Miles and Points 101: A Beginner’s Guide to Maximizing Travel Rewards
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - The Basics - Credit Cards, Points, Miles
Earning and redeeming miles and points from credit cards, airline loyalty programs, and hotel rewards can be an incredibly powerful way to travel more while spending less. However, for beginners, the world of points and miles can seem complex and confusing. Here’s a quick cheat sheet to get you started:
Credit card points and airline/hotel miles are NOT the same thing. Points are earned through credit card spending and can then be transferred to various airline and hotel loyalty programs. Miles are earned directly through an airline or hotel program.
The best starter credit cards earn transferable points through programs like Chase Ultimate Rewards and American Express Membership Rewards. These points can then be transferred to a wide array of airline and hotel partners. This flexibility is key. Cards tied to just one airline or hotel tend to have less value.
Aim for sign-up bonuses when you open a new card account. This is where the big point hauls happen. For example, the Chase Sapphire Preferred offers 60,000 bonus points after spending $4,000 in the first 3 months. That's worth around $750 in travel! Read the fine print so you meet the minimum spend.
Don’t hoard your points! Many programs expire points after 12-24 months of no account activity. Make sure to use your points regularly for flights, hotels, rental cars, and more. Check your account for exact expiration policies.
When it comes time to use your points and miles, aim to get at least 1-2 cents per point in value. For example, a flight that costs $500 should only "cost" you 50,000 airline miles at most. Run the numbers before transferring points to ensure it's a good deal.
Pay close attention to award charts that outline how many miles are needed for different flights and hotels. Routes to Europe often differ in price from domestic US flights, for example. Planning ahead helps ensure you have enough miles when it matters most.
What else is in this post?
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - The Basics - Credit Cards, Points, Miles
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Choose the Right Credit Cards for Your Needs
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Earn Points and Miles Through Everyday Spending
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Maximize Sign-Up Bonuses
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Transfer Points Between Programs
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Redeem for Free Flights and Hotel Stays
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Use Points for Upgrades and Perks
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Loyalty Programs - Join and Earn Elite Status
- Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Strategies to Earn Points Faster
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Choose the Right Credit Cards for Your Needs
When getting started in the world of points and miles, one of the most important steps is choosing the right credit card for your individual needs and goals. With hundreds of cards on the market offering an array of perks and bonuses, it can get overwhelming fast. How do you decide where to start? Here are a few key tips for choosing the optimal card for you:
First, think about your upcoming travel plans and target airlines or hotel chains where you already have loyalty status or expect to have upcoming paid stays. Cards that earn miles directly with your preferred airline or points with a specific hotel brand can offer outstanding value if you maximize the benefits. For example, the Marriott Bonvoy Boundless Credit Card offers 6x points at Marriott hotels. If you stay at Marriott properties regularly, that adds up fast.
Next, consider your normal spending categories outside of travel. Aim for a card that rewards your biggest expenses. If you spend heavily at grocery stores, the Amex Blue Cash Preferred offers 6% back. For dining, the Chase Sapphire Preferred gives 3x points. Picking a card aligned with your habits makes the rewards passive rather than a hassle.
Also, assess your appetite for an annual fee. Cards with annual fees often offer premium perks like airport lounge access, statement credits, and enhanced point-earning rates. However, no-annual-fee cards can still provide solid earnings through sign-up bonuses and base point accruals. Evaluate whether the annual fee is worth it for your situation.
Finally, if you’re new to credit cards in general, opt for a starter card without an annual fee and earn transferable points through programs like Amex MR or Chase UR. You can then redeem these flexible points towards simple cash-back or more valuable travel redemptions. As you get the hang of optimizing card perks over time, you can graduate to more premium cards with annual fees and richer rewards.
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Earn Points and Miles Through Everyday Spending
One of the best ways to rack up points and miles quickly is by earning them through your everyday spending. From groceries to gas to dining out, nearly every purchase you make can contribute towards your next free vacation. The key is using credit cards that offer bonus rewards on common spending categories.
