Advertiser Disclosure: This site is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CardRatings.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
GCC: Welcome to the new Go Curry Cracker Award Travel series, featuring author and master travel hacker Brandon Chase. How to travel further/cheaper/more often/more luxuriously has been a much requested topic and it has finally arrived.
“Travel Hacking”, “Award Travel”, “The Hobby” – whatever you call it, the concept is the same: leveraging rewards programs to travel more frequently and luxuriously while paying less out of pocket.
In an age of dizzying advertisements and nonstop promotions from banks, hotels, and airlines all vying for your eyes and dollars it can be difficult to decipher the most advantageous programs to focus your attention on. However, if you are able to distill the overwhelming amount of noise down to useful and actionable strategies, the benefits can be incredible. I’m here to help you do that.
Jeremy has shown time and time again the perks of travel rewards, making it seem effortless as he and his family jet-sets to Europe for a summer or takes a free trip to Mexico. Indeed, once you have a solid base of travel points and an understanding of the various program intricacies, the world opens up in new and glorious ways. Suddenly, that first class trip to Asia or last-minute hotel room booked for a family member is not only feasible, but it’s no longer a hand-wringing and uncomfortable experience. A few clicks of the mouse and you’re on your way to the Maldives for less than the price of dinner for two.
Brandon serving up highballs at 36,000 ft in the Emirates sky bar.
Understand, however, that it’s not all champagne and caviar (although often it is) and that pitfalls do exist. Unused frequent flier miles can expire, rendering them useless, or taxes, surcharges, and annual fees may eat into your value. At the very least, you could be sitting on a pile of points but confused about how to redeem them for maximum value.
All of that said, you are reading this because you want to optimize benefits, minimize costs, and overcome obstacles intentionally placed by the award programs in order to maximize experience, and it absolutely can be done. In a series of articles, we’ll attempt to bridge this gap and provide practicable steps to get you traveling the world in style for pennies on the dollar.
The Basics
At its core, award travel consists of two functions: collection and redemption, better known as “earning and burning”. “Earning” is the process of acquiring miles and points across various rewards programs for future use while “burning” is redeeming those currencies for flights, hotels, or experiences rather than spending cash.
A quick note on nomenclature when it comes to these programs: a “mile” typically refers to an airline frequent flier mile for a specific airline, whereas a “point” is generally tied to a specific hotel chain or bank. A transferable currency is a type of reward that can be transformed into a frequent flier mile or a hotel point for programs that the specific bank has a relationship with. For example, a Chase Ultimate Rewards point can become a United frequent flyer mile or a Hyatt Hotels point (among others). It’s a bit confusing at first, since terms like point and mile are often used interchangeably. This will be explained in more detail below, but for now just realize that not all rewards currencies are created equal nor can they be freely transferred between programs.
Earning
Credit cards are by far the fastest, easiest, and most effective method of earning large amounts of miles and points. Many banks offer credit cards which provide 50,000-100,000 points or miles once you complete a minimum spending threshold of $3,000-$5,000 in a specified time period (usually 90-120 days after opening the card).
For our purposes, the most easily understood version of the credit card is one which directly earns airline frequent flyer miles or hotel points, such as the card_name from Chase or the card_name. These credit cards earn one or more airline miles or hotel points per dollar charged to the card and the points are deposited into your airline or hotel award account on a monthly basis. Those points can then be used to book award flights or free nights with the airline or hotel and any of their partners.
In addition to miles and points earned for specific airline or hotel programs, there are also credit cards which earn “transferable” points currencies such as Chase Ultimate Rewards (UR), American Express Membership Rewards (MR), Citi Thank You Points (TYP), and Capital One Venture Miles (CapOne). These currencies, while sometimes redeemable directly for travel as mentioned below, can be transferred into airline miles at a 1:1 rate based on the bank’s relationships (with the exception of Capital One, whose ratios are less favorable). For example, URs can be transferred to any of their 10 partner airlines including United Airlines, British Airways, and JetBlue. Depending on the currency, these points can also be transferred to some hotel programs but are generally a poor value.
Finally, there are credit cards that earn fixed-value points such as US Bank FlexPerks, Barclay Arrival Miles, and Capital One Venture Miles (CapOne miles can both be transferred to airlines and also redeemed as fixed-value points). The points from these programs are sometimes, confusingly, referred to as “miles” although they are not airline miles as described above. Instead, they are generally redeemable at a 1-2 cent per point fixed rate through the bank’s own travel portal or used to reimburse yourself against charges for travel-related expenses on your statement.
