What are transferable points?

At a glance#

What makes points transferable#

Bank points are earned through card spending and welcome offers. What sets them apart from a programme currency is the number of exits, not the size of the balance. A programme currency has one exit: its own programme and its partners. Bank points have several, and which one gets used is decided later.

The choice is where their value sits. Somebody collecting today and booking in a year does not need to know today where the trip goes. The price of that choice is an extra decision: at some point a destination has to be chosen, and that decision is final.

Risk is the other difference. While the points sit at the bank, devaluations inside the programmes do not touch the balance. The transfer moves that risk across. From that moment the destination programme’s pricing applies, and it can change the next day, as what happens in a devaluation describes.

So the most important rule for this currency is simple. A transfer is a decision about risk, and treating it as an administrative step is how balances get lost.

The transfer ratio#

What it means#

A transfer ratio states how many programme units come out of one unit of bank points. One to one is common, and anything below reduces the value immediately.

Three figures describe any transfer completely: the ratio, the minimum increment, and the duration. With those three a transfer can be priced before it is made.

A worse ratio is not automatically a bad transfer. What counts is what the redemption produces, and what points are actually worth sets out that calculation. Comparing ratios alone compares intermediate steps; the comparison that matters is the price of the booking expressed in bank points.

Poor ratios turn up most often with hotel programmes. One unit of bank points can become several programme units there, and the number looks large although the value per unit is correspondingly lower.

Minimums and increments#

Transfers usually move in fixed blocks, often thousands, and a tight calculation can end with one block too many. The remainder sits in the destination programme and is stuck there. A small surplus becomes a balance that is not enough for anything.

So the exact requirement gets established before the transfer. One missing point blocks the booking; one extra block ties up value for nothing. Most increment mistakes happen under time pressure, typically just before a promotion expires, when checking is less careful than usual.

The transfer bonus#

A bonus raises the ratio for a limited period. It is a real advantage when the redemption is due anyway, and a danger when it prompts a transfer without a booking in view, because then flexibility is traded for an uplift that is worth nothing later.

A bonus changes nothing about availability either. A better ratio helps little when no award seat exists in the destination programme. It also applies only to the amount moved: transferring the whole balance out of fear of missing a deadline means using the bonus on points you do not yet need.

How such a bonus works, and when it only looks like an advantage, is covered in how a transfer bonus works.

Why timing decides everything#

Book first, transfer second#

Find the award seat, establish the requirement, transfer, book immediately. Those four steps belong together, and together they rarely take more than half an hour. Reversing the sequence leaves a programme currency without a matching booking.

The sequence also protects against devaluations, since changes in the destination programme cannot reach a balance that still sits at the bank. Checking the requirement too late carries its own risk: you find the award seat and cannot pay for it while the transfer is still moving. How such a transfer runs in detail is described in how a points transfer works.

The duration#

Transfers to some programmes take minutes, to others days. With scarce availability that is the difference between a booking and a disappointment.

Between finding a seat and booking it, slow programmes leave several days. The seat can disappear in that window, and that is the most expensive outcome in this process. The typical duration sits in the terms and rarely changes, so it is worth checking before the first transfer. A short list of typical durations per programme is complete after two bookings, and from then on planning becomes a matter of minutes.

Some programmes allow a short hold on an award seat. Where that exists it is the key tool for transfers that do not arrive instantly, as how award availability works describes.

Holding has a cost too#

Waiting carries a different risk: partner lists change, ratios change, and a bank can remove programmes. Such changes come less often than devaluations inside programmes, but they come.

A balance is a claim under conditions, and somebody else sets the conditions. With a concrete plan, wait no longer than necessary. Without one, waiting is a deliberate choice, made in the knowledge that the balance is ageing.

Worked example: two routes to the same trip#

The same booking can be paid through the bank’s travel portal or by transferring into an airline programme.

The transfer costs effort and risk and offers a higher possible value in return. In the portal the value per point is fixed; with a transfer it depends on the redemption, which is why the detour pays only on good redemptions. Without the prospect of a substantially higher value in premium cabins the portal would always be the better choice.

Availability and risk pull in the same direction. The portal sells whatever seat can be bought for cash, so the trip is bookable whenever the flight has seats at all, and nothing can go wrong between search and payment. The transfer route only reaches free award seats, and a slow transfer opens a window in which the seat can vanish while the points are already on their way.

Effort is why many people stay with the portal, and they have a point. A higher value is worth nothing if it never gets realised.

The tie to the bank weighs on both routes. Closing the card can forfeit the balance depending on the programme, and that happens most often after the first year with an annual fee. A balance without a plan is an option with an expiry date whose terms somebody else sets.

When it is not worth transferring#

The detour is not worth taking in these situations:

• Cheap short routes. The value per point usually sits below the fixed portal rate.
• Without free award seats. A transfer without a booking trades flexibility for nothing.
• With very small balances. After the transfer a remainder is left that is enough for nothing.
• Shortly before closing the card. Points without an account can be forfeited.
• When the search eats the gain. Spending hours to find a small improvement means the value has already gone into effort.
• With high carrier charges. An award booking still costs cash in taxes and charges, and with some airlines that share is high enough to remove the advantage of the detour.

What puts a balance at risk#

Three things make transferable points disappear, and none of them is a devaluation in the classic sense.

Closing the card. Many programmes tie the balance to an active account. Transfer or redeem before closing.

Losing a partner. If the destination programme drops out, the balance stays but the planned route is blocked. The points then have to find another exit, and the replacement rarely serves the same trip as well.

A changed ratio. A worse ratio works like a devaluation even though the number on the account stays the same.

Families have one more thing to check. Some programmes allow transfers to relatives and others do not, and with several travellers that decides whether a redemption is reachable.

For assessing a card, the value of the points collected depends on holding the card long term. A card meant to be closed after a year fits badly with a currency tied to the account.

How to run a balance sensibly#

Three rules keep it simple and cost nothing.

One destination per balance. Knowing what the points are meant for makes it obvious whether a promotion fits or is merely loud.

No speculative transfers. Flexibility is the only advantage of this currency, and it can be spent only once. A transfer made without a booking spends it for nothing.

A note on the requirement and the destination programme. Two lines are enough, and they prevent the usual mistakes with minimums and increments.

All the risks to a balance are known before they happen, and a single calendar entry defuses most of them. An annual check is enough, because partner lists and terms rarely change more often. Holding several cards from the same bank usually pools the points, and that pool is the figure that counts for a booking; calculating per card understates the balance regularly.

Transferable points are an option more than a currency in the narrow sense. Their value comes from the choice, and the choice ends with the transfer. Booking first and transferring second uses both the flexibility until the decision and the higher value of a good redemption, and it needs no forecast about future devaluations. The currency rewards patience until the booking and punishes every transfer that comes too early.

The most common mistakes#

• Transferring speculatively. Availability gets checked before any points move, never after.
• Comparing ratios only. The useful figure is the price of the booking in bank points.
• Overlooking minimum increments. An exact requirement avoids a stranded remainder.
• Treating a bonus as a reason. A bonus is worth taking only when the booking is due anyway.
• Underestimating the duration. With slow programmes, a hold on the seat bridges the wait.
• Closing the card and forgetting the balance. Transfer or redeem the points beforehand, since many programmes forfeit them with the account.

Related topics#

• What points are actually worth
• How a points transfer works
• Points or miles
• How award availability works
• What happens in a devaluation
• How a transfer bonus works
• Can my partner and I pool our points?