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What NOT to Do: Redeem Chase Ultimate Rewards for Cash

ByDW
The image shows a close-up view of several U.S. one-dollar bills. The prominent features include the words "United States of America," "In God We Trust," and the large numeral "One." The Great Seal of the United States, featuring an eagle, is also visible. The bills are arranged in a slightly overlapping manner.

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…

The image shows a close-up view of several U.S. one-dollar bills. The prominent bill in the foreground displays the words "United States of America" and "One Dollar," along with the Great Seal of the United States. Other dollar bills are partially visible in the background.

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!

The image is a screenshot of a points summary from a rewards program. It is divided into three sections: 1. **Your Points**: - Available now: 145,539 points - Earning on next statement: 1,238 points - A link to "Review more activity" 2. **Ways to Use Your Points**: - Travel: $2,183.09 (Note: When you redeem points for travel, points are worth 50% more) - Gift Cards: $1,455.39 - Cash Back: $1,455.39 - Amazon.com Shop with Points: Shop at Amazon.com - Transfer to Travel Partners: Transfer your points 3. **Your Activity**: - $300 Annual Travel Credit: $300 received - Keep Earning: - 3 points per $1 on travel and dining - 1 point per $1 on all other purchases - A link to "Review more activity"

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

The image shows a hotel booking page where users can redeem points for a stay. There are two room options listed: 1. Andaz King: - Description: "Drawing upon Japanese tradition, the design of the 50-square-metre guestroom incorporates natural materials and partitions that allow one to customize the..." - Points required: 25,000 Points/Night - Button: "Select" 2. Andaz Twin: - Description: "Drawing upon Japanese tradition, the design of the 50-square-metre guestroom incorporates natural materials and partitions that allow one to customize the..." - Points required: 25,000 Points/Night - Button: "Select" The "Redeem Points" section at the top indicates that redemption starts from 25,000 points. There is also a "Rate Rules" link.

The image shows a hotel booking webpage with different room rate options. The options listed are "Advance Purchase" from $994 USD, "Standard Rate" from $873 USD, "Bed And Breakfast" from $903 USD, and "Double Your Points" from $960 USD. Below these options, there is a section for "Andaz King" with a brief description of the room and a price of $873 USD per night. There is a "Select" button next to the price.
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…

The image shows a "Summary of Charges" for a transaction in United States Dollars. The breakdown is as follows: - Subtotal: $3,489.39 USD - Additional Fees & Taxes: - Consumption Tax: $279.15 USD - Service Charge: $523.41 USD - Tax On Svc Chrg: $41.87 USD - Accommodation Tx: $7.75 USD The total per room is highlighted in red and is $4,341.57 USD. There is a note at the bottom indicating that changes in taxes or fees will affect the total price.

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)!

The image shows a travel booking webpage with a section for searching flights, hotels, cars, and activities on the left side, and a large photo of London on the right side. The top of the page displays a message indicating that the user has 145,539 points worth $2,183.09 towards travel when booked through Ultimate Rewards. The search section includes options for round-trip, one-way, and multi-city flights, as well as fields for entering departure and destination locations, dates, and the number of travelers. There are also checkboxes for non-stop flights only and including flights with multiple airlines. The search button is green and located at the bottom of the search section. The photo of London features a view of the city with notable landmarks such as the London Eye and the Houses of Parliament.
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…

The image shows a screen with the text "How much cash back would you like?" at the top. Below this text, there is a label that reads "Maximum amount." Underneath, there is a display showing a cash back amount of $1,455.39.
That is a fat stack of cash…

The image shows a grid of various gift cards from different retailers and services. Each gift card is displayed with its logo and the range of values it can be purchased for. The gift cards include: 1. Nordstrom Gift Card ($25 - $100) from 2,500 points. 2. Airbnb Gift Card ($25 - $100) from 2,500 points. 3. Uber Gift Card ($25 - $100) from 2,500 points. 4. Amazon.com Gift Card ($25 - $100) from 2,500 points. 5. Starbucks Coffee Gift Card ($5 - $100) from 600 points. 6. Target Gift Card ($25 - $100) from 2,500 points. 7. Darden Restaurants, Inc. Gift Card ($25 - $100) from 2,500 points. 8. The Home Depot Gift Card ($25 - $100) from 2,500 points. 9. Kohl's Gift Card ($25 - $100) from 2,500 points. 10. Lowe's Gift Card ($25 - $100) from 2,500 points. 11. Best Buy Gift Card ($10 - $100) from 1,000 points. 12. Apple iTunes Gift Card ($10 - $100) from 1,000 points.