Miles, points, and transferable currencies. Confusing at first, but makes sense once you learn it.
Although credit cards will be the cornerstone of earning points and miles, there are multiple ways to top off your balances, including:
- Using online shopping portals
- Leveraging category bonuses on your spending (e.g. using the card_name to pay for travel, earning 3 UR per $1)
- Flying or staying at hotels (duh)
- Completing stay or spend bonuses by hotels or banks (e.g. “stay 2 nights and earn 5,000 points” or similar)
- Reselling (buying goods at a discount and flipping them for profit on Amazon, eBay, etc. and earning points on the purchase – a small business!)
We’ll detail more information on these topics in future articles, but for now just know that credit cards are the best option for quickly amassing points (and, no, it won’t hurt your credit to open multiple cards). With some practice, patience, and time, the act of earning miles and points will become second nature. Before you know it, you’ll be diving across the table to ensure you earn points on the group lunch while also paying for entire household renovations with gift cards.
Burning
While optimizing your spending to earn insane amounts of rewards is fun on its own, the real magic happens when you redeem those hard-earned points for luxury travel. However, this is also where things can get complicated. The banks, airlines, and hotels would love nothing more than for your points to sit safely in your account collecting dust while their expiration date looms.
It took some effort and creativity to earn your points, but redemption is where the award programs double-down on obfuscation – especially airlines. They intentionally make it difficult to extract value by increasing the number of miles required for flights, blocking award redemptions on certain routes, and misleading its customers into wasting their points on sub-optimal redemptions such as gift cards or iPads. If it ever crossed your mind to feel bad for leveraging the airlines’ programs, forget it: in 2016, American earned an estimated $2.1 billion from their AAdvantage program while providing award seats on barely more than half of their flights. Unfortunately, this is common across rewards programs and only getting worse.
The good news, though, is that new opportunities are continually cropping up and more information than ever before is available on the Internet to help you solve even the trickiest of questions as long as you know where to begin. In order to get to that point, you’ll need some familiarity with how redemptions work. There are four basic ways to redeem points and miles for travel:
- Redeeming airline miles for a flight
- E.g. Using American Airlines miles to book a flight on American or one of its partners.
- Redeeming hotel points for free stays
- E.g. Using IHG Points to book free nights at a partner hotel
- Redeeming a transferable currency for flights or hotels
- E.g. Transferring Ultimate Rewards points to United miles and booking an award flight, or transferring to Hyatt points and booking a free night
- Redeeming fixed-value credit card points directly for travel
- E.g. Using Barclaycard Arrival Miles, US Bank FlexPerks, or Capital One Venture Miles to book a flight, hotel, car, or experience at a fixed redemption rate (1-2 cents per point/mile)
The key takeaway is that redeeming airline miles for flights is the best way to get maximum value from your points, but it’s also the hardest concept to grasp because of the numerous rules and restrictions put in place by airlines. Using fixed-rate currencies, on the other hand, is easy to understand and perform but you limit your value. For example, you may be able to get 5 cents per point or more in value from a flight booked with frequent flyer miles whereas you’ll never get above the advertised rate of 1-2 cents per point for fixed-value redemptions. Therefore, it makes sense to prioritize your efforts in learning the intricacies of award flights if maximum value is your goal.
Final Thoughts
On its surface, travel hacking can seem too good to be true. Sign up for a few credit cards, put your spending on them, then fly first class to Europe this summer – what’s the catch? The catch is that it takes some learning, flexibility, and organization in order to obtain outsized value for your efforts. Once you have foundational knowledge of the various currency types, earning strategies, and redemption options, you are then able to lay out your credit card applications and spending in a way that aligns with your travel plans.
Travel hacking is an exciting, captivating, and valuable hobby but it’s not without its pitfalls. By understanding the basics of earning and burning, you are well on your way to thousands of dollars in free travel. Over the next few weeks, we plan to dig deeper into this topic to help you get the most out of your points and miles.
Which topics would you like to see covered in this series? What is most confusing about award travel for you?
Top offers from our partners
| Great travel card! card_name - bonus_miles_full annual_fees This is a great card for travelers! | |
| card_name - bonus_miles_full 2X miles on every purchase. Learn more here. | |
| card_name bonus_miles_full. *Rates and Fees. Numerous credits - Up to $200 in Uber Cash. $200 hotel credit with two-night minimum stay. $240 media credit. All as statement credits. (enrollment required) annual_fees. Terms Apply. | |
| card_name Small Business card. bonus_miles_full. Worth $1,250+. 3x points on travel (on the first $150,000 spent in combined purchases) annual_fees. |
Interested in getting the best and latest offers directly in your inbox? We stay on top of the best offerings so you don’t have to. Subscribe here.
