What a Transfer Bonus Changes
A transfer bonus changes how many points a seat costs. It doesn't change what the seat is worth. Three bonuses start the month: 80 percent from Chase Ultimate Rewards to IHG One Rewards, 30 percent from Chase to the British Airways, Iberia, and Aer Lingus Avios programs, and, by reports, 20 percent from Capital One to Flying Blue. The percentages say little until you divide, and the 80 percent needs it most.
The division
A bonus of b turns each point you move into 1 + b points at the other end. Two numbers follow. The first is how many points a fixed-price seat costs after the bonus: the old price divided by 1 + b. The second is the destination value at which the bonus only matches what the same bank point does at home: the home value divided by 1 + b. Home is a cash redemption at about 1 cent, or a travel portal at up to 1.5 cents, the range on my yield methodology page.
| Bonus | Points per 1,000 moved | Fewer points for the same seat | A destination point must be worth, to match 1 cent | To match 1.5 cents |
|---|---|---|---|---|
| 20% | 1,200 | 16.7% | 0.83 cents | 1.25 cents |
| 25% | 1,250 | 20.0% | 0.80 cents | 1.20 cents |
| 30% | 1,300 | 23.1% | 0.77 cents | 1.15 cents |
| 80% | 1,800 | 44.4% | 0.56 cents | 0.83 cents |
| 100% | 2,000 | 50.0% | 0.50 cents | 0.75 cents |
Read across the 80 percent row. A seat costs 44.4 percent fewer points, and a destination point has to be worth 0.56 cents for the bonus to match cash, or 0.83 cents to match a 1.5-cent portal redemption.
An 80 percent bonus on a half-cent point
I value an IHG One Rewards point at 0.5 to 0.6 cents. Times 1.8, each Ultimate Rewards point arrives worth 0.90 to 1.08 cents. Against cash at 1 cent, that runs from 10 percent below to 8 percent above. Against 1.5 cents in a portal, it runs 28 to 40 percent below. The largest bonus this month sits on a half-cent currency, and it lands near cash.
That doesn't make a transfer to IHG wrong. The value is my estimate, and others use different numbers, and a night that costs fewer points than usual changes the answer. It means the bonus alone doesn't decide it.
A 25 percent bonus on a 4.88-cent mile
I booked five Upper Class seats to London Heathrow, plus a lap infant. Air France priced the award at 365,500 Flying Blue miles and $1,212.50 in taxes and fees for the five seats. The infant ticket was $315, bought by phone. I moved 292,400 bank points during a 25 percent transfer bonus, which delivered 365,500 miles.
Virgin Atlantic's Upper Class fare for all six travelers on that flight was $19,347.50 the day I booked. Net of the $1,527.50 I paid in cash, that is $17,820.00 of value. Divided by 365,500 miles, it is 4.88 cents a mile. Divided by 292,400 bank points, it is 6.09.
The bonus saved 73,100 points. At a cent each, that is $731. The seats were worth $17,820. Four-fifths of the 6.09 was there before the bonus did anything, which is the whole point of dividing first.
What the bonus can't fix
The first example is a large bonus on a weak redemption. The second is a modest bonus on a strong one. A 100 percent bonus on a point that buys half a cent gets you to 1 cent per bank point, which is what cash pays. A 25 percent bonus on a point that buys 4.88 cents gets you to 6.09. The unit price decides most of the result.
When I would move points without a booking
My default is to move points toward a seat I can name. Transfers generally can't be reversed, and a bonus on points that end up with no seat to buy is a larger balance in the wrong place. The exception is a bonus near 100 percent into a program where points have bought several cents each, such as Flying Blue or JAL, because a large multiplier on a high base is hard to lose. Even then I want the award chart open. The exception doesn't reach a half-cent currency at 80 percent, and the table shows why.
Four checks before you move anything
- Find the seat first. Search the award, note its price in the destination's points, and move only the amount the award needs. A bonus has an end date, and so does award space.
- Check the cash on the other side. A bonus changes points, not cash. JAL's own page says its fuel surcharge applies to JAL Mileage Bank award tickets. For tickets issued November 1 through December 31, it is $381 per person for each segment between North America and Japan on trips that start outside Japan, up from $320 for tickets issued October 16 to 31. JAL revises it every two months.
- Read the bonus terms in your own account. Caps, tiers by transfer size, eligible cards, and end dates sit there, and the base ratio isn't 1:1 at every partner.
- Run the division with your own value. Take the destination point's value, multiply by one plus the bonus, and compare it with what the same bank point does at home. If the result lands below that, the bonus isn't the reason to move.
Limits
This covers the arithmetic of a transfer bonus. It doesn't say any redemption is worth making, and nothing here is a recommendation about any card, program, or number of points. The IHG value is my estimate, and the answer moves with it. I saw the two Chase bonuses on my own Chase account on November 2, and that screen shows no end date. The Capital One bonus is from reports, and I haven't read it on Capital One's page. Terms and end dates sit inside account screens, so confirm yours before acting. The 1-cent and 1.5-cent home values are the ranges on my methodology page, and your own cards may differ. The London figures come from one of my own bookings and the cash fare captured the day I booked. I read JAL's page on November 1. Bonuses, surcharges, and award prices change without notice.
Deciding whether a bonus is worth a transfer?
Chartered Strategy prices the destination point first and applies the bonus second. Private client work is by application.
Apply for Private Client