Let's talk about the Hyatt signup bonus change

As I first saw on Wednesday afternoon via Charles Barkowski's Running With Miles, but which you can now read about everywhere fine affiliate links are sold, starting June 29, 2017, the Chase Hyatt credit card will apparently come with a signup bonus not of 2 free nights at any Hyatt in the world, but rather 40,000 World of Hyatt bonus points.

This is being treated in most corners of the blogosphere as a simple question of whether 40,000 World of Hyatt points are worth "more" or "less" than 2 free nights, which leads to the simple answer that the new signup bonus is worth "less" if you were planning to redeem your 2 free nights at properties that cost more than 20,000 points per nights (category 6 and 7 World of Hyatt properties), and they're worth "more" if you were planning to redeem your 2 free nights at properties that cost 20,000 or fewer points per night (since you would have points left over).

That's fine, as far as it goes. What this changeover does give me the occasion to mention is my general preference for points over free night certificates. I already have a Hyatt credit card, but for people considering whether to apply before or after the changeover, here's my logic.

There are three possible situations in which you might redeem Hyatt free night certificates, good at any Hyatt in the world:

• A stay in a city with only a category 6 or 7 property. If you're flying into Milan for two nights, you can redeem your two free night certificates for two nights at the Park Hyatt Milan, which retail for hilariously large sums, and are worth $300 per night in transferred Ultimate Rewards points. Here, your two free night certificates are worth $600, the value of the Ultimate Rewards points you don't have to transfer to World of Hyatt. This is a straightforward savings of $200 compared to the 40,000 World of Hyatt points available under the new offer. The same logic applies to Hyatt's luxury resort in the Maldives. If you're going anyway, you should pay less, rather than more, for your stay.
• A stay in a city with properties in categories 6, 7 and below. Take a destination like Paris, home of the notorious Park Hyatt Paris-Vendome, a category 7 property. Paris is also the home of, a few blocks away, the Hôtel du Louvre-Paris, a category 5 property. If you are staying for exactly two nights, then you are perfectly justified in preferring two nights at the category 7 property over the same two nights at a category 5 property. But what happens on the third night? The Park Hyatt Paris-Vendome costs an additional 30,000 World of Hyatt points, while the Hôtel du Louvre costs just 20,000 additional points. On longer stays, choosing to redeem your free night certificates for "maximum value" costs an additional 10,000 points per night, unless you're interested in moving between hotels during your stay.
• A stay in a city with properties only in categories 1-4. Here the advantage of the 40,000-point signup offer is obvious: in categories 1-4, 40,000 points go further than 2 free night certificates do. Seattle is an example of a city with a slew of downtown Hyatt properties, all of which cost less than 20,000 points per night. If that's where your next trip is planned, you'll be better off with the new signup bonus rather than sitting on free night certificates waiting for the "perfect" high-value redemption.

I don't have anything against luxury travel, if that's what you're interested in, and the current two-free-night offer is worth up to 20,000 more World of Hyatt points than the upcoming 40,000-point offer for travel to the most expensive Hyatt properties.

But it's also worth up to 30,000 points less, if you tend to redeem your Hyatt points at category 1 properties that cost just 5,000 points per night.

If you trade 8 nights at a category 1 property for 8 nights at a category 7 property (with two nights free), you'll find yourself spending 180,000 World of Hyatt points or tens of thousands of dollars in cash.

Call that an extreme example if you like, but I've always found spending money is damned strange way to save money.