What are Transferable Points Programs

Transferable points programs allow customers to earn credit card points when using certain credit cards, and those points can be transferred to any of their participating programs. So instead of just having points with one airline or hotel, you can transfer points to several different ones.

BREAKING DOWN Transferable Points Programs

Transferable points programs offer options for customers, where one program might have four different airlines included. In that case, you could transfer your credit card rewards to any of those four airlines' loyalty programs. Let's assume, for example, you've been a lifelong United Airlines flyer. You decide you want to take a trip to Europe. Unfortunately, using your United miles might not be the cheapest option for you. Luckily you have points with a transferable points program that includes both United Airlines and British Airways. Because flying to Europe with British Airways' partner, American Airlines, is cheaper than United, you've just saved yourself miles for a future trip.

Flexible Transferable Points Program

It's important to know how much flexibility a certain program provides, and how much flexibility you need. For example, American Express may allow you to transfer points to 17 different airlines, while Chase may only offer six different options. Keep in mind, you will most likely end up paying for more flexibility one way or another. You may receive smaller rewards for your purchases from more flexible programs, or you may pay a higher annual fee than if you choose a less flexible one.

Transferable points can be beneficial when a points partner changes its program in a way that reduces the value of the points you have earned. Airlines and hotels have the right to change their rewards programs whenever they choose, which can be detrimental to points holders. Another benefit of transferable points is the ability to take advantage of transfer bonuses. Credit card companies often offer discounts on transferring points to certain partners. For example, a credit card company may offer a 25% discount to rewards members that transfer points to a specific airline during a certain month.

Other Credit Card Factors 

While transferable points are a great benefit for some, it's not the only factor to consider when selecting a credit card. If you fly on the same airline the majority of the time, you may be able to get better rewards through a credit card that is co-branded with that specific airline. Or if you don't travel very often, a card that offers cash back may be a better choice for you.