Using Credit Card Points and Miles to Travel Better: Getting Started

By employing some smart strategies, financially responsible (not necessarily affluent) people can travel comfortably and experience the world without derailing their financial goals. Go ahead – celebrate a milestone birthday, enjoy a fabulous honeymoon, or take that impromptu trip with friends. If this sounds good to you, let’s go!

Travel Better Without Spending Tons of Cash

Smart usage of credit card points and other cash-saving strategies can help you travel better by enabling and elevating your travel experiences in ways you never thought possible. Of course, (and no matter what any social media influencer tells you), travel is NOT free. Even when using points and miles for flights and hotels, you still need to pay cash for airfare taxes, ground transportation, food, activities, and incidental expenses. Traveling for pleasure is a luxury no matter how you slice it.

The strategic earning and redemption of points and miles, sometimes called “travel hacking”, is a wonderful modern concept where regular folks like you and me can leverage everyday expenses to travel better. Traveling “better” means something different for everyone. It might mean traveling more often, more luxuriously, or taking a dream trip that you didn’t think was possible on a tight budget. The great news is that all of this is possible!

What does traveling better mean to you?

Upgrade Your Travel

Use credit card points to pay for business-class flights and luxury hotels that would otherwise be out of reach when paying cash (for most of us at least).

Simply having certain credit cards will unlock elevated travel privileges such as airport lounge access, expedited security screening, and status with hotel brands, rental car companies, and casinos. This means that even when you’re flying economy class, you can have access to upgraded experiences. All in the name of easier, more comfortable travel. Yes, please.

Save Your Cash

Use credit card points to pay for flights and hotels and save your cash for other goals. If you’re on a tight budget, travel is still within reach – points can be easily redeemed for economy-class flights and hotel stays. If you have a little more to spend, use the cash you saved on airfare and hotel to travel more frequently than you normally would. Or, use it to improve your travel experiences – treat yourself to adventure activities, upscale restaurants, spa treatments, or longer stays.

In this article, I’ll share specific steps to get started in the points and miles game, learning references, and practical tips to help you make the most of it all.

Debt-Free Origin Story

I’ve dabbled in points and miles since 2015 when my husband and I finally climbed out of credit card debt (phew) and I was approved for a Chase Sapphire Preferred card. The enticing sign-up bonus of 75,000 points seemed like enough to justify the $95 annual fee (waived the first year), so I went for it.

At this time in my life (age 36), the thought of paying money to use a credit card seemed like nonsense. If it weren’t for the sign-up bonus (worth $750 at 1 cent per point), I would not have done it. I fully expected to redeem my bonus and then cancel the card (not a good move, by the way).

Up to this point, we had been dealing with crippling credit card and student loan debt for about 10 years. I could do a whole article on “how” we ended up there, but that doesn’t matter now – I want you to know what’s possible once you’re out of the debt hole. And, that what awaits on the other side is absolutely worth the sacrifice and hard work it takes to get there. Financial freedom is a wonderful thing.

Get Your Financial Life in Shape

I’m not a personal finance expert, but I do have real-world experience in this area. Before applying for your first travel card and diving in, get your financial house in order. I believe there are 3 minimum requirements to responsibly enter into this hobby, even as a casual player:

1. Pay off all credit card and other high-interest debt
2. Get your credit score to 750+
3. Pay your bills in full every month

We won’t dive deep into these points here, but anyone worth listening to in the travel hacking game will tell you the same thing.

If you’re not there yet, that’s okay. Think of yourself as the hero in some adventure movie, boldly and courageously knocking down obstacles to find the treasure. Too much Indiana Jones? The point is that the reward is worth the struggle. Visualize yourself living your wildest travel dreams and use this as motivation to get yourself where you need to be.

And, we’re not just talking about free travel. The day we made our last credit card debt payment, I physically felt my shoulders lighten, and could breathe more deeply. A world of possibilities was now available to us. What a feeling. I highly recommend it.

Different Playing Levels

Many people who dive into the points and miles game treat it as a hobby, learning the details of every program, running award searches in their spare time, and keeping up with all the industry news and program rule changes. This is where I am. Of course, not everyone has the time, energy, or desire to play the game this way. That’s perfectly fine – you can still get tons of value from points and miles by taking a more casual approach. The basics will get you a long way.

Two Player Mode

With a spouse or partner, you can play in two-player mode! This allows you to refer one another for credit cards, earning valuable referral bonuses. You’re also earning points at a faster rate when two people are able to earn sign-up bonuses and contribute to the same points pool (yes, you can share points). Of course, you’re also redeeming for two (or more) people at a higher points cost but the higher earn rate helps to balance this.

