Is Chase Pay Yourself Back Worth It?
A program that launched to some fanfare, but then was torpedoed into oblivion, is now possibly interesting again? No, this is not because the Chase pay yourself back program has made some clandestine improvements over night. It is because everything else around the Ultimate Rewards universe is sort of slipping away. That got me to thinking, is Chase pay yourself back worth it now more than ever? Should more people be paying attention to this program in light of recent events? Let’s take a look.
What Is Pay Yourself Back
With Chase pay yourself back Ultimate Rewards points may be redeemed for a statement credit on purchases made at select merchants. You can also redeem points at a higher rate towards your annual fee within the 90 days before the redemption request date.
Each point you redeem for a statement credit towards eligible purchases is worth $.0125 (one and a quarter cents) for Sapphire Reserve cardholders. That means that 100 points equals $1.25 in redemption value. For select charities, points are worth $.015 (100 points equals $1.50).
Statement credits will post to the card account within 3 business days of a request to redeem. The credits will appear on the monthly Chase credit card billing statement within 1-2 billing cycles.
Keep in mind that while statement credits will reduce your balance you are still required to make at least your minimum monthly payment.
Ultimate Rewards Have Been Slippin’, Fallin’ & They Can’t Get Up
Bonus points for people that got the DMX reference there. Anyway, not so long ago Chase Ultimate Rewards were the bell of the ball. They were the most coveted points out there, and it wasn’t really close. That is no longer the case though. I bet they have fallen as low as third or fourth place in many people’s mind.
What changed? Chase must have devalued a whole bunch of transfer rates, or they lost some transfer partners – right? Not really. They did lose a couple of valuable partners like a decade ago, but they were still the most valued point out there after that. No, this is because their most used partners have cratered the value of their own currencies, which in turn devalued Ultimate Rewards. Chase has also rested on its laurels for well too long, while the competition has been putting in work. No, Wyndham as your first addition in for-ev-er does not move the needle (Sandlot reference, hey-oo).
Let’s take a look at what has happened to some of their most popular partners:
United Airlines
United has been on the forefront of the race to the bottom for US based airlines. They are only bested by Delta really. Their miles used to be fairly valuable for international travel on their own metal and partner airlines alike. Now you can book their flights, and partner flights, for better prices with other partner airlines most of the time.
The one caveat here would be United cardholders. They have been releasing some pretty good award rates and inventory for cardholders lately. A United Airlines credit cardholder with Ultimate Rewards could still be a solid combination still. You just may want to stay away from the United debit card.
Southwest Airlines
Oh Southwest. Lately, no one has done more to crash their hard earned company image in a short period of time than Southwest Airlines. They have shaken their loyalty program so hard that they cracked their foundation all the way down to bedrock.
Southwest Rapid Rewards never offered the best redemption out there, but it was always good enough. That was especially true when the Rapid Rewards program offered flexibility no one else did. Their competitive advantage was dropped to zero there once covid flexibility came around though.
The points continue to lose value while the on board experience gets more and more expensive. Not a good combination for your Ultimate Rewards points.
Travel Portal
The nice thing about Chase is you had a really solid baseline of 1.5 cents per point if you had a Sapphire Reserve card. That is because you had the Chase Travel portal to fall back on. If nothing else, you could redeem travel through that at 1.5 cents per point. Well, until you couldn’t any more.
They only reduced it down to 1.25 cents per point, like the Sapphire Preferred used to get – right? Right?! Uh, no. They reduced it down to 1 cent per point unless their is a points boost. This seemed like it might be okay when all Edit hotels were 2 cents per point, but they killed that out of nowhere too.
Now we are left unsure what we will get for our points when using Chase Travel. It could be 1 cent per point, 2 cents per point or anything in between. Most of the time it is closer to 1 cent per point though.
World of Hyatt
Who cares about all of that, we still have Hyatt at least. Uh, this is awkward. You do still have Hyatt, for now. Come next month Hyatt is going to look a whole lot less desirable. That is because they are rolling out a supersized award chart that has points ranges that cover two category levels within each category. Not only that, but another great reckoning of the hotel categories is coming next month too. I expect that to stabalize a bit with the semi dynamic award chart rolling out, but I think this year may be known forevermore as the great shuffle.
All of that is to say that the value of Hyatt points will be cut off at the knees. They were already making the slow trek from 2 cents per point down to 1 cent per point, but this accelerates things in a major way. I would bet that the upcoming changes drop Hyatt points to around 1.25 cents per point on average. There will still be some outsized value, but I bet 1.25 cents is where most things settle.
Chase Pay Yourself Back Is Looking Better & Better
You could say Chase pay yourself back is getting the advantage of some 2AM beer goggles here. I mean, it isn’t like pay yourself back improved anything, it is just everything else continues to crumble at a faster rate. If it was still at the original 1.5 cents per point level for Sapphire Reserve cardholders it started with, this wouldn’t even be a discussion.
It isn’t though, it is at 1.25 cents per point for select categories. The categories can be great some quarters, and a real bummer in others. It all depends on where you spending habits are. Maybe you drive a lot and spend a ton on gas, but eat out mostly and don’t grocery shop much. That would mean the recent change from gas to grocery is a kick in the junk for you.