For instance, let’s say you spend around $400 a month on groceries for your family. By using a card like the Amex Blue Cash Preferred that offers 6% back on supermarket purchases (up to $6,000 annually), you’d earn 2,400 Membership Rewards points per year just from buying your usual milk, eggs and bread. That’s nearly enough for a roundtrip domestic flight right there! Similarly, the Chase Freedom Flex gives 5% cashback on a rotating quarterly category that often includes groceries.
Dining out is another prime opportunity to earn accelerated points. Cards such as the Capital One Savor Rewards and the Chase Sapphire Preferred offer 4x and 3x points respectively per $1 spent at restaurants. So that weekly dinner date night can quickly add fuel to your points balance. If you frequently order in via UberEats or Grubhub, those same cards yield 3x-4x on those transactions too.
For commuters, gas station spending is an easy source of extra points. The Amex Blue Cash Preferred grants 3% back at U.S. gas stations, for example. Even daily habits like drinking Starbucks can be turned into rewards, with cards like the Chase Starbucks Rewards Visa giving Stars for all Starbucks purchases.
When it comes to utilities, insurance, internet bills and other recurring expenses, look for cards that offer bonus categories or automatic points. The Wells Fargo Autograph card gives 3x points on cell phone plans, internet and more, while the US Bank Altitude Connect offers 2 points per $1 on streaming services. Set these bills on autopay with your points card.
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Maximize Sign-Up Bonuses
One of the most lucrative ways to quickly accumulate points and miles is through sign-up bonuses that credit card companies offer new applicants. These bonuses effectively give you a huge lump sum of points, often 50,000 or more, just for being approved for a new account and meeting a minimum spend requirement within a set timeframe. Sign-up bonuses can provide enough rewards for multiple free flights or hotel nights, so they should definitely be a key part of your earning strategy.
When applying for a new card, always research and target the highest public offer available at that time. Bonuses fluctuate so you’ll want to lock one in at its peak. For example, the Chase Sapphire Preferred bonus has ranged from 50,000 points up to 100,000 points for a limited time. Monitoring sites like Doctor of Credit allows you to jump on temporarily increased bonuses that could score you tens of thousands of extra points compared to the standard offer.
Be sure to read the fine print on exactly how to earn the bonus. Typically you need to spend a minimum amount, usually $3,000 - $5,000, within the first 3 months of cardmembership. Know that requirement before applying so you can quickly meet that spend via normal purchases or manufactured spending techniques if needed. Also confirm that you are eligible for the bonus if you currently have or previously had the card. Issuers often limit bonuses to once per customer.
Consider applying for multiple cards that each offer a sign-up bonus when you’re pursuing a major redemption like a business class flight. For example, some may apply for both a Chase Sapphire Preferred (60,000 points) and a Chase Ink Business Preferred (100,000 points) within a few months. That results in 160,000 points, providing enough for two roundtrip Economy tickets to Europe.
Always pay your bill on time and in full each month to avoid interest and fees negating the value of your sign-up bonus. And if the card has an annual fee, make sure you’re getting enough ongoing value to justify keeping it beyond the first year. An annual free night certificate or other perks may balance out the fee.
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Transfer Points Between Programs
One remarkably powerful strategy for maximizing your points and miles is to transfer them between various airline and hotel loyalty programs. While each program has its own proprietary currency (United miles, American miles, Hilton points, etc.), many also partner with credit card point systems that provide transferability. For example, both Chase Ultimate Rewards and American Express Membership Rewards allow transfers to multiple airline and hotel partners. This flexibility enables you to move points to wherever they are most useful.
Let’s look at an example. Say you have 50,000 Chase Ultimate Rewards points earned from the sign-up bonus on your Sapphire Preferred. Normally you’d be limited to redeeming these points directly via the Chase travel portal at a fixed value around 1 to 1.5 cents each. However, by transferring them to United MileagePlus instead, you could book a roundtrip flight on United-operated flights to Europe for only 60,000 miles in Economy or 110,000 miles in Business Class. This ends up redeeming your points at a value closer to 2-3 cents each.
The key is identifying transfer partners that offer increased value for your particular redemption goals. Avoid exchanging at poor rates - for instance, Hilton only gives 0.5 cents per point when transferring Chase/Amex points. Consulting award charts and calculating your cents-per-point valuations beforehand ensures you transfer wisely.
