Near Disaster: Chase Ultimate Rewards And Flying Blue

I needed to take a last-minute business trip to Kiev. Cash fares were hovering over $900 one way for one-stop itineraries, so I started looking for opportunities to use points. When I book my own award travel, I optimize for the most efficient use of points and the stand-out value was 25,000 Ultimate Rewards points for an Air France flight. There was a long layover in Paris, but I really like Paris so the 9 hour layover was fine. It’s enough time to visit the Louvre and enjoy a coffee in a sidewalk cafe.

air france economy class seat

Unlike most airlines, Air France touts their economy class cabin. We’ll see if it lives up to the hype!

Unfortunately, the Flying Blue program is an absolute disaster right now. Air France/KLM just switched the chart from a fixed value redemption chart to variable redemptions (which, based on my analysis, is one of the biggest airline devaluations in history–most awards are up a minimum 30% and some are up 500%). It was a total fluke that the flight I wanted still cost 25,000 points, yielding 3.2 cents per point in value all-in (net of taxes/fees I had to pay out of pocket). This is very good redemption value on a ticket for which I would have paid real money. However, the devaluation comes on top of another negative change, removing the award calendar, which has driven call center volumes through the roof (because the only way to search for availability over a range of dates is to call now). Because of this, it can now take 2 hours to get through to an Air France representative.

Of course, my worst nightmare happened. Rather than posting immediately, after I transferred my Chase points, the points didn’t show up. I called Chase, who said that they transferred the points and it was Flying Blue’s fault. I called Flying Blue, and they said they hadn’t received the points so it was Chase’s fault. Both suggested I just wait. So I waited, and waited, and waited. I called to put the seats on hold so they wouldn’t disappear while I was waiting. Eventually I gave up and went to bed.

The following morning, the points still weren’t there. 4 hours before the flight, they still weren’t, so I called Flying Blue again. Fortunately, the friendly representative in the Mexico-based call center had a solution: “We are aware of this issue so we will advance you the points and your account will have a negative balance. When the points post from Chase, your balance will go back to zero.” She put me on hold, then came back a few minutes later to collect my credit card number. And just like that, I had a ticket to Kiev! I didn’t really believe that I did until I went to check in, and the computer spat out boarding passes.

So, certainly a stressful beginning to a trip, but a happy ending. I have no status with Flying Blue. I have never booked a ticket in their program. They don’t know I write this blog. They just thought on their feet and solved the problem by taking a risk (I could have been lying about transferring the points). And so instead of stranding me, which is totally what I expected, I’m now on the way to Kiev.

Summary

Chase is now reading a new telephone script when you call: “It can take from 1-7 days for your points to post after they are transferred.” After slowing down transfers to Korean Air and now Flying Blue, it appears Chase is trying to make Ultimate Rewards less valuable by making it impossible to redeem them for last-minute flights. This doesn’t appear to be a technical glitch; based on the policy change being communicated by their telephone agents, it seems to be deliberate. Also, there is nothing in writing on Chase’s Web sites to communicate the change, so people are going into this process with no idea that points transfers are no longer instantaneous.

Generally speaking, I like the Chase Ultimate Rewards program better than American Express Membership Rewards. However, the ability to have immediate use of transferred points is key. Award travel inventory is dynamic (a seat that is available now likely won’t be in a couple of days, particularly to a popular destination) and most of the value in keeping your points with a bank program instead of an airline program comes from the immediate ability to transfer and redeem points. There are fewer reasons to collect bank points instead of airline points if you aren’t able to easily redeem them for awards.

Airline points programs are rapidly losing credibility so it would be bad for consumers if banks to go the same direction and make points harder to redeem.

Why You Shouldn’t Get The Chase Sapphire Preferred

I’m very often asked “Which credit card should I get? Should I get the Chase Sapphire Preferred?” This is rarely a surprising question. Bloggers go on and on endlessly about the Chase Sapphire Preferred because it pays them the highest commission. It’s certainly not a bad card, but it isn’t the best one either. And it carries a $95 annual fee. So let’s do a deep dive and see whether it’s a card you should get:

Is this the best card for you? Maybe not.

Is this the best card for you? Maybe not.

Untrustworthy Ultimate Rewards Points

The points you’re earning with the Chase Sapphire Preferred are Ultimate Rewards (UR) points. Who backs them? Chase. What are they worth? Whatever Chase says they are, and they can change the value whenever they want. They are not airline, hotel or rental car points. This can be dangerous; if the bank shuts your account down (and they can do this for essentially any reason or no reason), they can take all of your points and there’s nothing you can do about it. The bank can devalue the points and benefits whenever they want, as other travel programs do. Points are considered a discount, not cash. This actually benefits you for tax purposes, but it’s not a good thing at all when it comes to your rights around devaluation. In short, you don’t have any. There have been multiple cases with different banks shutting down accounts of people who are too good at working the programs.

You can legally count cards in Las Vegas and gain an advantage in blackjack, but the casinos can legally refuse to play with you. Banks play basically the same game with points. My recommendation is never to maintain high balances of bank points, because they could pull the rug out from under you at any time.

