The Miles + Points Primer: How to Start Living Your Wildest Travel Dreams
I believe that we make our own reality and we can choose how we want to view it. In travel, that means we are not only capable of going where we want, but also that no matter where we go, we have the opportunity to find the sunny side of every place. While a positive and appreciative attitude goes a long way, leveraging points and miles for travel makes things a whole lot easier. That’s why I want to share my knowledge with you for free and start you down the path to the travel adventure of your dreams!
The first step into the world of miles, points, and other methods of travel arbitrage is the hardest. Most people are vaguely aware of this other world of travel, whereby someone they know has flown business class to Europe for free or stayed in a beautiful hotel totally beyond the reach of their normal everyday life. It seems too good to be true or too complicated to grasp.
Many people stop there, but you have already proved that you are different! By reading this primer, you will quickly learn the basic strategies that will open up this other world of travel. How far you go is entirely up to you, but you’ve just taken the first step forward.
Why You Want Miles and Points
The answer to this question is simple, and yet, it will be a little bit different for each individual:
For me, learning about award travel is a way to accelerate my world travels. Since I like to travel internationally with my wife, I recognized that flights abroad were the single biggest expense (read: obstacle) in our vacation plans, so using airline miles to cover flights would more than double our resources for international travel.
For others, award travel might be about staying at the finest hotels (even the ones in town). A night away at a luxurious hotel might be the ultimate dream for a couple with young children. Money need not stand in the way if you have a good award earning and redemption strategy!
Finally, miles and points might just be about reducing the financial burden of a trip. Vacationing is supposed to be relaxing and fun, but when the bill hits (or even the anticipation of) it can be a real buzzkill. Since we’re trying to find the sunny side of every experience, it makes sense to avoid scenarios that make that goal more difficult. Award travel has the potential to remove some of the stress of travel and that potential is hugely valuable.
How To Accumulate Miles and Points
Traditionally-speaking, miles and points are earned by signing up for rewards programs and then flying or staying with that particular company. However, today there are numerous (and better) other options for building a miles and points balance.
Credit Card Sign-Up Bonuses: This is the absolute fastest way to accumulate rewards currencies; if you do it right, the miles and points come very cheaply. It is not unusual for banks to offer bonuses of 50,000+ for cards that have the first year’s annual fee waived and require normal amounts of spending.
Credit Card Spending & Category Bonuses: Spending money on a rewards program card is another way to earn from credit cards. Most cards offer 1 point per dollar spent. Certain cards offer 2x-5x the points on spend categories such as: groceries, office supplies, gas, dining, etc.
Online Shopping Portals: Most award programs have their own shopping portals, where you can click through their links to receive bonus miles or points on purchases you would have made anyway. Need to buy flowers for mother’s day? You’ll get the same price as you would without the portal, but in addition you’ll typically earn 20-30 points per dollar spent!
Most everything you need or want to buy can be bought with a bonus.
Car Rentals & Discount Hotel Websites: Most car rental companies offer the ability to earn frequent flyer miles or hotel points instead of their program’s currency. Also, some hotel websites will pay you a bonus of up to 5,000 miles to book a stay through their site instead of directly through the hotel. Just select the program you want to earn to and enter your account number.
How to Use Miles and Points
How you utilize your miles and points is equally important to how you earn them. Once accumulated, you’ll want to redeem your points in ways that help you achieve your travel goals.
Frequent-flyer Miles – This currency is about getting you to your destination, but not all mileage programs are equal. If you have multiple currencies to choose from, compare the cost in miles between them. Here are a few helpful guidelines:
- Aim for redemptions at 1.5-3 cents-per-mile in value (or more) versus booking retail
- Be as flexible as you can about dates, times, and destinations
- Try to avoid fuel surcharges, which often make award flights almost as expensive as buying the ticket retail
- Redeem at the “saver” level, which usually costs half as much as the “standard” redemption level
- Call the airline for booking to reveal more award availability compared to booking online
- Consult a “cheapest miles to” guide, such as this one from travelisfree.com
Hotel Points – These points can cut down on the cost of accommodations (normally our second-biggest expense) or provide a luxury experience. Most hotel programs operate a “tier system,” where hotels cost the amount of points associated with the tier or category in which they are placed.
While not as valuable as airline miles on a “cents-per-point” basis, hotel points are a great complimentary tool for reducing your overall expenses. Here are some tips for maximizing them:
- Aim for redemptions at 0.5 cents-per-point (or more) versus booking retail
- The best deals are usually found at the very top or bottom tiers of a hotel company’s award chart
- Take advantage of “stay four nights, get the fifth free” redemption bonuses
- Keep an eye out for rewards promotions through your rewards account
Bank Points – Most major credit card issuers have their own currency, such as Chase Ultimate Rewards or American Express Membership Rewards. These points are worth one cent-per-point when redeemed for most things, but these banks also have airline and hotel transfer partners. This makes these points the most flexible of the three main types and an important part of maintaining a balanced miles and points strategy. Here are some tips for bank rewards currencies:
- The best cents-per-point redemption is always transferring to an airline partner, but don’t transfer until you’re ready to redeem
- If you are already “airline mile rich,” try to find a hotel partner that transfers at a favorable ratio (i.e. 2:1 hotel points per bank point)
- Sometimes it’s best to take cash back at one cent per point if you don’t have need of miles or points
- Transferring bank points is a great way to top up a mileage or points account that is a bit short of a particular redemption
Best Practices for Award Travel
Protect Your Credit – Earning points and miles the fast way typically involves leveraging your credit score by signing up for credit cards. Despite what many people think, doing so will actually raise your credit score over time, but it’s important that you follow these principles:
- Take a level-headed approach to credit card sign-ups
- Don’t spend more and always make full, on-time payments
- Consistently monitor your credit score
Earn and Burn – Hoarding is bad (c’mon, you’ve seen the tv shows). Miles and points hoarding is no different! Because travel businesses consistently devalue their program currencies (miles, points, credits) over time, you don’t want to hold onto them too long. Here are some strategies to avoid falling victim to devaluations.
- Earn miles with a particular redemption in mind
- Keep a spreadsheet so you know what you’ve earned
- Follow award travel blogs to keep an eye out for devaluations
- Don’t become obsessed with collecting points and miles (they are just a means to an end)
Find the Redemption Sweet-Spot – Every rewards program has its good and bad redemption options (most are the latter). In order to make the most of your work in earning miles and points, do yourself the favor of learning the sweet-spots for redeeming them.
- Study the program redemption options
- Read up on award travel blogs about the best redemption strategies
- Consider an award booking service to maximize your value while saving you the hassl