Another scenario where transferring points makes sense is topping up loyalty accounts with small deficits. For example, you may be 3,000 United miles short of a specific award ticket. Rather than buying miles from United for hundreds of dollars, you could simply transfer 3,000 Chase UR points over to United to fill the gap at no cost. This provides huge value by securing the award ticket you want.
Similarly, directly-earned airline miles can be transferred to partner airlines in the same alliance to gain access to more award space. For example, British Airways Avios points transfer 1:1 to Iberia's Avios program. If you need oneway flights from the US to Madrid, searching Iberia often reveals more nonstop award seats than British Airways does for the same route. Simply transfer BA points to Iberia to book it.
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Redeem for Free Flights and Hotel Stays
The end goal of accumulating points and miles is to redeem them for free travel! With a healthy points balance, you can book flights, hotels, rental cars, and more while paying little to nothing out of pocket. By understanding award charts and getting the most value per point, your earnings can translate into some truly incredible trips.
One of the best options for flight redemptions is to seek out business class and first class award tickets. While very expensive when paying cash, premium cabin awards are often in reach after just a couple strategic card applications. For example, Torsten frequently flies first and business class to Europe by transferring American Express Membership Rewards points to programs like Air France-KLM Flying Blue. The points cost is remarkably low in comparison to out-of-pocket cash fares.
Don't limit yourself to just domestic redemptions either. Programs like Aeroplan and Avianca LifeMiles offer reasonably priced awards to destinations across Europe, Asia, South America and more. You can plan a round the world itinerary by booking segment by segment using points. It takes some planning but the savings are massive compared to economy cash fares. Always check multiple programs to identify the most cost efficient option.
When it comes to hotels, Torsten utilizes Hilton Honors points to stay free at brands ranging from Hampton Inn to Waldorf Astoria. He maximizes value by predominantly using points on expensive high end properties where room rates are sky high. Compared to lower-tier brands, Torsten estimates getting 5 to 10 times as much value per point when redeeming at luxury hotel chains.
Another approach is to pool points from multiple players for a group trip or special occasion. Torsten and his team bring friends and family together for a blowout annual vacation, all booked free with their combined rewards. This allows them to enjoy stays that would normally be unattainable like multi-bedroom overwater villas in Bora Bora or jungle lodges in Costa Rica.
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Use Points for Upgrades and Perks
While free flights and hotels may be the most obvious way to redeem points and miles, don’t overlook their value for scoring upgrades and exclusive perks. Using your earnings to enhance your experience or access restricted amenities can add an extra layer of luxury to your next trip.
One of the simplest options is to use points for seat upgrades on flights. Most airlines let you pay a points fee to move from economy to premium economy or business class when seats are available. Rates vary based on the airline, route and fare class, but can range from 5,000 points for a domestic economy plus seat up to 50,000+ points for an international business class seat on carriers like British Airways. Even a basic extra legroom economy seat can make a long haul flight far more enjoyable.
Similarly, various hotel chains let you pay additional points to confirm suite upgrades from a standard room. For only about 3,000 - 5,000 extra points per night with programs like World of Hyatt and IHG Rewards, you’re virtually guaranteed a more spacious hotel room with added amenities. Compared to crossing your fingers and hoping for a complimentary upgrade at check-in, paying a small points premium locks it in.
Status in loyalty programs also unlocks elite perks, often for just a marginal points investment. Using American AAdvantage miles to gift Gold status to a family member costs only $150 plus 20,000 miles, yet yields them priority boarding, free bag checked, preferred seats, lounge access and other benefits for an entire year of travel. Transferring points from Amex or Chase makes attaining status affordable.
Similarly, Hilton Honors offers fast track status packages that provide perks ranging from room upgrades to executive lounge access and late checkout. The highest Diamond tier can cost around $600 plus 360,000 Hilton points (transferable from Amex/Chase). While not cheap, it guarantees you’ll be treated like VIP at properties worldwide.