Editorial Note – Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
User Generated Content Disclosure – Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
I know a lot of this introductory posting, however I wanted to comment to let you know I will be sharing this with friends and really just to affirm I am really looking forward to this series
Thanks, Chris! Indeed, this post is just laying the foundation for the series but I promise we’ll get into more juicy topics as it progresses.
Currently trying to decide if my Mariott points are better for hotel redemption or transferred to Alaska for flights. Thoughts?
As with many aspects of award travel, the answer is “it depends”. Do you have a specific flight redemption in mind? In general, transferring Marriott points to airlines offers poor value (3 points to 1 mile) and you’re better off using points for hotel stays.
This is great, I’m really looking forward to the series. I’m a beginner and I find it most confusing to figure out which airline program to book a certain flight on to get maximum value, e.g. book a united flight but use one of their partners because the redemption through their frequent flyer programs requires less points. Also, all points are not created equal, so a dollar value chart to help decide if it’s better to pay cash rather than use points would be great.
This is definitely a confusing topic as every partner has their own award chart, even within the same alliance. I’ll be sure to cover this and some examples in a future post!
Hi Newbie here. Can you explain to me why travel hacking is better than the 2% cash I get back on my credit card. It seems to me that the points/miles values are worth less. Please provide examples. Thanks.
This is so true! I’d love to hear why travel cards are better than cash back cards.
In short, when you use miles to book premium cabin airfare you can get way more than 2 cents per point (2%) in value. As Jeremy mentioned in this article, he was able to get $7,000 in flights for him and the family for just $221.95 out of pocket. To generate enough cash back to pay for those flights, you would need to spend $350,000 on a 2% cash back card. The values can go even higher than that, though – when my wife and I flew in Singapore First Class Suites we paid about $400 out of pocket for $13,000 in flights (7 cents/point value).
A 2% cash back card is a great “catch all” for expenses without category bonuses, but the rewards are fixed. Transferring to airline and hotel programs is where the real value lies.
My most epic award travel booking evah was 20 cents per point on business class tickets from Hong Kong to Paris. Retail price of $8,500 for 42,500 Alaska airlines miles.
You can get 42k Alaska miles by opening one credit card / 2k minimum spend.
Within this series, it would be nice to have some general guidelines as a summary. For example, is it generally best to redeem airline miles for tickets above a certain price point. Hotel miles for popular destinations or at an interstate rest area? Realizing that rules change frequently, a model matrix would be helpful. Then one would know that a particular redemption is reasonable even if not the absolute best.
Thanks for the great suggestion! A good rule of thumb is that you should aim for at least 2 cents per point in value from your airline miles. For example, if the cash price for a flight is $1,000 and the airline is charging 100,000 miles for the ticket, that would be 1 cent/point in value (1,000/100,000) and you’re better off paying cash and saving your miles for a better redemption. If the mileage requirement for that same flight is 50,000 or less, it’s a reasonable redemption (if it’s close, then it’s a toss up and you can do either depending on whether you have more cash or more miles to spare). The larger the difference between the cash price and required mileage, the better the redemption is.
You’ll get greater value from premium cabin awards simply because the cash price is higher, although there’s no reason not to use your miles for economy tickets to stretch them over more trips.
That’s the basic philosophy, but I’m happy to put together a summary table when we get to that point in the series.
Really looking forward to this whole series Brandon! I’d love to see a points redemption summary table later in the series.
This is a great post, thank you! Can anyone share thoughts or tactics on closing the credit cards after burning it’s miles/points and how to avoid that affecting one’s credit score?
I’m tempted to use these strategies but don’t want to end up with 10-20+ credit cards.
The only way closing cards affects your credit score is that it can reduce your debt/credit ratio and “average age of credit”. For example, say you have $50,000 in credit extended to you across all banks and credit cards, and you have balances totaling $10,000. That would be a debt-to-credit ratio of 20% (10k/50k). If you then close two accounts that had a $5,000 credit limit each, your total credit limit reduces to $40,000 and would increase your debt-to-credit ratio to 25% (assuming you had the same amount of debt). This could have a slight impact on your credit score, but is easily fixed by paying down the balances on other cards or opening new ones to extend your credit.
The best thing to do, if you don’t mind keeping the card open, is to first ask for a retention offer to see if they will waive the annual fee that year or provide extra points or miles in exchange for keeping the card open. If they don’t give you any good offers, consider downgrading the card to a no-fee option to preserve the credit amount and age. If nothing is available then close it and don’t worry – the impact on your score is minimal and short-lived. Either way, it’s advisable to keep the card open for a full year before you downgrade/close it (you can get the annual fee refunded up to 30 days after it’s charged it you decide to close or downgrade the account).
