Transferable points credit cards are the foundation of my points strategy, serving a purpose similar to mutual funds.

Like stocks, some programs go up and down in value, but a diversified portfolio will limit the impact if one program drops in value significantly.

The credit contest

There are four major transferable points programs: American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou and Starwood Preferred Guest.

  • Amex has long been the leader in the space, but over the last several years it’s seen big competition from the others, especially newcomer Citi, which in the last year two years alone has added 12 partners. I like Amex because it routinely runs transfer bonuses (though they seem they have dried up as of late) and allows me to top up my Aeroplan, British Airways and Delta accounts. The hotel options aren’t as lucrative as other programs, though.

  • Chase Ultimate Rewards may not have the most partners, but the 11 transfer options, including United, Hyatt, Southwest and even Amtrak, pack a punch. Also, its Sapphire Preferred card is the king of transferable points cards, earning 2 points per dollar on all travel and dining purchases.

  • Starwood Preferred Guest is a hotel loyalty program that allows you to not only book free nights, but also to transfer to 34 airline programs, such as the super-valuable American and Alaska (the only transferable program to allow those transfers). You can also use points for VIP events, such as tickets to the US Open and private dinners with top chefs, through the Starwood Moments program.

  • Citi ThankYou is the new kid on the block, adding 12 partners (including airlines and Hilton) over the past two years. While its partners aren’t necessarily the most convenient for US travelers (all are foreign, from Air France and KLM’s Flying Blue to Singapore Airline’s KrisFlyer) there are sweet spots. Plus, the earning on the ThankYou Premier card (3 points per dollar on travel; 2 on dining and entertainment; 1 on everything else) and the Prestige card make it a valuable option. 

I recommend mixing and matching based on the airline or hotel programs you want to “top up” and focusing on cards that allow you to earn in the areas where you spend the most. Like with your retirement fund, diversification is key.