When it comes to miles and points, there is a fine line between diversifying and putting too many eggs in one basket. One great thing to stock up on is fixed points, which are redeemable for a statement credit at a fixed rate depending on the issuing institution. Most fixed points are worth 1¢ each, but some are worth more.
So why fixed points?
Sometimes you need to book travel on a specific airline or at a particular hotel and don't have the right points.
Sometimes that airline or hotel wants an absurd amount of points.
Maybe you prefer to use HomeAway or Airbnb for your lodging - two websites that currently have no point currency to be redeemed for travel.
You'd like to get out of paying the pesky fees that come with some award travel
For the first two situations you could use Chase Ultimate Rewards through their shopping portal, and if you have the Chase Sapphire Reserve, your points will be worth 1.5¢ each. However, having a stash of fixed points would allow you to save your Chase points for another trip where they can go further.
For the latter two scenarios, fixed points are the perfect option because they allow you to book your travel first and then pay off your bill using points.
Chase, Amex, and Citi flex points can be used to transfer directly to their partners or through their travel portal. You cannot use them to pay off award ticket fees or deals found on 3rd party travel websites like Expedia.
Still unclear on how fixed points work?
Let's say you've accrued some fixed points via a sign-up bonus and/or credit card spending and are ready to book a trip. I'll provide two examples of how those points can be used.
You'd like to stay at an Airbnb but know that you can't use Chase, Amex or Citi points. You pay for the Airbnb with a fixed points credit card ( I'll list some soon) then log in to your credit card account where you can erase the amount from your statement by the accrued points.
You've booked a flight and you want to upgrade or change the flight date, which has incurred a fee. Using your fixed points card, you log in to your account and use those points to have the charge taken off your bill.
Now you need fixed points. Where to start?
Some examples of fixed points are: Capital One VentureOne Rewards, Bank Of America Travel Rewards, US Bank FlexPerks, Barclays Arrival and Wells Fargo Go Far Rewards.
The majority of fixed points are worth 1¢ each, but US Bank FlexPerks are worth 1.5¢. Bank of America and Wells Fargo increase the value of their points depending on whether you have a checking account with them and how much money may be in it. There are other cards as well; click here for a great breakdown of some of the most popular ones.
You'll have to decide which one works best for you depending on the bonus spending categories, annual fees, and sign-up bonuses. I chose US Bank FlexPerks to start and will most likely add Capital One VentureOne Rewards later on. (I'll add a post soon on why I like those two).
Once you've applied for and received a fixed points card, you'll have to decide how much spend you want to put on it. Personally, I do enough to qualify for the sign-up bonus and not much more. The majority of my spend goes on Chase and Amex flex point cards where I get a higher return on their bonus categories and direct transfer partners. I keep the bonuses from the fixed point card(s) off to the side and therefore typically look for a card with no annual fee or one that waives it for the first year. This way the only yearly fee I pay is for a premium card like the Chase Sapphire Reserve, which comes with valuable perks.
Luckily, a lot of fixed point cards have no annual fee and are therefore free to add to your wallet. So for the times when flex points can't be used, fixed points are a great alternative. It takes time to be approved for a card, meet the minimum spend and receive the sign-up bonus points, so it makes more sense to get the points first and then plan your travel afterward.