Award Booking Services

If you simply don’t have the time or interest to learn the details of this game and want someone to handle it all for you, that’s a solid option, too. There are several highly-regarded services that can help you book flights, find business class award seats, and build complex itineraries entirely on points and miles. This one has great reviews and is reasonably priced.

Knowing the basic strategies and leveraging quality resources will help you make the most of your points, miles, and the time and effort you invest.

Learn, Learn, Learn

All of my knowledge in this area was learned from my own experiences and through a wonderful community of experts and other players that generously share their knowledge (for free). I highly recommend finding trustworthy resources and focusing on a few favorites. While there’s a lot of great content out there, the messaging from multiple sources can become noisy and repetitive. When you’re starting out, keep it simple.

Learning the basic principles and strategies of the points and miles game is essential. Investing some time and effort to understand and practice them will pay off. Things are constantly changing in this area and it’s important to stay informed after your initial introduction. Let the experts help you on your journey.

My Favorite Trusted Resources

There are tons of resources out there in a variety of formats. Here are three of my favorites to get you started:

10X Travel (Web, Facebook, Podcast, Instagram)

This wonderful small company has built an impressive community and truly just wants to see people winning this game. The free course on their website gives you all the information you need to get started. Their wildly popular Facebook group is a great resource for beginners and a way to connect with other people who play this game at all different levels. They also offer points booking services for a reasonable fee.

Geobreeze Travel (Podcast, YouTube, Web, Instagram)

Julia Menez is a points and miles strategist who creates a ton of useful content that is easy to digest. Her podcast features a variety of guests from community experts to everyday people who have had big wins in the points and miles game and share specifics on how they did it, mistakes they made, tools, resources, and more.

Her YouTube channel is full of valuable tips and specific how-tos.

Doctor of Credit (Web)

Constantly updated site with current offers, promotions, and deals focusing on credit cards, banks, and retailers. A solid resource for finding money-saving and money-earning opportunities and building your knowledge of responsible credit usage to make it work for you.

Apply for Your First Travel Card

Get busy earning flexible, transferable points as soon as you can. These are points earned from banks such as Chase, American Express, Capital One, and Citibank. Each earns points in their own “currency” that can be transferred to a specific set of airline and hotel travel partners. This is the meat of travel hacking and where you will get the most bang for your precious points.

If you pay rent, consider the Bilt Rewards card, a relatively new player in this space. Pay your rent with no transaction fees and put that money to work earning valuable points!

Currently, the best starter card for those new to this game is the Chase Sapphire Preferred (personal referral link). This is a premium travel card that, unlike other Chase cards you might have, unlocks the ability to transfer points to select travel partners (airlines, hotels). Without this “key”, your point redemption options will be limited and you won’t be able to maximize their value.

If the thought of an annual fee makes you anxious (I get it), know that the value of the sign-up bonus alone will more than cover the dollars you spend to hold the card for a year. This doesn’t even count the valuable points you’re going to earn through everyday expenses.

This card pairs very well with the Chase Freedom Flex (personal referral link) and Ink Business Cash (personal referral link) cards. When you strategically take advantage of the merchant category multipliers offered by each card, you will earn Ultimate Rewards points at a faster rate and can pool them together for better redemptions.

Earn, Earn, Earn

Credit Card Sign-Up Bonuses

Credit card sign-up bonuses are the fastest way to earn big chunks of flexible points, but the spending requirements and bonus amounts offered by the major banks change frequently. Before you apply for a card, check the current bonus offer and associated minimum spend requirement. Make sure you can meet the minimum spend within the allotted time window to achieve the bonus (typically 3-4 months). If you have a large expense coming up, consider opening a new card and using that purchase to quickly achieve a bonus.

There are important rules and timing strategies that you need to be aware of and operate within as you apply for credit cards. Consult one of your trusted resources for the best ways to approach credit card applications.

Keep in mind that sign-up bonus offers fluctuate over time. Check your trusted resources to see if the current bonus offer is a good one relative to past offers. This may help you decide which card to apply for next.

Spending Category Multipliers

Credit cards typically have point-earning bonus multipliers for specific merchant categories, such as restaurants, grocery stores, gas stations, streaming services, and more. Optimizing your everyday spending to leverage these bonus categories will help you earn points much faster than using the same card for all purchases.

For example, the Chase Sapphire Preferred earns 3 points per dollar spent on dining out (restaurants, food delivery, etc). But, it only earns 1 point per dollar on grocery store purchases. Therefore, using a different card with a bonus multiplier for grocery store purchases is the better move, helping you earn points at a faster rate.

