leave them in your frequent flier account for a few months or a year or longer before you actually use them to book any award flights. 

When points transfer bonuses are going to be offered, how much they're going to be for, and from which points currency to which airline partner they're going to be offered is really anybody's guess. Because it's impossible to know when another transfer bonus will be offered and what the specifics of that offer will be, it can be very tempting to consider transferring points during a transfer bonus offer to capitalize on the ability to get those bonus points. 

So let's talk now about when it makes sense to take advantage of a transfer bonus and move points from a transferable points currency to an airline or hotel transfer partner. In the scenario where you're actively planning on booking award flights through a frequent flier program that's currently offering a transfer bonus, I think that's a total no brainer to just go ahead and transfer points because you have an immediate use for them. 

But what about when you don't have an immediate use for points in a particular frequent flier program, and there's a really attractive transfer bonus that's being offered that you don't want to miss out on? Well, that is where things get a little more complicated. 

Conventional points advice would tell you that you should not speculatively transfer points from a transferable points currency to an airline or hotel transfer partner to capture a transfer bonus when you don't have an immediate use for booking travel with those points. I think that there are very good reasons that this conventional advice is good advice for most people most of the time. 

First, points transfers from transferable points currencies to airline or hotel loyalty accounts are one way and irreversible. Once you transfer points from say your Chase account to your Aeroplan account, you cannot move them back to your Chase account. You use them to book travel through Aeroplan, or you don't use them. 

Furthermore, points sitting in a specific airline or hotel loyalty account are inherently less flexible than those same points sitting in a transferable points account because you can only use them through that specific airline program instead of having the option to transfer them to one of 10 or more different loyalty programs than when you have transferable points. 

Additionally, airline and hotel loyalty programs can and will undergo revaluations, which almost always means a devaluation in terms of what you can effectively buy with a given amount of points. It is generally advised not to collect a lot of points within a specific airline or hotel loyalty program because if that program changes its redemptions and effectively raises the points prices on the flights or hotel stays that you can book through them, your points immediately lose value. 

Furthermore, some loyalty programs give advance notice of devaluations whereas others just devalue their programs overnight without notice or warning. So you don't want to transfer tens or hundreds of thousands of valuable transferable points into a loyalty account without an immediate use for them, and then end up getting affected by a future program devaluation. 

Some programs also have expiration limits on points in their loyalty account. So if you don't use your points within a certain time frame after transferring them, you lose them all together. Many loyalty programs have ways that you can extend the lifespan of transfer points but not all do. So you definitely don't want to speculatively transfer points and then lose them altogether by having them expire before you could plan to use for them. 

Finally, you definitely don't want to speculatively transfer points to take advantage of a transfer bonus if doing so would leave you points poor or in your transferable points. If you have, say, 300,000 Amex points total, it can be really tempting to transfer those points to British Airways and see those 300,000 points turn into 390,000 Avios. But if what you really need to book your next trip is access to an airline that BA can't book flights on, those 390,000 Avios aren't going to be very useful. 

I think that these are all very valid reasons for why you should not speculatively transfer points to take advantage of a transfer bonus. But I also don't think that it's an immutable rule of points travel that you should never speculatively transfer points during a transfer bonus. 

In fact, I have oftentimes speculatively transferred points when a great transfer bonus is offered. I'm very seriously considering taking advantage of the current 30% Amex transfer bonus to BA. Additionally, here are the factors that I take into consideration to decide whether or not it makes sense for me to speculatively transfer points during a transfer bonus when I don't have an immediate use for those points in mind. You can use these factors to help you decide whether or not to do the same thing. 

First, you understand that the potential risk of a devaluation in the program where you're transferring points. Again, we don't always get advanced warning when a loyalty program is going to devalue its points. So as long as you know that could happen, and you're willing to take that risk, then I don't personally consider a potential devaluation as a reason enough to not transfer points. 

Second, and this is really two factors. I think it can make sense to speculatively transfer points during a transfer bonus when you're confident that you know how to get high value from points in that particular loyalty program. You're confident that you'll use the points to book travel at some point, ideally in the next year or two. 

I'm considering speculatively transferring points from American Express to British Airways because I am really familiar with the sweet spots within that program as well as the limitations of redeeming points through BA and because I think it's highly likely that I will find some use for those points in the next two years. 

The fourth and fifth factors that I consider or that I think it can make sense to speculatively transfer points to take advantage of a transfer bonus when transferring those points isn't going to leave you points poor and unable to book travel that you already know that you want to take, and when you're fairly confident about your ability to build your points balance back up in that transferable points currency. 

For example, between my and my husband's American Express accounts, we have almost two million membership rewards points right now. So even if we transferred two or 300,000 of those points to BA, it wouldn't wipe out our entire Amex points balance and leave us unable to have enough points to transfer to a different transfer partner or book an upcoming trip. 

I'm also a huge fan of the Air Canada Aeroplan program, but I'm not seriously thinking about speculatively transferring any of our Chase points to Aeroplan because we have a lot fewer Chase points than Amex points, and I tend to hoard Chase points to use for hotel redemptions through Hyatt. It's also much easier for us to earn a lot of American Express points quickly than it is for us to earn a lot of Chase points quickly. So I'm more willing to speculatively transfer Amex points than I am to speculatively transfer Chase points. 

As with many considerations in the world of points, I don't think the question of whether you should speculatively transfer points to take advantage of a transfer bonus has a straight yes or no answer. Rather, I think it's a bit more nuanced. If you understand the risks and benefits of speculative points transfers as well as the scenarios of when it can make sense then you'll be able to make the best decision that works for you. 

So if you're currently sitting on some American Express, Chase, or Capital One points and are wondering whether you should transfer some of those points during the current transfer bonus offers, I hope this episode has been helpful. If you do happen to take advantage of one of these transfer bonuses in the next week or the next month before they expire, and you're able to book a fantastic award flight with your bonus points, please tell me all about it. You can email me at [email protected] or post your points transfer success story on Instagram and tag me @PointMeTo_FirstClass. See you all again next week.

Thank you for joining me for this week's episode of Point Me to First Class. If you want more tips on turning your expenses into travel, visit pointmetofirstclass.com to learn more. See you next week.