17 May What NOT to Do: Redeem Chase Ultimate Rewards for Cash

I know, I know… cash is king. While it may be applicable to certain business or investment decisions, it DOES NOT apply to the world of points and miles! I recently witnessed a friend (who will remain nameless to preserve his/her identity/reputation) redeem Chase Ultimate Rewards points for cash back… to then “offset” a 2-night hotel stay… I kid you not…

Point and mile collectors know to ignore cash, and focus on value. My friend did not have this same inclination, so today we are going to help him/her and any other out there focus on Chase Ultimate Reward redemption value!

A Chase Ultimate Reward Redemption Value Comparison:

Chase Ultimate Rewards points are some of the most valuable and flexible points on the market, mostly due to their flexibility! Don’t be fooled! While that flexibility may include redeeming for cash, it should not be your first, or second thought – let’s check out a quick redemption value comparison to illustrate!

Transfer to Travel Partner – Hyatt: 100,000 Chase Ultimate Rewards for 4 Nights at the Andaz Tokyo Toranomon Hills

25k points per night, compared to a nightly rate of $873!

Ya… $873! And that is before taxes and fees! Here is the actual estimate for the 4 night stay…

That is over $4,000 in “value” for 100,000 Chase Ultimate Rewards points, meaning a redemption rate of over 4 cents per point! Now, critics of “point valuations” will argue that I would have never stayed at the Andaz at over $800 per night, and therefore the redemption is not really worth $4,000.

Those critics would be correct! I will NEVER pay that much per night.

So, while I agree the 4 cent per point value may be a stretch, the redemption did result in 4 free nights in a luxury hotel in a pricey Tokyo during the ever popular sakura (cherry blossom) season, and that is pretty dang impressive! Let’s be conservative here and peg the value of this redemption at 2 cents per point.

Redemption Value: Over 2 cents per point!

Redeem through Chase Ultimate Rewards Travel Portal:

For those of you that are unfamiliar, the Chase Ultimate Rewards Portal allows you to book travel using points based on the actual price of travel. Once you have selected your travel (flights/hotel/rental cars) you can then redeem Chase Ultimate Reward points at the standard rate of 1.25 cents per point (for Sapphire Preferred, Chase Ink Preferred, and Chase Ink Plus cardholders), or if you have the Chase Sapphire Reserve you can redeem Chase  at a standard rate of 1.5 cents per point (rather than the CSP rate of .0125)!

As a Reserve cardholder, I can redeem my points through the Travel Portal at 1.5 cent per point!

While redemptions at 1.25 and 1.5 cents per point are significantly less than some potential redemptions with Chase Travel Partners (see above), they still provide an “Ok” value and are great for those that value flexibility and/or redemption on non-Chase Travel Partners (like Delta and American Airlines)!

Redemption Value: 1.25 – 1.5 cents per point

Liquidate – Convert Points to Cash and/or Gift Cards:

Blah, people. Just BLAH, BLAH, BLAH! Why be a cardholder of a Chase Ultimate Rewards earning card if you are just going to piss away at least 20-33% of the point value!

I love cash and I love gift cards, and the offers are tempting…

That is a fat stack of cash…

But snap out of it!

This is NOT a good redemption, despite how much you love your Starbucks Mocha Latte!

Redemption Value: 1.00 cent per point… NO GOOD, friends!

The One and Only Reason to Redeem for Cash:

If you are carrying a balance and paying interest fees!

Check out that estimated total of $4,245 over 11 years if I paid only the minimum payment and carried the balance!

This is very important. The points and miles that you earn will not be worth it if you carry a balance on your rewards credit card from month to month. Credit cards are notorious for charging lofty interest rates on credit card balances that are not paid in full each month, and these interest fees typically cost more than the worth of the miles you earned. Don’t change your spending habits in the name of points and miles! You can change the way you pay for things but don’t spend more than you would if you were using the wad of cash that used to fill your wallet.

Is this your first time considering this? Head to the Starter Guide for more into tips!

Worst and Last – Redeem on Amazon…

There is only one thing worse than redeeming Chase Ultimate Reward points for cash back… Amazon! I’m a loud and proud Amazon Prime member, but why would you ever do this?

If you are considering this redemption, you are dead to me…

Redemption Value: 0.8 cents per point

Final Thought

Please, oh please! DO NOT redeem your ever-so-valuable Chase Ultimate Rewards for cash back, gift cards, or through Amazon.

Seriously… if I find out that you redeemed Chase Ultimate Reward points during your Amazon purchase of laundry detergent and a phone charger for your car, I will absolutely LOSE IT! And de-friend you! And if we aren’t friends, I will become friends with you, only to subsequently de-friend you, citing your shi**y Ultimate Reward point redemption as the reason…

Hopefully I have made myself clear here and you will think twice before making a terrible point redemption in the near or distant future!

Happy Travels!

DW

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