These bonus categories are driven by the ‘merchant code’ that the credit card companies have linked with specific merchants – and they can be somewhat of a mystery. While big-name retailers are typically apparent (eg. Kroger will code as a grocery store), how smaller merchants will code with credit card issuers may not be obvious. If you’re planning to make a large purchase and are unsure how your credit card will categorize a specific merchant, make a small transaction first to see how the points are calculated.

If you have a hard time keeping up with the bonus categories for each card, don’t worry – this is a common issue. To keep it straight in our household, I label our cards (Gas, Grocery, Other, etc.) to avoid uncertainty at the checkout counter.

There are also free and premium tools available that can help with this. My favorite tool is the Card Pointers mobile app – input the cards you have and it will tell you which are best to use for certain merchant categories. Easy breezy.

Earn Smarter

You should not spend more money than you normally would just to earn points. There are ways to earn points that don’t involve spending beyond your means and potentially getting yourself into financial trouble. Being smart and thoughtful about your earning strategies is how you will win this game.

Stay tuned for articles on smart points-earning strategies. Consult your trusted resources in the meantime!

Burn, Burn, Burn

What’s Your Redemption Plan?

When you first start playing this game, you want to get the points-earning train rolling as soon as possible. Then, once you’re on track, think about what you want to do with your stash of points once you have them:

• Is there an international destination you’ve always wanted to visit?
• Do you want to try an aspirational business class or first-class flying experience?
• Do you want to stay at a specific luxury hotel property?
• Do you want to be able to travel domestically more often?

Setting some travel goals (even a rough idea) will allow you to narrow your focus on earning the most relevant point currencies needed to achieve them. One of the most important aspects of this hobby is learning how credit card point transfer partners and airline alliances can be leveraged to book award flights for maximum value. You don’t need to memorize all the different transfer partners, but the concepts are important to understand. This Master List of Transfer Partners is an excellent resource.

Some examples:

• If you want to stay at a luxury Hyatt property, focus on accumulating Chase or Bilt points because they are the only point currencies that transfer to Hyatt.
• If you want to fly on Etihad Airlines in business or first class, focus on earning points that transfer directly to Etihad or indirectly to one of their alliance partners such as Air Canada (the better move).
• If you want to fly business class to Germany on Lufthansa Airlines, focus on earning points that transfer directly to United Airlines or other Star Alliance partners.

Redemption Value is Everything

Getting the most value from your points by making good redemptions is what this game is all about. Anyone can convert points to cash back or gift cards at a 1-cent per point value. This is terrible value and you can do better. As a rule of thumb, aim for at least 2 cents per point in redemption value – but this can go much higher.

Credit Card Travel Portals

Most credit card companies have online travel portals where you can book flights, hotels, rental cars, and more with points. There are pros and cons to this method:

Booking Hotels with Travel Portals

Personally, I have booked hotels around the world through the Chase Travel Portal and have had good experiences. When traveling, I prefer to stay at independently run hotels and guesthouses rather than corporate hotel chains for a more authentic experience. Many of these types of accommodations are available to book on the Chase Portal (powered by Expedia) and other credit card portals. It’s not the best redemption value, but for me, it’s worth it to have more choices.

When I first started using points for travel, I only booked hotels through the Chase Portal and was paying cash for economy-class flights. I have since learned that leveraging transfer partners to book business class flights is a much better value and travel experience. Now, I generally use the cash saved on flights to pay for accommodations that will earn points.

Hotel Portal Booking for Brand Loyalists

If you have status with or are loyal to a certain hotel brand, this could be a factor in determining your hotel booking strategy. In this case, you might choose to book directly with the hotel brand with points or cash in order to use status benefits, qualify for upgrades, earn bonus points, get freebies, and more. When booking through a third party, you will generally not receive any credit toward status or other loyalty perks.

Why I Don’t Book Flights with Portals

Most experts in the points and miles world will advise never using third-party travel portals to book flights. This includes travel portals from your credit card company that you can book with their points “currency” (eg. Chase Travel, Amex Travel, Citi Travel, Capital One Travel) as well as aggregator pay-with-cash portals (eg. Expedia, Travelocity, Priceline, Kayak).

As delays, cancellations, and operational issues are relatively common in the world of air travel, you are opening yourself up to frustration if something goes wrong with your flight. The same applies if you need to change or cancel your itinerary – having a direct booking will make this much easier. With a portal booking, you won’t be able to contact the airline directly for help and will have to deal with a third party to resolve your issue.

I recommend avoiding this potential (and common) headache by booking flights directly with an airline – you’ll have much more control, flexibility, and support this way.