Sketchy Sign-Up Bonus

Right now, you can get a 50,000 bonus points for signing up and an additional 5,000 points for adding an authorized user to the card. The catch? You have to spend a whopping $4,000 in the first 3 months of having the card. This used to be easy when you could buy Visa gift cards or Vanilla Reload cards and load them to an American Express Bluebird, which you could then use to pay your credit card bill. However, American Express shut this down last month, and ever since it’s gotten a lot harder. Are you sure you can spend $1,333+ per month on a credit card without buying a bunch of crap you don’t need?

The worst part: If you don’t achieve the spending threshold, you don’t get the bonus. Simple as that. Chase is banking on this.

Pathetic Points Transfers

Chase boasts that you can transfer points at a 1:1 ratio to travel partners. The problem is, most of their partners just aren’t very good. 40% of the transfer partners are hotel programs, and they’re the ones with the least valuable points in the industry. The airline partners aren’t much better (although there can be sweet spots with each one). Redeeming British Airways Avios points often involves paying hefty fuel surcharges and the best awards–on Alaska Airlines–can only be booked over the phone. Korean Air SKYPASS not only has a horrendously expensive award chart, but booking awards is a giant hassle and you can only book tickets for yourself and immediate family members (with extensive documentation requirements), not friends. And after the United award chart devaluation, it’s really only worthwhile to use Mileage Plus points on United–the least reliable airline in America.

It’s not that there aren’t sweet spots in each of these programs that can make them worthwhile. It’s just that airline points devalue faster than Zimbabwe dollars, and hotel points are nearly as bad. And if you want to earn airline points, the benefits tend to be much better with airline affiliate cards (for example, you get companion passes, drink coupons and free checked bags with many airline cards).

Dodgy Discounts

“Get 20% off travel!” claims the headline. Unfortunately, there’s an asterisk, and it’s a big one: you can’t book your travel directly with hotels or airlines. Instead, you have to book through a Chase travel agency portal. And as you may have guessed, this doesn’t give you all of the options, and the prices shown are often higher than you can get booking through other sites. The “20% savings” might actually end up costing you money.

Wrap-up

Should you get the Chase Sapphire Preferred? Sure, if you want to support your favorite travel blogger with a fat commission by using their affiliate link. Otherwise, it’s not the best travel card out there, and it isn’t by a long shot.

Don’t Get Conned By Chase: Read The Fine Print!

I like getting bonus miles to share a good deal with friends, and I don’t like fine print. Chase is offering some of both in their most recent refer-a-friend promo for the Rapid Rewards Visa that you may have signed up for when I offered it in November. Beware: you might not get the miles you expect for signing up your friends if Chase also offers you a referral bonus.

I received an offer in the mail last week offering me 5,000 miles for every person that I refer through June 30th. However, there is a lot of disturbing fine print so I called Chase today to confirm the details of the offer. What I found out was really disturbing and Chase may not honor the referral deal as clearly published. So, if you choose to participate in this program, it’s best to be fully aware of how it might bite you.

Changing Promotions

Chase can change the terms of the promotion at any time. So, although I received a refer-a-friend offer in the mail for up to 10 friends–and they even included 10 tear-off referral cards to share–my promotion was silently cut back! What did Chase do? They pared back the promotion to only allowing 6 referrals instead of 10, and this was done with no prior notification. I would never have known unless I called Chase and they told me that they did this. I would have done the work of selling 4 friends and readers on their card (which, to be clear, is actually a good deal) for no compensation whatsoever.

Calendar Year Can Clobber Your Points

Making matters worse, Chase only awards 50,000 referral points per calendar year. I completed 10 referrals in November and December. However, the points haven’t been credited to my account yet, and won’t be credited until sometime in 2016. Chase measures “calendar year” based on when they credit the points to your account, not based on when the referral was completed. So, if I participate in any referral programs in 2016 at all, I’ll be helping Chase sell credit cards, but I won’t actually get the referral bonus for doing so. If I hadn’t asked, I would have done a lot of work for nothing.

Calling Out Chase

Most travel bloggers won’t ever call out a bank for doing something wrong or questionable. After all, Chase pays good money for referrals, which is why most travel blogs are always going on and on about the Sapphire Preferred card (which, to be honest, just isn’t all that good). I’m not afraid to call out Chase, though–they’ve never paid me a dime. The refer-a-friend program is rife with exclusions and “gotcha” clauses and there’s simply no excuse for it. If Chase takes the referral, they should cough up the miles without any weaseling. After all, referring friends and readers doesn’t stop with them signing up for the card. It’s a lot of work! People come to me about any problems they have with the card, or any questions they have about the Rapid Rewards program in general.

What’s Next?

I still think that the Rapid Rewards Visa offer with 50,000 bonus points is a good deal (vs. their normal 25,000 bonus point offer, which isn’t good). However, the refer-a-friend program just isn’t credible. It’s just too rife with conditions, exclusions, and last-minute changes. If you’re going to participate, I recommend you call Chase every time to confirm the details before you make a referral. And given the amount of time this requires, you might prefer to avoid the program altogether.