Hey Brandon,
I’d be curious to know what card you recommend after Chase Sapphire Preferred. As you mentioned here, this is a great starter card. However, we’ve already gotten all the sign-up bonuses for our household, and are ready to start looking at other cards. There’s so many options and none of them seem quite as appealing as the Chase Sapphire (often due to hefty annual fees)… what would you advise next?
How about a business card like the Ink Business Preferred? If you have (or are even thinking of starting) a business, you qualify. It’s similar to the Sapphire Preferred (earns 3x on travel up to $150k/yr) and has a juicy 80,000 point welcome bonus–after $5k spend in 3mo–for the same $95 annual fee.
Armchair, 8+ Mb internet connection, 4K display device. Switch locations on YouTube according to whimsy.
Example:
Spectacular Namibia and Botswana in 4K UHD – Discovering The Deserts – African Relax Video
https://www.youtube.com/watch?v=GgoGrwes4cA
No Airport people. No customs people. No Spam-In-The-Can day long flights. …
My price: free.
Add the cooking channel and you don’t even need to eat! :p
Cooking Channel slogan: “Stay Hungry.”
Could you please reccomend cards available in Canada?
Thanks in advance…..
While this series is U.S.-focused, TPG has a post about Canadian cards that you might find useful.
Thanks Brandon! I’m pretty excited for the rest of the series and to learn a lot!
A big worry I have about travel hacking is how to keep track of everything. Opening cards, needing to meet a minimum spend in a certain time, using points before they expire, and potentially cancelling before an annual fee is charged. In addition many travel hackers seem to have over a dozen cards, and points through different places. I feel like this would make me go crazy. Is there anything you do to help you deal with this?
Happy to help, Miguel!
Staying organized is absolutely one of the key components to getting the most out of award travel. One of the best tools to keep track of your miles and points across most programs is Award Wallet. The free version is completely functional and a huge lifesaver. The premium version ($30/year) allows for notices of mileage expiration on all your accounts so you don’t lose them due to inactivity.
For keeping track of your cards, I use a simple spreadsheet with columns for the card name, date it was opened, minimum spend and due date, annual fee, and notes. There are lots of examples floating around, but I think it’s better to use one you create so it’s exactly what you want.
Just curious, when it comes right down to it for me, I don’t do much airline travel, so to me it just makes more sense to use my Citi 2% cash back card. These cards are geared to hyper travelers, which I get, but for the occasional traveler it just seems like a hassle to deal with points/miles and the resistance to redeeming them in an easy manner.
Am I missing something?
I would actually argue that you are a great candidate for travel rewards cards. It doesn’t have to be complicated. Once you learn the basics of making a redemption (air, hotel, train, etc.) you can simply get one or two cards per year for whatever travel needs you have, meet the minimum spend, then use your 2% card for whatever else doesn’t get extra points (BTW, your Citi DoubleCash can either earn 2% cash back OR 2 Membership Rewards points per dollar, which is really closer to 4% back when redeemed for flights). I’d suggest sticking with the transferable currencies that align with your most-used programs.
So you would suggest the Chase Sapphire card to supplement my Citi 2% cash back for a person who travels by air once a year?
Absolutely! The CSP is a great choice not only for the welcome bonus but also for the primary rental car insurance, no foreign transaction fees, trip cancellation and baggage delay insurance, and 2x points earned on travel. Even if you don’t travel often, the benefits of the card will more than outweigh the annual fee.
I know this is a little late but any thoughts about the IHG Rewards
Club Premier credit card? t says 140,000 points when you spend $3,000 in first 3 months with $89 annual fee?
You’re reading ahead :). The IHG Rewards Club Premier is an excellent card whose benefits far outweigh the annual fee. The welcome bonus alone is worth several free nights at mid-tier properties and the annual free night certificate is reason enough to keep the card year after year. I would absolutely recommend it as your first hotel card!
Question related to redeeming miles. I don’t want to personally take the time to find the best deal. I would rather pay someone to find it for me. Anyone ever used award booking sites for them? such as worldawardbookers.com or awardadvocate.com? Look forward to everyone’s response. Thanks for the help!
Although I have not personally done it, I understand the services to be legitimate. While there is some “thrill in the chase”, it can certainly save you a lot of time by having someone else do the leg work! JuicyMiles is one I have heard recommended often.