You’ve likely come across the buzz around airline, hotel, and credit card points by now. Perhaps you find it too complicated or believe you must splurge thousands of dollars to earn these rewards. Well, let’s clear those myths right away. Earning points is far from complicated, and we’re here to provide you with a quick introduction on transforming your everyday spending into rewards. It’s a straightforward process that not only brings you one step closer to your well-deserved trip but also elevates the quality of your travel experiences.
Not All Points Are Created Equal
Having points is like having extra cash – a versatile currency that opens doors to various opportunities. And no, we’re not diving into the realm of crypto here. These points can be exchanged for flights, hotel nights, experiences, and even items on Amazon. However, for now, our primary focus will be on the first two: flights and hotels.
Let’s initiate our journey by simplifying the world of points into three easy-to-understand categories:
1) The initial category comprises airline points, also known as miles. This includes points from all major airlines such as American Airlines (AAdvantage miles), United Airlines (MileagePlus miles), JetBlue (TrueBlue points), British Airways (Avios), and all the other airlines, each with its unique miles and points programs. These points are earned as a token of appreciation for your loyalty – choosing to fly with a particular airline over its competitors, they’re the airlines’ way of giving you a virtual high-five.
To start accumulating these airline points, you need to enroll into the respective airline’s reward program and use the assigned number every time you purchase a flight. Depending on the airline, you may earn miles based on your travel distance or on your flight cost. Upon completing the flight, the earned miles will be credited to your account.
Alternatively, you can earn airline points much faster by using the airline credit card, signing up for dining programs (AAdvantage Dining Program, MileagePlus Dining), or shopping through portals like Rakuten, United Airlines MileagePlus Shopping, or American Airlines AAdvantage eShopping, for example. Detailed insights into these methods will be covered in later posts.
2) In the second category, we have hotel points. Here, we include major hotel groups like Hyatt (World of Hyatt), Hilton (Hilton Honors), Marriott (Marriott Bonvoy), Wyndham (Wyndham Rewards), IHG Hotels & Resorts, Choice Privileges, and ALL – Accor Live Limitless. Similar to airline miles, you accrue hotel points as a reward for your loyalty to the brand. You earn hotel points depending on how much you spend at a hotel when booking a stay. To begin with, you’ll need to enroll in the specific reward program and then use your loyalty number when making reservations directly through the hotel’s website. We’ve been suggesting to a few hotels that they swap out those boring member numbers with a secret handshake, it seems our idea hasn’t been implemented yet.
Once you’ve accumulated enough points, you can exchange them for free nights at your preferred hotel, subject to availability. Keep in mind that third-party platforms like Expedia, Hotels.com, Priceline, or Booking.com may offer good deals, however most chain hotels will not give you award points for booking through these platforms.
3) And finally, in the third category, we have credit card rewards programs, which we will refer to as “flex points”. This category serves as the accelerator for earning points for both hotel stays and flights. Credit cards such as Bilt, Chase Sapphire Preferred, Capital One Venture X, Amex Gold, and Citi Premier, among others, will allow you to accumulate points by using your credit card for everyday spending. Each card offers varying points on different categories like dining, traveling, groceries, and – wait for it – rent and HOA payments! Credit cards details will be covered in subsequent posts.
These points are transferable to “travel partners,” specifically, airlines and hotel groups, some of which were mentioned above. We name them flex points because they provide the flexibility of not committing to a single airline or hotel. You can transfer them to the airline or hotel of your choice based on your needs.
These points are like the magical points that can unlock the best deals for your future travels. So, wave your wand—well, credit card—and let the smart spending journey begin!
A Real-Life Example
With the Bilt Mastercard, you earn 3 points for every dollar spent on dining, 2 points for every dollar spent on travel, and uniquely, it’s the only credit card that allows you to earn points on rent or HOA payments – 1 point for every dollar spent on rent, which is often a significant monthly expense.
Therefore, if you pay $3,000 in rent monthly, dine out eight times a month spending $50 each time ($400), and buy $500 worth of groceries, you can earn (3,000 x 1) + (400 x 3) + (500 x 1) = 4,700 points a month, translating to 56,400 points annually, just from your regular expenses.
These points can be exchanged for a roundtrip ticket from New York to Madrid with Iberia and a fancy night at the Hyatt Centric Gran Via Madrid (usually $300 per night) – and you would still have points left!
Reality Check: The Golden Rule of Credit Cards
Okay, let’s have a moment of seriousness (just a tiny one, we promise). The golden rule of credit card adventures: always pay your bills in full each month. Why? Because those rewards might be charming, but trust us, they lose their sparkle when the interest rates join the party. The trick here is not to spend more but to spend smartly on your regular expenses and avoid accumulating debt.
SUBs: The Fast Track to Thousands of Points
Now you know the little big secret on how your co-worker that earns less than you can travel so much. And wait, we’re just scratching the surface on the path to earning these flex points; brace yourself for the revelation about sign-up bonuses (SUBs).
While you might now suddenly crave Subway sandwiches, that wasn’t our intention; these SUBs can satisfy you much more than a sandwich ever could.
When you open a credit card, it often comes with an incentive – a substantial load of points that can literally take you far. However, to earn these points, you usually must meet a minimum spending requirement. Don’t take this lightly; it might range from $1,000 to $8,000 in a 3–8 months period, depending on the card. Please consider whether you can meet that minimum spending requirement within the specified time frame. Again, it’s not worth getting into debt for points. Additionally, please note that some cards have an annual fee, but most of them pay for themselves with the perks you receive. Therefore, if you have significant expenses coming up, such as a family trip, renovations in your house, or other life-changing and expensive events, this is your time to shine! Spend those dollars with joy, knowing that a reward is on the horizon for you.
The Takeaway
To recap what you now know, there are three distinct types of points – airline points, hotel points, and flex points. The key is to accumulate all three, as they collectively unlock plenty of opportunities for free travel. Take a moment to sign up for the rewards programs offered by the airlines and hotels you frequently use (it’s free) to kickstart your journey of earning miles and points.
Now, when it comes to credit cards, we understand it might seem like deciphering a secret code at first, but fear not! We’re here to guide you. We’ve been in your shoes and are thrilled to share our credit card wisdom. We’ll explain which credit card suits your spending habits, offering insights into the best offers, optimal points redemptions, and the latest cards with the best travel perks.
Here is a list along with a link to the reviews of our favorite credit cards that we keep in our wallet:
Final Thoughts
Congratulations! You’ve officially earned your Ph.D. in the School of Jet Lag and Passport Stamps! Now, armed with your knowledge, you’re ready to navigate the exclusive world of points and rewards, transforming your travel wishes into a globetrotting extravaganza!
Explore our other posts; we promise the only turbulence you’ll encounter is in the sky, not in your travel plans. We’re here to guide you through this exciting journey and the only baggage you’ll be carrying is the one you pack, not financial stress.
Cheers to earning more miles and making your wallet happier than a cat with a fresh cardboard box—except this time, you’re the one enjoying the purr-fect perks!