Leverage Transfer Partners

This is where you’ll get the most bang for your points. Learning the landscape of airline alliances and transfer partners for the major credit card companies will allow you to find redemption sweet spots. This is arguably the toughest part of this game because there are multiple variables at play, such as pricing and award availability. The good news is that there are great tools out there designed to help with this.

Airline Alliances & Pricing Structure

Airline alliances are groups of airlines that have partnered to enable seamless travel between destinations around the world. Alliance members honor passenger elite status, connect baggage, and allow the earning and redemption of award miles between individual airlines. Airline alliances are important in travel hacking because they can help you maximize the value of your points and miles in ways most people never think of. The major airline alliances that you should care about are Star Alliance, One World, and Sky Team.

Generally speaking, miles held with an airline alliance partner can be used to book flights on another alliance partner. This opens doors for people who have elite status or a stash of miles with one airline, as you can redeem miles and enjoy status benefits when flying other airlines within the alliance. This is also how you can get maximum value for your points and miles.

First, it’s important to understand that the airline that you book WITH sets the price – not the airline you book ON. In other words, booking an award ticket on a given airline with one of its alliance partners can often cost less in miles than booking directly with the airline you’ll be flying on.

Airlines also have different award pricing structures, even within the same partner alliance. Some airlines use distance or region-based award chart pricing (flat rate) while others use dynamic pricing that fluctuates with demand. Distance-based award charts are generally better as the mileage price is fixed and you can work toward a specific points earning goal.

For example, you can:

• Use Turkish Miles & Smiles to book United Airlines flights because they’re both members of Star Alliance.
• Use Virgin Atlantic miles to book Delta Airlines flights because they’re both members of Sky Team.
• Use American Airlines miles to book Qatar Airways flights because they’re both members of One World.

Award Availability

With this in mind, you’ll want to find “saver” level award availability which will give you the lowest points price and greatest value.

Award seats (seats that you can book with miles) are a limited commodity. In other words, airlines will only allow a certain number of seats on any given flight to be booked with miles. Once those are booked, that’s it (unless they decide to release more). You and I have no control over this.

Economy class flights generally have plenty of award availability. If you want to book business class flights, finding saver availability can be a challenge. The key is to be flexible with your dates, open to positioning flights (travel from your home city to an airport hub with more flight options), and book outside of peak travel seasons. Many people book business class award flights 9-12 months in advance or last minute. It’s certainly possible to find business class award availability without these constraints, but this will make it easier.

Be sure to check for transfer bonus promotions that occur throughout the year. These will make your points go much further.

My Favorite Flight Award Search Tools

Here are my favorite online tools for finding airline award space availability. Each has different features and offers free and premium accounts:

• Expert Flyer
• point.me
• Roame
• Seats.aero

Hotel Transfer Partners

For hotels, the darling of the points world is Hyatt. They have the best redemption value, category pricing, good status benefits, and are easy to use. Chase and Bilt are direct transfer partners (1:1) and you can earn status with award bookings. The downside is the relatively low footprint of properties around the world, but this is swiftly growing through a number of boutique hotel chain acquisitions.

While other major hotel brands are available as direct transfer partners, transferring your points to them will dilute the value of your flexible points – it’s almost never a good redemption value. If you are loyal to a certain hotel brand or want to keep/earn status, the better move is to get a co-branded hotel credit card and use that to book stays with cash directly through the hotel. You will earn hotel-specific points this way and more promotions and freebies will be available to you as a loyal customer.

Calculate Redemption Value

Here is the formula:

Cash value (at time of booking) – Cash paid in taxes/fees = X

X / number of points redeemed = Value per point

For example:

Business class flight cash price = $5,000

Taxes and fees paid in cash to book award ticket = $100

Points redeemed to book award ticket = 85,000

$5,000 – $100 = $4,900

$4,900 / 85,000 = 5.8 cents per point = GREAT redemption value!

Don’t Hoard Your Points

Thanks to program rule changes, price fluctuations, and other factors beyond your control, the value of your points will decrease over time. Hoarding your hard-earned points for some distant, unknown vacation is a bad idea. Instead, book the trip! The whole point of this game is to leverage points and miles to travel better, whatever that means to you. The more you redeem points for travel experiences, the more you will realize the potential of your points and learn the best ways to utilize them.

Conclusion

If you want to travel better, responsible credit card use can help you get there. When starting out, take time to learn the basics and keep things simple. Learn from people who have done this successfully and are happy to share their knowledge. Make the effort to optimize your points-earning rates and learn about optimal redemption strategies.

I would love to answer any questions you have about using points and miles to travel better. If I don’t know the answer, I’ll point you to a trusted resource.

What does traveling better mean to you? Drop a comment below!