Lesson 101: Fixed vs Flexible Currencies


1. Prepare For Class

2. Lesson 101: Fixed vs Flexible Currencies

3. Lesson 102: Airline Alliances and Partners


This post is the second post in a beginners series to miles and points. If you have not yet completed the prerequisites for class, you should complete them before continuing.

The 100 series of lessons will focus around 6 mileage programs. I had you sign up for all of these in the prerequisites for class:

  1. United MileagePlus
  2. American AAdvantage
  3. Delta SkyMiles
  4. Air Canada Aeroplan
  5. British Airways Executive Club
  6. Air France/KLM FlyingBlue

The three programs you are likely familiar with are United, American, and Delta. You may have already had some of these frequent flyer accounts. Points in any 6 of these programs are called fixed currencies. They are fixed currencies because you do not have the option to transfer them to other loyalty programs. They are worth what a point is in that currency and you do not have the option to transfer them to a more valuable currency.

Banks in the United States offer credit cards that have sign-up bonuses and can earn points in the first 5 currencies I have on the list above.

  1. Chase offers United credit cards.
  2. Citi offers American credit cards.
  3. American Express offers Delta credit cards.
  4. TD Bank offers a Aeroplan credit card.
  5. Chase offers a British Airways credit card.

Chase, Citi, and American Express also offer credit cards that earn you a flexible currency. A flexible currency is one that you can transfer to many different loyalty programs. Unless noted below, each point in these flexible currencies can transfer 1:1 into airline loyalty programs (fixed value currencies).

The flexible currency that Chase has is called Ultimate Rewards. Ultimate Rewards points can transfer to the following airlines on our list:

  1. United MileagePlus
  2. British Airways Executive Club

The flexible currency that Citi offers is called ThankYou Points. ThankYou points can transfer to the following airline on our list:

  1. Air France/KLM FlyingBlue

The flexible currency that American Express offers is called Membership Rewards points. Membership Rewards points can be transferred to the following airlines on our list:

  1. Delta SkyMiles
  2. AirFrance/KLM FlyingBlue
  3. Air Canada Aeroplan
  4. British Airways Executive Club (On 10/1/2015 this ratio changes to 1000 MR points: 800 British Airways points)

Finally, the last flexible currency is not offered by a bank, but by a hotel chain. The hotel chain is Starwood and their flexible currency is called Starwood Preferred Guest points. American Express issues the credit card that can earn this type of currency. These points can transfer to the following on our list (Note: They can transfer to United, but at a horrible ratio, so I will not include it here):

  1. American AAdvantage
  2. Delta SkyMiles
  3. AirFrance/KLM FlyingBlue
  4. Air Canada Aeroplan
  5. British Airways Executive Club

All of these currencies can be transferred to many different airlines. This is what makes them a flexible currency. The value they have changes depending on the airline that you choose to transfer them to. It is generally better to earn points in a flexible currency. Besides the fact that you have the option to choose where you will transfer your points, airline loyalty programs occasionally go through severe devaluations and when this happens you can transfer your flexible currency to a program that has not gone through a devaluation. The one exception to the flexible currency rule is American Airlines. Only SPG points can transfer to American Airlines and SPG points are extremely hard to accumulate. SPG points are the only type of currency I have not begun to actively collect.

Now you know the differences between the different types of currencies!

How do you know which currency you should begin collecting? Stay tuned for the next few lessons and I’ll teach you!



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