A frequent question we get here is about how to use points and miles for a free trip when traveling together. This is a topic that whole blogs are built upon, so we won’t be able to do justice to it in one post. Our goal is to touch on some strategies for the uninitiated.
How Frequent Flyer Programs Started
Frequent flyer programs started out as ways for airlines to reward their best business customers – namely, those who flew multiple times per year for work. The idea was simple – fly the airline for work and earn a free flight that you can use for leisure travel at some point. To some extent, this is still the case – if your job requires you to travel on a regular basis, you are probably accumulating mileage that can pay for a ticket or two to wherever you and your partner want to go.
How They Differ Today – And How That Helps You
What’s different today is that most mileage is earned by customers who don’t travel any further than their normal highway commute to work in the morning. Namely, you earn points and miles as a part of a credit card program. Banks issue points and miles cards by buying massive amounts of points from the airlines. They give them to their customers in the form of sign-up bonuses and to reward customers for using their cards. You accumulate points and then redeem them for travel when you take that trip of a lifetime (or a fun vacation to somewhere warm in the winter).
So, how do you make this work for you? The first thing is to think a bit about where you want to go. For instance, if your dream trip is to Italy, you’ll want to accumulate points in a program that will get you to Italy. Accumulating points on Southwest Airlines, which largely flies to domestic destinations in the United States won’t do that for you.
There are exceptions, but in general, you’ll need to use more points to travel:
- to a further away destination
- during a higher demand period
- with a higher class of service, like Premium Economy, Business or First Class.
How to Earn Points and Miles
There are lots of ways to accumulate points but you’ll want to start by focusing your efforts. In other words, if you have 4,000 United MileagePlus Miles, 3,500 JetBlue TrueBlue Miles, 8,000 AAdvantage Miles on American, and 9,500 Delta SkyMiles you basically don’t have much of anything.
If you concentrated those same miles on one program, you’d have 25,000 miles which might be able to get you one domestic round trip ticket somewhere. There is some nuance to how they work, but you’re not really able to economically transfer miles between programs. So pick a program that best matches up with your travel goals and begin to accumulate as much mileage as you can in that single program.
Cards With Transferrable Points – These are Super Useful
There are, however, two credit card families that are especially valuable because you can transfer miles from the credit card into (but not back from) a variety of programs. This provides a tremendous amount of flexibility and the ability to take advantage of pricing differences and promotions at various airlines.
Chase Ultimate Rewards Cards – at present you can transfer miles from these Chase cards into programs at United, Aer Lingus, British Airways, Air France/KLM, Iberia, JetBlue, Singapore, Southwest, and Virgin Atlantic.
American Express Membership Rewards – at present you can transfer miles from Amex cards with this program into rewards programs at AerLingus, Aeromexico, Air Canada, Air France/KLM, Alitalia, ANA, Avianca, British Airways, Cathay Pacific, Delta, El Al, Emirates, Etihad, Hawaiian, Iberia, JetBlue, Singapore, and Virgin Atlantic.
Extra Costs for These Cards, But Look at Total Value to You
Rewards cards are generally more expensive to carry than non-rewards cards. In fact, you’ll find personal finance gurus who will tell you to skip airline cards in favor of cashback cards instead. Their theory is that you could take the cashback on a lower-cost card and buy your own airfare to go where you want.
It’s not terrible advice, but we routinely use travel cards to redeem for high-value trips that we really wouldn’t be taking if we paid in cash. The value of our redemptions is routinely five to eight times what we would have gotten back on a cashback card. Plus a whole lot of travel-related perks that make our trips that much nicer along the way.
If you plan to pursue this to get free tickets, expect to pay an annual fee on the card. Many of these cards will include a bonus mileage offer if you apply and are approved – this might range anywhere from 15,000 points on the low end to 150,000 or more on various cards at different times of the year. This signing bonus mileage may be tied to spending a certain amount on their card within a period of time after you get it – e.g. spend $4,000 on the card within the first three months you have it in order to get the bonus mileage.
Pitfalls
Now before you go applying and racking up charges to earn free airfare, be aware that credit card companies make money from you in three primary ways – the annual fee you pay to have the card, each charge you make with their card, and the interest you pay if you carry a balance on their cards.
Using cards to earn points only works out for you if you don’t carry a balance. Let me repeat that, using rewards cards to earn mileage or points only works if you don’t carry a revolving balance. If you do, the interest you pay (compared with a lower interest/lower fee card) will cause you to pay more in interest than the cost of whatever airline tickets you’re getting for “free.”
In a similar vein, if you start buying all kinds of stuff you don’t need just because you’re earning miles on the purchase, that doesn’t make good financial sense either.
What Does It All Mean for Us?
Bottom line, if you can discipline yourself to pay your charges off each month and only spend on things you’d be buying anyway, you’ll have a reliable mechanism to accumulate mileage toward the trip you’re dreaming about. If not, skip the cards and pay for your airfare out of pocket because you’ll be further ahead.
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