The Hidden Cost of Redeeming Ultimate Reward Points for Travel Through Chase

I love Chase Ultimate Rewards points. In the past 12 months, I’ve redeemed 813,564 points from my Ink Business Preferred card alone. I love these points, but we must set the record straight on their value.

Here’s the issue.

We know Chase points are worth 1 cent each when redeemed for cash or statement credit. We also know that you can earn much more than that with transfer partners. But what about redeeming points for travel through Chase?

With some Chase cards, you get a bonus when you redeem these points for travel through Chase. Here’s the breakdown:

The problem is that the true value of these bonuses is not what it may appear to be. The true value of the Sapphire Preferred or Ink Business Preferred bonus is not 25%. The true value of the Sapphire Reserve is not 50%.

So what is the true value?

To answer that question, we must look at how these bonuses get devalued.

You Don’t Earn Points When Redeeming Points for Travel

When you redeem points for travel through Chase, you don’t earn points on the transaction. It may not seem like a big deal, but it is.

Imagine you redeem points on the Chase Sapphire Preferred card for $1,000 in travel through Chase. Given the 25% bonus, it will cost you 80,000 points (80,000 + 25% = 100,000). Had you purchased the same travel with the Preferred card ($1,000), you would have earned 5,000 points (5x). Those points are worth $50 in cash. Because you paid with points, you lose out on this reward.

When you factor in the lost opportunity cost, the 25% bonus shrinks to 18.75%. Here’s how.

Going back to our 80,000 points example, let’s assume we cash those points in rather than redeeming them for travel. The cash value is $800. Now let’s assume we charge the travel to a Chase card that pays 5x. That $1,000 purchase would give us 5,000 points worth $50. Thus, we have two choices:

  • Use the 80,000 points for Travel, giving us a value of 1.25 cents thanks to the 25% bonus or
  • Cash in the 80,000 points for $800, charge the travel, earning another $50 worth of points, giving us a total cash value of 1.0625 cents ($850 / 80,000 points = 1.0625 cents)
  • The difference of 18.75% represents the true value of the 25% bonus.

Travel Booked Through Chase May be More Expensive

You won’t hear about this on the big credit card sites that want to sell you a card. But here it is. Travel prices through portals, including Chase, can be more expensive than booking directly with the travel partner. That’s true for flights. It’s true for hotels.

In some cases, the prices are the same. In some cases, the prices are a bit higher. In some cases, they are a lot higher. And with flights, sometimes you don’t see the same flight options through the portal.

Recently, I was looking at booking a Hampton Inn by Hilton in the Midwest for a weekend. I could get the room through Chase for $129 a night. It was the same price on, but I found the same room directly with Hilton for $126 a night.

Now I know we are only talking $3. I get it. That’s a 2.38% increase. But, when you factor in the 6.25% we lose because points bookings don’t earn rewards, we see the 25% bonus value drop even more.

There have also been other instances where the price difference was significant. According to one person, they found a flight to be 40% more expensive through Chase. Book that trip with points, and you’ve lost more than the net 18.75% bonus you get with the Sapphire Preferred card.

As I said, this isn’t a Chase issue, per se. The other credit card portals have the same issue. It’s important to remember this when booking travel through a portal.

Why I Still Love Chase Credit Cards

At this point, you may be wondering why I still use Chase credit cards. Several reasons.

First, they offer excellent cash back rewards. Earning 5x on travel through Chase (once you check that the prices are the same) is hard to beat. The Ink Premier pays excellent rewards for online advertising for my business. And that’s true even if you redeem the points for cash, as I often do.

And that brings me to the second plus. Chase points are worth 1 cent each when redeemed for cash. That beats the cash value of Amex Membership Rewards (0.6 cents), non-travel redemption of Cap One points (0.5 cents), and some redemptions of Citi ThankYou points (0.5 cents).

Third, I’ve found Chase’s customer service to be excellent. I’ve never had a bad experience talking with Chase in the 10+ years I’ve carried the bank’s cards. The same is true with a business account I had there for many years.


The key here is to understand that the bonuses offered for redeeming points for travel through Chase can be a good deal. However, they are never worth the advertised 25% or 50% because you don’t earn more points on the redemption. And they can be worth a lot less if you don’t comparison shop for the travel.

As one of my favorite shows in the 1980s used to say, “Let’s be careful out there.”


  1. Bob, Have you compared Chase’s cash back card to BOA’s cash back credit card at the Platinum Honors tier which gives a bonus of 75% for each purchase regardless of the nature of the purchase. That’s 2.625 points for each dollar spent. Of course, there is a qualification that must be met to become a Preferred Platinum Honors Client. Is there a comparable Chase card program that you know of? I read your articles regularly and appreciate the information you provide.

    1. I carry BOA’s card with Platinum Honors. It’s one of the best all-purpose credit cards available today. High hurdle to qualify, but if you do, it’s a great card. Chase doesn’t have a comparable card, although it still may make sense to also carry a Chase card for travel.

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