(Offers on this page are now expired and are no longer available.)
These are the two most popular general credit card reward programs. They allow you to transfer points directly to many airline and hotel programs of your choice, as well as redeem them for gift cards. They are very popular with frequent and not-so-frequent flyers. The appeal is flexibility and versatility, since with those programs you are not tied to one particular airline alliance or a hotel chain, and you can use them on whatever partner you want when the need arises.

Membership Rewards

Airline Transfer Partners

• One World: British Airways, Iberia, Cathay Pacific (Asia Miles)
• Star: Aeroplan, ANA, Singapore Airlines
• SkyTeam: Delta, Flying Blue, Alitalia, Aeromexico
• Non-alliance: El Al (ridiculously high transfer rates), Hawaiian, Virgin Atlantic, JetBlue, Frontier

Hotel Transfer Partners

• Best Western
• Choice Privileges
• Hilton Honors (1:1.5)
• Jumeirah Hotels & Resorts
• SPG  (3:1)

The program has three levels of membership.

• EXPRESS with credit cards like Blue and Zink that does not allow you to transfer (you can only redeem points for gift cards).
• REGULAR with credit cards like Green, Gold and Corporate that does allow to transfer.
• FIRST with expensive cards like Platinum and Centurion that allows to transfer and offers some additional perks.

The best credit cards for Membership Rewards, which currently offer 50,000-point sign-up bonuses, are Amex Business Gold and Amex Platinum Mercedes Benz, although the later carries a $475 annual fee. This fee, however, is worth every penny due to the perks that come along with the card.

Advantages:

• Bigger number of transfer partners: 15 airlines from all three alliances and 5 hotels.
• Frequent generous transfer bonuses.
• Occasional bonuses for gift-card redemptions like Home Depot.

Disadvantages:

• Not partnered with prime US airlines such as United or AA.
• Not much value in transfers to hotels
• Can’t redeem points for cash.
• Not good redemption rates for travel (better for Amex Platinum subscribers but still less than one cent per dollar).

Ultimate Rewards

Airline Transfer Partners

• One World: British Airways
• Star: United
• SkyTeam: Korean Air
• Non-alliance: Virgin Atlantic, Southwest

Hotel Transfer Partners

• Hyatt
• Marriott
• IHG (Priority Club)
• The Ritz Carlton

Others

• Amtrak 

There are two types of credit cards associated with the program, BASIC like Freedom and Sapphire that don’t allow transfers, and PREIMUM like Sapphire Preferred, Ink Plus and Ink Bold. These premium cards consistently have good sign up bonuses (40K, 50K, and 50K points) and the annual fees are waived for the first year.

Freedom, which doesn’t carry an annual fee, is a great card too, as it has quarterly rotating 5x categories. If you have both Freedom and a Sapphire Preferred, you can transfer your Freedom points to Sapphire (which is a snap) and then to the partner of your choice.

Advantages:

• Can transfer to United.
• Transfers are very easy, quick, and straightforward.
• The ability to transfer to Amtrak can be extremely lucrative.
• Reasonable value with transfers to Hyatt
• Can redeem for cash.
• Great cashback with Ink cards.
• 20% discount on travel redeem through Ultimate Rewards

Disadvantages:

• Smaller number of partners.
• No transfer bonuses ever.

Both programs have numerous sweet spots and perfectly complement one another. If you have to choose, choose both:-).