However, when it does line up it can be a viable redemption option. Cash is king after all! I think it will start to look better and better (at 2AM) as Ultimate Rewards partners continue to devalue their program.
What Kind Of Redemption Beats Pay Yourself Back
You may be thinking that beating 1.25 cents per point isn’t too difficult, even with Rome burning around you. There is no doubt you will be able to find that value in the programs listed above at times. All of the other Ultimate Rewards programs (hi Aeroplan) will have some great redemptions at times too.
What if it becomes harder and harder over the next year though? And, what if you are earning at a rate that is better than you can burn your points at a better than 1.25 cents per point rate? That is where Chase pay yourself back could be an option for you at times.
Pay Yourself Back Could Be Worth More Than 1.25 Cents
The cut off point isn’t really 1.25 cents per point though. That is the value that you get for your points when paying yourself back, but it doesn’t take into account what you can earn with that cash. Let’s say you pay yourself back over here to book travel over there. Now you are earning points with your card on the payment, plus points from the loyalty program from the cash booking.
Let’s say you earn 4x from your Sapphire Reserve for the flight / hotel booking. Then, let’s say you get another 5x from the flight or hotel loyalty program. You would earn more from hotel programs, but their points are worth less, so we are averaging this out a bit. Now, let’s say you get 1.25 cents per point for that 9x. That would bring you an additional 11.25% in return from the cash booking. Adding that to the 1.25 cents per point gives you a new break even valuation of 1.39 cents. That makes things a bit more intriguing.
Is Chase Pay Yourself Back Worth It?
Whether or not Chase pay yourself back is worth it depends on your booking patterns. I don’t think pay yourself back is a flyover program like it may have been for some a few years back when it dropped to 1.25 cents per point though. I think everything else is starting to beat it on a race to the bottom within the Ultimate Rewards portfolio. That is before you even really consider the pay yourself back value in terms of booking travel, which is closer to 1.4 cents per point. I haven’t even mentioned the greater flexibility that booking cash travel brings in terms of time and routing choices either.
It is something to kick around none-the-less. Let me know if you think Chase pay yourself back is worth it down below, or over in the MTM Facebook Group.
If Chase is rotten though, what’s better? Not a challenge, a genuine question.
A couple things we must acknowledge about Chase are that 1) it has adopted lifetime language for SUBs and 2) the Ink gravy train has come to an end. No more is there an endless supply of UR points. The game at Chase is now about co-branded cards.
The needs of hobbyists can be divided into transferable points and cash back.
*** For the broader hobbyist community ***, Chase’s stable of transfer partners is objectively weak. Bilt and Citi have the strongest dance cards. Among other airlines, Bilt has Alaska and JAL and Citi has AA. Combined, they have the strongest hotel representation. Also, Bilt has Hyatt, can earn 2X on everyday spending, and can act as a conduit for Rakuten points. When all of this unfolded, it wasn’t a shoe that everyone heard drop, it was the sound of the hangman pulling the pin. And, while Wells is still building out its transfer partners, the Autograph Journey’s 5/4/3 earn rates are hard to ignore. In terms of airlines, the only thing Chase has on Wells are Southwest and United.
As for cash back, consider this. In Mark’s example, he earns 4X on flights and hotels then applies the 1.25CPP for a 5% reward rate. That’s coming from the CSR, which also comes with its coupon book hassle. The WF Autograph Journey earns 5X on hotels and 4X on airfare and those points can be directly reduced to cash for 5% and 4% reward rates respectively. Without the coupon book hassle. Sure, get the CSR’s SUB. But, for the broader hobbyist community, it’s hard to see the CSR as a keeper.
Lastly, look at the Rove Miles travel booking platform, which affords loyalty program credit (and benefits) on flights and hotel stays. Rove Miles has a very attractive set of transfer partners, including Lufthansa (which no one else has). Rove Miles can also be redeemed on its own travel portal for virtually any flight or hotel booking and typically at 1.5CPP.
I think Bilt points are the most valuable out there right now, but earning is limited etc. I think Citi is interesting with AA (Choice transfer rate dropping hurts them a bit though) and has a great earning categories for their cards, and they still come at reasonable annual fees for many of them. Amex has the most cards, largest bonuses, and tons of other perks of the programs. I think those are the 3 many people would put above Chase right now.
Mark where have you been?! Good to see you back, regardless. Well…you have historically hated Chase (& AA), but for us loyalists who do not object to really nice hotel stays, then 2x URs on their travel portal still actually means something.
I don’t hate Chase or AA – you may be thinking of Benjy? For the hotels that are still offering 2 cents per point in the portal it is a good option, but that is limited and pretty niche for an entire transferrable currency portfolio (which is kind of my point).
Get your ish together Chase. Amex stole me from you as a customer.
I think the discussion needs to take a big step backwards. As a whole, the Chase ecosystem has become just plain rotten. Don’t waste time deciding on the side dishes if the steak isn’t worth ordering in the first place.
Agree, especially for economy travelers. Even more so with PYB on co-branded cards.