How I Scored a $800 Hotel Room for Under $400

Hey there Money Saver! Welcome back to another week of How to Save A Buck, where we explore ways of saving money in personal finance, credit cards, and investing!

Hold onto your personal finance hats, folks, because I’m going to show you how getting smart in credit card points can save you money.

Lots of it.

We’ll look at a specific example of how I recently scored a $750+ hotel room in Florida for less than $350.

That’s right. I saved $400 all because I did a little extra homework.

So you don’t have to.

We’re not talking about any hotel room either.

This is a hotel room at the Hyatt Regency Coconut Point near Naples, FL - in high season.

The hotel is a Category 5, which falls in the higher class category for Hyatt.

How much is a night at this place? Well, looking online at Hyatt, the nightly rate for a standard room is an average of $735!

Gulp.

This is the type of room I booked.

But I didn’t pay that amount. I paid nothing.

Well, not technically. I used 23,000 points, and those points were worth $345.

So how did this happen?

The Process

Chase bank is the issuer of my credit card. They give me Chase Ultimate reward points (UR points) when I swipe for purchases.

Hyatt is a transfer partner of Chase. Therefore, I can transfer my earned UR points from Chase to Hyatt (wherein they become Hyatt points) and redeem them for “free” hotel nights.

I could book the hotel directly through the Chase Travel portal. But Chase says the nightly rate is about $825 or almost 55,000 points.

Since Chase values the points for my card at 1.5 cents per point, the equation is:

54,932 x .015 = ~ $823.

Chase is reflecting the proper amount for this room during this time, around $800.

The points transfer 1:1, so 1 UR point at Chase is 1 point at Hyatt.

But here lies the secret…Hyatt is valuing their rooms less than $400 on their own site.

Credit Card Point Arbitrage

So, what does all this mean?

If I transfer the UR points from Chase to Hyatt, I can reserve the room for only 23,000 points. Using the same value that Chase uses, we get the following:

23,000 x .015 = $345.

All I need to do is effect the transfer, and score the room for less than half the amount of points!

Meaning I just saved over $400 for this hotel room, in Florida, during high season.

So what did we learn today?

Unlike a magic trick, valuing points isn't a one-size-fits-all illusion. The real magic lies in transfer partners like airlines and hotels that accept your points as currency.

In the above example using my specific Chase card (the Sapphire Reserve), Chase UR points boast a 1.5 cents per point value when redeemed for travel through their portal.

But after examining the Hyatt website, I realized I could get the exact same reservation for less points, which makes the points MORE valuable. If we take the point amount and divide by the true nightly rate, we get the effective value of my points.

750 / 23,000 = .032 or 3.2 cents per point

So my points were worth 3.2 cents per point for this Hyatt room, not the 1.5 cents per point that Chase valued them at.

This quick transfer made my points more than 2x as valuable.

Take a look at your credit cards. Do they issue points? If so, research online and try to determine if they have an assumed value.

Next, see if your credit card issuer has transfer partners they work with. If so, the value of your points will be much higher than redeeming for gift cards or through your issuer’s own travel portal.

Every point counts, so optimize your journey with smart strategizing!

Now, go forth and conquer the credit card universe. Remember, it's not about hoarding points, it's about transforming them into memories that soar.

Save On,

Chris