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!

The image is a section of a credit card statement titled "PAYMENT INFORMATION." It includes the following details: - New Balance: $2,124.06 - Payment Due Date: 05/27/17 - Minimum Payment Due: $25.00 There are two warnings: 1. Late Payment Warning: If the minimum payment is not received by the due date, a late fee of up to $37.00 may be charged. 2. Minimum Payment Warning: Paying only the minimum payment each period will result in more interest and a longer time to pay off the balance. A table is provided with three columns: 1. If you make no additional charges using this card and each month you pay... 2. You will pay off the balance shown on this statement in about... 3. And you will end up paying an estimated total of... The table has two rows: - Only the minimum payment ($76): 11 years, $4,245 - 3 years: $2,721 (Savings=$1,524) At the bottom, there is a note: "If you would like information about credit counseling services, call 1-866-797-2886."
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?

Alt text: A screenshot showing a message about Chase points and their value on Amazon.com. The message states, "Your 145,539 points are currently worth $1,164.31 at Amazon.com." It provides instructions to link a Chase card to an Amazon account to use points at checkout. There are three steps listed: sign into Amazon.com, link your Chase card, and pay with your points at checkout. The Amazon logo is prominently displayed on the right side. A green button at the bottom says "Link at Amazon.com." There is a note at the bottom about the redemption value of points being subject to change.

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

The image shows a simple white line drawing of a paper airplane inside a blue circle.

9 Comments

  1. I’m an avid budget traveller and although I understand that my points technically have more value when used to book travel they don’t give access to the budget options. Why would I spend 4500 points to stay in a 3-star hotel when I can book an incredible airbnb for $25/night. I recently was looking for roundtrip flights from Dublin, Ireland to Naples, Italy, If booked through Chase travel I would spend over 20,000 points on the trip to fly with Aer Lingus, I found the very same flights with RyanAir for $80 roundtrip. I’m honestly looking for a reason to not cash out my points but I cannot find a time to spend them where I won’t end up spending 30-50% more when giving them 1:1 valuation. PLEASE give me a reason to hold onto my points!

    Reply

  2. The comment above is true.

    Chase points are a scam for true budget travelers because the flights they offer don’t include low-cost prices of carriers like Spirit, and the accommodations are also not the most affordable. Quick Google searches reveal this time and again.

    Reply

  3. I also wonder if I should use my card to purchase a airline ticket which will earn me 3x the points value with my reserve card. Then use my points at a 1-1 ratio as credit towards my card balance. Seems as though earning 3x the points then spending 1-1 versus using points to book at 1.5 to 1 value and not earning any more points would be a better strategy? Anybody have any feedback?

    Reply

  4. Accumulated points, whether for cash or other rewards, do not earn interest while they’re sitting in your points balance. I always redeem my points monthly for cash into my high-yield savings account that earns me 2% interest.

    Reply

  5. Well, what if I want to book a hotel room using the chase LHR collection to get $100 hotel credit, free breakfast for 2 , early/late check-in/out and one level upgrade benefits.

    I cant book it using Ultimate reward points. I either have to pay cash or get cash back and use it on LHRC to make it a 1:1 transfer of UR points. Will this justifiable option ?

    Reply

  6. Well, what if I want to book a hotel room using the chase LHR collection to get $100 hotel credit, free breakfast for 2 , early/late check-in/out and one level upgrade benefits.

    I cant book it using Ultimate reward points. I either have to pay cash or get cash back and use it on LHRC to make it a 1:1 transfer of UR points. Will this justifiable option?

    Reply

  7. Also now that no one can travel and who knows how long it will be until anyone can travel “normally” again, cash is looking like a better option right now, especially when money’s tight.

    Reply

  8. i have a glut of UR points which continues to increase much faster than i am able to use. this and that these are unusual times, i will be converting some UR pts cash to throw into investments.

    Reply

  9. Thank you so much for your clear explanations. I had just tried calling Chase to find out why I had to redeem 3750 points for $30 on Amazon. (I had thought it would be an even 3,000). Tried to get answers from 2 different reps, who both kept me on HOLD for a long time and then I got disconnected – so frustrating for such a simple explanation! I really appreciate being able to find this out online.

    Reply

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