**I’m Not Trying to Be Alarmist, But Am I the Only One Who Feels We Might Be Reaching a Stage Where Transferable Points Currencies Are Starting to Deteriorate?**
In this article:
– Reasons transferable points might decrease in value
– Elements that could lead to changes in points currencies
– Conclusion
**Reasons Transferable Points Might Decrease in Value**
For individuals aiming to earn travel rewards through credit cards, it usually makes the most sense to accumulate transferable points currencies, which can be easily transferred to various airline and hotel partners. This provides maximum flexibility, as you aren’t locked into a single currency, and it also minimizes exposure to program-specific devaluations.
The transfer ratios for shifting points from transferable points currencies to travel partners differ, as not all rewards currencies hold the same value. The most typical ratio is 1:1, although that isn’t always the case. This disparity arises because credit card companies offer different rates for various points currencies.
Generally, transferable points tend to transfer to travel partners at a ratio of 1:1 or sometimes even more. There are, of course, exceptions, and not all rewards currencies are equal. It appears that many transferable points currencies have aimed to sustain a 1:1 transfer ratio as one of their key selling propositions. However, we are starting to observe a reversal of this trend:
– Recently, we noticed most major transferable points currencies devaluing Emirates Skywards transfer ratios, and Chase Ultimate Rewards discontinued Emirates Skywards as a transfer partner (presumably to maintain a 1:1 ratio with all partners).
– As pointed out by Danny the Deal Guru, effective March 1, 2026, the Amex Membership Rewards to Cathay Pacific Asia Miles transfer ratio will be reduced from 1:1 to 5:4, indicating this isn’t a one-off event limited to a single partner.
Currently, this isn’t a prevalent concern, but I foresee this becoming a more widespread issue, as once this practice is normalized, it is significantly more likely to disseminate. Allow me to elaborate…
**Elements That Could Lead to Changes in Points Currencies**
I lack insider information here, but I fear this may signal the onset of a broader trend, leading to fluctuating transfer ratios with these programs. In my view, this boils down to two key factors.
For starters, we are increasingly witnessing (especially among airline) loyalty programs becoming more adept at monetization. Partner award availability is swiftly becoming less common, as airlines prefer to concentrate exclusively on their own programs and monetize them effectively. For those programs collaborating with transferable points currencies, it appears many might seek increased funding during contract renewals.
Ultimately, if a loyalty program seeks greater compensation from a credit card company, either that additional cost must be absorbed by the credit card company, or it gets passed on to consumers through a less favorable transfer ratio.
Simultaneously, it seems credit card companies are attempting to reduce costs linked to their own points currencies:
– We’ve observed Amex imposing restrictions on its “Pay With Points” feature for its most premium cards, effectively capping the “cash out” value of those rewards for flights.
– We’ve seen Chase eliminate 1.5 cents per point redemptions for almost any travel purchase on its most premium cards.
– With Citi, redeeming points for 1.0 cents each is no longer an option for most of the rewards cards accumulating ThankYou points.
When you combine airline loyalty programs wanting more funding for their transferable points with credit card companies trying to cut their redemption costs, it certainly seems to me that this might (regrettably) herald the beginning of a more significant trend.
Naturally, that would be disheartening. Meanwhile, we can earn more points from credit cards than ever before, thanks to sign-up bonuses and spending multipliers, so it’s not as if consumers are devoid of options or satisfactory redemption opportunities. Understandably, card issuers may be reluctant to amend their bonus multipliers to essentially recalibrate matters, so the next best approach is simply to reduce the value of each point slightly.
We’ll see how this unfolds, and while I dislike making predictions like this, I wouldn’t be shocked if in a couple of years from now, transfer ratios are quite erratic, with 1:1 no longer being the norm.
**Conclusion**
It certainly appears that transferable points currencies are poised to encounter some cost pressures in the near term. It seems as though airline loyalty programs are seeking increased funds from partners for their points, while credit card companies are also