Credit card points can also be a game changer for securing hard-to-get restaurant reservations. Through programs like Chase Dining, Amex Resy and Capital One Entertainment Access, your points balance effectively lets you cut the line at exclusive eateries across the globe. You can ensure a prime time dinner table at hot venues that are booked months in advance. Talk about living the high life.
Keep an eye out for promotions where hotel points can be redeemed for unique experiences too. In the past, Hilton has offered packages like a climb up the Sydney Harbour Bridge, a hot air balloon ride over Napa, or VIP access to major concerts and shows. Marriott has similar experiential offers using their points as well. While not free, they provide privileged access that money can’t easily buy.
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Loyalty Programs - Join and Earn Elite Status
Loyalty programs offered by airlines, hotels, and other travel providers are a prime way to unlock elite status perks and earn points for free trips. By strategically joining the right programs and targeting status each year through regular paid stays and flights, you can elevate every trip to be a VIP experience.
Frequent flyer status with just one airline opens the door tofaster earning, priority services, waived fees, and more. On domestic U.S. airlines, Gold status is a great starter tier providing perks like free checked bags, preferred seating, and bonus miles. American and Delta offer it after flying 25,000 miles or taking 30 flights annually. Higher tiers like Platinum and Executive Platinum require 50,000-75,000 miles but add airport lounge access, premium seat upgrades, and partner elite benefits abroad.
Hotel elite status starts delivering at mid-tier Gold and Platinum levels. Hyatt Discoverist status is earned after just 5 stays or 12 nights annually. Perks include room upgrades, late checkout, premium internet, restaurant/spa discounts, and more. Marriott Gold requires 35 paid nights for breakfast, enhanced internet, better earnings, etc. Top published tier Diamond status takes 50 paid nights.
Some loyalty programs let you shortcut to status via credit cards or points packages. Hilton offers fast track to Gold and Diamond by paying a fee plus 180,000-360,000 points that transfer from Amex/Chase. American AAdvantage offers Gold status for 20,000 miles or $150. This cuts years off the normal tenure required.
When choosing which programs to focus on, assess your travel patterns and target airlines and hotels where you’ll have the highest number of paid nights naturally each year. Trying to earn United status with most of your flights on Delta will be frustrating. Also consider geography – earning American status makes more sense if you mostly fly domestic U.S. over trying to earn Air France status flying to Europe once a year.
Miles and Points 101: A Beginner's Guide to Maximizing Travel Rewards - - Strategies to Earn Points Faster
Earning points and miles rapidly is crucial for unlocking frequent free travel, but how can you speed up the process? While signup bonuses and everyday spending set the foundation, there are creative techniques that can skyrocket your earnings. The key is identifying and maximizing lucrative point opportunities through strategy and planning.
One straightforward approach is targeting shopping portals and bonus categories. Nearly every major points program from Chase to American Airlines operates an online shopping site that provides bonus miles for purchases at hundreds of retailers. By activating the portal before shopping online at brands like Apple, BestBuy, Nike, you can rack up miles quickly through regular spending. Similarly, using a credit card that offers 5x or 10x rewards for certain category bonuses can make everyday purchases far more rewarding.
Building up a small business on the side and using it strategically for bonus spending is another angle. Cards like the Ink Business Preferred offer huge signup bonuses and 3x points on common purchases like internet, phone and shipping. When you have a side gig driving revenue, applying for business cards suddenly unlocks major earnings potential.
Opening new credit cards when temporarily increased signup bonuses are available can score you tens of thousands of extra points annually as well. Sites like Doctor of Credit track when offers are boosted above the standard levels. Applying then locks in limited time bonuses before they disappear again. Being agile and jumping on temporary peak offers pays off.
Referring friends and family to apply for cards you hold is a simple way to gain referral bonuses, often worth up to 10,000-30,000 extra points per approval. Just make sure to only refer responsible applicants who will manage payments dutifully. Spreading referrals across different issuers like Chase, Amex and Citi expands options.
Manufactured spending through methods like gift cards and bank account funding should be approached cautiously, but can enable you to hit elevated signup bonus minimum spends when needed. This should only be considered if you have an extremely firm grasp of the techniques and risks involved. Improper manufactured spending can lead to financial loss and revoked bonuses.