The world of points and miles can look and feel very overwhelming.  Earning points, redeeming them, trying to book amazing redemptions like you may see on social media – it may just all make you not know where to start.  But let’s take a step back.  You’re here because you want to travel smarter, and that starts with how you view your everyday spend.

Everyday Spend

Month after month, we all have bills and expenses we have to take care of to.  Groceries, dining, streaming services, gas, utilities, kids activities, medical bills, etc.  The cost of basic necessities is higher than ever as of late (how much does that even leave for a travel savings fund?).  And where do points and miles fit in here?

This is where how you pay for those essentials and expenses, is key.  If you’re using a debit card, you aren’t earning anywhere from 2-5x the points for those regular expenses.  You’re earning nothing.  The goal is to use a credit card (or multiple) that will earn you more than 1x back for planned purchases, expenses, and bills (and many times, unplanned expenses).  Depending on what cards you use, you can earn points and/or miles.

First Things First

Ok, but first things first.  Getting into points and miles requires financial discipline.  This means you’re in the habit of paying all your bills on time, no exceptions.  You don’t carry over balances, and you have your spending under control.  You have a budget, aim to stick to it each month, and don’t over spend.

If you aren’t there yet, don’t get started in award travel.  It’ll all still be here when you’re ready, and it’s more important to get the basics down first!

Check out what I call “The Three Pillars of Award Travel.”  If you have these three in check, you’re set for a long-term, sustainable award travel strategy.

How To Earn Points & Miles

Points and miles are earned from credit cards aimed at earning you travel rewards.  These cards can have annual fees ranging anywhere from less than $100, to just under $700.  Now don’t let annual fees scare you, as these cards have multiple perks and benefits, that not only justify, but outweigh those fees.  The words points and miles tend to be used interchangeably; points are earned from bank and co-branded hotel cards, miles are earned from co-branded airline cards, generally speaking.

If smarter travel is your goal, retail store credit cards, cash back cards (for the most part), and debit cards won’t help you earn points and miles towards travel.

So How Does This Actually Work?

Charge your monthly bills and expenses to cards that earn you points and miles.  In sum, this is what we usually do:

1 – Open a new card with an elevated bonus points offer.  It’ll normally be something like, “Earn 60,000 points after spending $4,000 in the first 3 months of account opening.”

2 – Put all your regular, everyday spend on that card.  You can add it to your Apple Wallet and/or Google Pay accounts so if you have a spouse or partner at home, you both have access to the card.  The goal is not to spend more to earn points and miles; it’s to leverage what you are already spending, and have to spend each month, to live.

We have automated expenses split between two cards, and we personally don’t change which cards those are charged to.  For us, that remains a constant.  It’s the money we spend each month on groceries, gas, dining, kids activities, medical expenses that come up, etc – that gets charged to different cards, depending on which card offer’s minimum spend we are working on at that time.

3 – Make sure to meet the minimum spend in the required timeframe.  *Again, only apply for a card knowing you can meet the minimum spend.*

4 – You may have to wait 8-10 weeks or so before points kick in.  Once they do, you can book travel.  The best way to do so?  Transfer points to airline or hotel travel partners and redeem!

5 – Repeat!

Types Of Points

Note that there are two main types of points – flexible/transferrable, and co-branded.

• Co-branded points are ones you earn directly with an airline or hotel’s loyalty program.  For example, The World of Hyatt Credit Card will earn points directly with Hyatt.  I can only use those points to book hotel stays.  The Citi® AAdvantage Business™ World Elite Mastercard earns only American Airline miles that can be used to book flights on the airline.
• Flexible or transferrable points are my favorite because they can be transferred to airline and/or hotel loyalty programs, and redeemed for travel.  For example, my Chase Sapphire Preferred® Credit Card earns me Chase points.  I love transferring these points to World of Hyatt, at a 1:1 ratio, to book free hotel stays.  (Hyatt doesn’t charge taxes or fees on award stays, hence free!)  More often than not, you will get more than 1 cent/point value out of these points.
  • In this category, you can also have fixed value points generally earned from cash back cards from the major banks: Chase, American Express, Capital One, or Citi.  These points have a fixed value of 1 cent/point and can only be used with the bank.

How To Use Points To Book Travel

Transfer Points To Partners: To get the maximum value out of your points, it’s best to transfer them to airline or hotel partners.  This will require flexible points (that aren’t tied to an airline or hotel loyalty program).  For example, you can transfer points earned from the Chase Sapphire Preferred®Card to airline partners such as Flying Blue, Hyatt, Marriott, United, and more.  Note that the name on account or card has to match the name on the loyalty program the points are moving into.  Once points are transferred in, this can’t be undone.  So only transfer points to any loyalty program with a plan or redemption in mind.

Use Points In The Bank Travel Portal: You can use points in the bank’s travel portal.  This won’t get you the maximium value from your points as let’s say, if a flight is costing you $300, you’ll need 30,000 points to cover it.  Where as, if you transferred those points to an airline partner, you could have gotten more value from your points.

Cash Out Your Points: This works as a statement credit.  Again, it will also be worth one cent per point.  While not ideal, you can use this method to help cover train tickets, flights, theme park tickets, excursion tickets, and/or an AirBnB.  This method is definitely helpful in covering those other travel-related costs that can’t always be booked directly in points and miles.  I’ve specifically done this using Capital One Venture Miles to help cover train tickets, flights, and even a hotel stay.

The world of points and miles can feel overwhelming.   Here are some additional tips to take out the ovewhelm, stay organized, and build a sustainable card strategy for years to come:

1 – Get the Travel Freely App.  Any time you get a new card, add it to this FREE app.  It doesn’t require any sensitive information, and will remind you of minimum spend and annual fee deadlines.  You don’t need to remember dates, the app will do it for you!

2 – What about those annual fees?  Remember, for the first year, an annual fee is always worth it as you get a good chunk of points from the bonus points offer.  After the first year, you can assess if you still find value from the card and/or if you’re still using it.  Only after the first year, should you downgrade it to a no-fee option.  It’s always better to keep an account open.  Only cancel the card/close the account if there are no downgrade/no-fee card options available.  This is also known as a product change.  Many of our cards with annual fees give us lounge access to multiple lounge programs, Global Entry/TSA PreCheck credit, anniversary bonus miles each year, travel credits, and more!

3 – What will happen to my credit?  Financial discipline has its rewards.  And one can be heavily discounted travel funded by points and miles.  You’re leveraging multiple cards to earn bonus offers regularly, not because you can’t pay your expenses on time.  Remember, don’t overspend and always pay all your expenses on time, each month – no exceptions!  Your credit score will only go up over time.

 

You can always find all the best travel rewards credit cards here.

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