I wrote a post a little while ago on the basics of travel hacking the cost of airfare. That included the differences between high and low peak, using travel search engines, finding deals, and an introduction to the point system. You can read the full article here if you want to get a basic understanding of those concepts. Today though, I would like to go into much more detail on the points system and how to take advantage of it.
What the point system is:
Travel credit cards come with a rewards system and you can redeem those rewards with travel miles. Overtime, you can accrue enough miles to shave hundreds off the price of your ticket or even get it completely free! You can redeem much more than miles too. You can redeem free hotel stays and rental cars in addition to thousands of other offers. With enough points you can get the best room of your life in a 5 star hotel without paying a dime. How cool is that?
How to earn points:
As I’ll explain later on in this post, each card differs in what they offer. Some offer more miles per dollar spent, while others only offer a little bit.
In the end though, they all keep with the same theme for how you can accrue them. I’ll use a new and impressive card as an example.
When you apply for the Barclaycard Arrival Plus World Elite Mastercard (the longer the name, the better the card. Just kidding!) and spend $3,000 in the first 90 days, you get 40,000 bonus miles/points. That saves you $400 on travel expenses.
Not only that, but every time you spend cash, you gain an additional 2 miles per dollar spent. So if you make a $200 purchase, you will get another 400 miles just for using the card. The miles on the card do not expire and you get 10% miles back to re-use every time you redeem an award. There are also other benefits like no foreign transaction fees.
This is a very impressive card and not all of the cards will be this good and thankfully not cost $3,000 to get the big bonus.
That’s not the only way to earn miles though. You can also accrue a lot of them through flying.
American Airlines is currently the best company to be a member of if you want to do this, since they have yet to dock the amount of points you can earn while flying and it’s not expected that they will for at least another two years.
United Airlines on the other hand, recently cut the amount of points you earn per flight tremendously, to stop people from taking cheap flights just to earn miles towards better, more expensive flights. This docking of points has recently sent the travel industry into a roar and people are not happy about it, but it looks like the verdict is going to stay.
You can also purchase products through companies that your card carrier has a relationship with for more miles. For instance, if you buy something from Best Buy through your account online, you can earn up to 8 times the amount of miles.
There are also a lot of little ways to earn miles through things like surveys, so you don’t have to spend money to earn points. It can be very time consuming though.
Travel cards take good to excellent credit, so if you’re new to credit or need help to build it up, I suggest starting out with a Capital One Secured MasterCard and then moving into the Barclays Rewards MasterCard once you qualify for it, before moving up to one of the bigger travel cards. That’s what I did and it worked really well.
How to spend points (the fun stuff):
Once you get a credit card and you have the online membership account for the company, there is a rewards portal inside. When you access the portal you will see different ways to spend points/miles on merchandise, tickets, or other random things.
The miles that you need to redeem tickets differ with wherever you are going and the company you are with. Some companies require 50,000 or 60,000 travel miles for a one way ticket to Europe and 30,000 or so for South America. While a round trip would be around 110,000 to 120,000 or 60,000 for those places.
The reason why the reward prices are different between companies is because they weigh the travel miles differently. One mile may be worth 1.5 cents to one company and 2 cents to another. So after the math, you can see how those are massive changes in what you can redeem.
Picking the right card:
There are a ton of cards to choose from that have great and not so great benefits to them. I could be here all day long telling you about the different cards. Instead, I’m going to tell you what to aim for so you know the difference between a good card and a bad card.
Aim for a card with a sign-up bonus of 20,000 or more miles and I prefer not having to drop $3,000 on a card in the first 3 months. But after all, I’m in college, so if you do that normally, I say go for it and more power to you! Look up reviews of their reward system and look for them in recent news. You don’t want to accidentally sign up with a company that just backhanded their members like United Airlines did. Lastly, make sure that you are getting at least 1.5 miles/points per dollar spent to maximize your rewards for the least amount of effort.
Check out this link here to see what cards are offered.
Why you should care about points:
This is one of the best ways to easily save money while traveling and it can add up amazingly quick. You don’t have to spend anything extra either. You just use the card on your everyday purchases like you would with any other card and reap the benefits.
If you start today, you can have a free flight to Europe by this time next year and once you get the hang of using these cards, you can have multiple cards at a time and gain more free flights than you know what to do with.
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