Chase Ultimate Rewards Program Review

Last Reviewed: 1/15/2011

The Chase Ultimate rewards program powers several major chase credit cards, including the Chase Freedom credit card, Chase Sapphire, and the Chase Ink Business card. In general, GetDebit has determined that the value of Chase Points earned via the Ultimate Rewards Program is $0.01 per point. However, if you have either the Chase Ink Plus or Chase Sapphire Preferred Credit Card, the value per point increases to $0.0125.  For a solid personal credit card, you can check out our review of the Chase Freedom card with $100 cash-back bonus.

Key Aspects of the Chase Ultimate Rewards Program

Here are some quick bullets summarizing some of the key features of the Chase Ultimate Rewards program:

  • Ultimate Rewards points never expire and there is no limit on the number of points you can earn.
  • Chase points can be redeemed for merchandise, gift cards, cash back, travel (no blackout dates), and special events.
  • You earn double points for every dollar spent when you purchase airfare online using the Chase Ultimate Rewards Travel Tool. You can also reserve hotels and car rentals via the chase booking tool, although you don’t earn double points for these transactions.
  • If you have the Chase Sapphire Preferred or Ink Plus Credit Cards, your points will be worth 25% more when you redeem for travel through Chase Ultimate Rewards.
  • You can also transfer your Ultimate Rewards points to select partners at a 1-to-1 trasnfer rate. Partners include Amtrak, British Airways, Continental Airlines, IHG, and Marriott.
  • If you redeem your Chase Points for cashback, the minimum redemption is 2,000 points for $20 cashback. You can also directly apply this as a statement credit.
  • You can get a $25 gift card for 2,500 points and a $50 gift card for 5,000 points.

We’ll now dig a little deeper on some of the more involved redemption methods, to really zero in on their true value.

Assessing Ultimate Rewards Travel Fares

Before you redeem your hard-earned points for airline tickets using the Chase Ultimate Rewards Travel Tool, you’d probably want to know whether the ticket prices found via that tool are competitive with rates on the open market. GetDebit did some quick spot-checking of various routes on both the Chase tool and also on Kayak.com, and found that flight prices were nearly at parity: sometimes Chase was $1 to $5 or so cheaper, and sometimes Kayak was. Therefore, we’d say that the Ultimate Rewards Travel Tool is a legitimate, market-competitive booking tool. Adam Smith would be proud.

Additionally, because Chase is technically purchasing this ticket on your behalf, you will earn frequent flyer miles for whatever flight you take-a major plus versus obtaining the same ticket via an airline rewards program.

GetDebit Advice: When you Shouldn’t Book with the Ultimate Rewards Tool

However, unless you have either the Sapphire Preferred or Ink Plus Card, which give you a 25% points bonus when purchasing airline tickets, then you are better off simply purchasing the airline ticket for cash and then separately redeeming your Chase Points for cash to offset the purchase. Why? Because when you purchase the airline ticket with Chase, you’ll earn 2 points per dollar spent, equivalent to another 2% discount off of the purchase price of the airline ticket. Allow us to clarify with an example:

  • Case 1: you use your points to purchase a $500 ticket on Chase. Cost: 50,000 points. Total net ticket cost: $500 (since 50K points at $0.01 per point are worth $500).
  • Case 2: you redeem your 50,000 points for $500 in cash. You then turn around and purchase the ticket for $500 using Chase’s Ultimate Rewards Travel Tool, earning an additional 1,000 points (value: $10). Total net ticket cost: $490.

As you can see, you are better off (just by a a tad) by simply redeeming your points for cash and purchasing the ticket.

Should You Take Advantage of the Points Transfer Option?

GetDebit values Continental Airlines miles at around $0.0122 per mile, so if you do make the transfer, you’d seemingly be juicing the value of your points by about 20% or so. However, you don’t earn miles on award tickets. On a cross-country flight in the US, that’s about 6,000 miles you’d be losing out on—typically valued at around $60 or so. In most cases this will probably offset any benefit you would get from miles valued above $0.01, and could leave you in the red for miles valued closer to $0.01. As a final note of caution, you then have to deal with all of the restrictions of redemption through an airline program (and we know that isn’t fun). This logic extends to all of Chase’s transfer partners.

The one use-case where a transfer could make sense is in situations where you need to top-off your miles to earn an award ticket. In this scenario, transferring the needed points could make sense, but otherwise I’d recommend you avoid this option.

Should you Redeem Points for Online Merchandise?

GetDebit did a quick assessment here, and would not recommend that you exchange points for merchandise. We selected the following products more or less randomly from Chase’s “popular products” section, and then compared to prices on Amazon for the same exact items, and here’s what we found:

Comparison of Prices When Redeeming Points for Merchandise on Chase Versus Direct Purchase on Amazon
Product Chase Price Amazon Price Implied Value of Chase Points
Apple Ipod Touch 32gb 4th Gen 35,800 pts (equal to $358) $274.99 $0.0077
The Pacific Blue Ray Disc 10,200 pts (equal to $102) $64.99 $0.0064
Nikon Coolpix S3000 12.0 megapixel camera, plum 13,100 pts (equal to $131) $99.00 $0.0076

As you can see from the table above, redeeming your Chase points for merchandise will reduce the value of your points in the neighborhood of 25-30% (relative to just redeeming points for cash, where they are worth $0.01).. Ouch!

Final Assessment of the Chase Ultimate Rewards Program

While there are a variety of methods for redeeming your points, most are value traps, especially redemptions for merchandise. Since cash back redemptions appear to be your best bet (slightly beating out travel redemptions due to the bonus you get by purchasing the ticket yourself), this means the value of an Ultimate Rewards point is $0.01 on the spot. The only exception to this is if you hold the Chase Sapphire Preferred or Chase Ink Plus Card, in which case the value of Chase Ultimate Points is more like $0.0125.  For a good personal-use Chase card, check out GetDebit’s review of the Chase Freedom card with $100 cash-back bonus.

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