Notes on Miles and Points
Glossary
- Points aka Miles aka Avios aka Rewards Currency
- An alternative currency awarded by loyalty programs of airlines, hotels, and banks in exchange for flying, staying, or spending with their business
- Most points go unused. Airline loyalty programs in many cases are more profitable for airlines than transporting passengers
- Airlines sell points to credit card issuers and other businesses for real money for them to pay out to customers in the forms of rewards to establish brand loyalty
- Rewards Credit Card
- A credit card that awards some points in an airline, hotel, or bank loyalty program in for each dollar/euro/pound spent
- Cash-back Credit Card
- A credit card that awards some cash, or points redeemable for cash at an attractive rate, for each dollar/euro/pound spent
- 2% cash-back may be your best deal
- Spend $20000 a year on a credit card get $400 in travel
- Even the best rewards credit cards will net about 1 domestic (USA) economy ticket for the equivalent spend and depending on the rules of the airline and availability of award tickets
- Signup Bonus
- A large increment of points granted after signing up for, and usually meeting a minimum spending threshold, on a credit card
- The goal of this bonus is to make it such a habit to use this card that you will switch all of your spending to this card even after the bonus is awarded and the points earned per spend becomes less rewarding
- Credit Card Annual Fee
- Many cards that provide perks such as cash-back or points also levy an annual fee on cardholders
- There are some fees that "pay for themselves" in value. Others will add up over time to more money than you receive in value -- those cards should be closed after the first year.
- Award
- Term describes a flight or room booked by redeeming points
- Cash and Points
- Term describes a flight or room booked by redeeming a combination of cash and points
Where to earn?
- The biggest earning are always credit card "signup bonuses"
- I have earned 100,000 Avios from one credit card signup 10 years ago
- Each additional credit card will have an impact on your credit
- In the US having more credit available but paying all statements on time or early improves your score in the eyes of financial institutions
- Signing up for more than 5 cards in two years can cause banks to ban you from opening new cards until that sliding window of time no longer contains 5 cards
- Flying
- It has become increasingly difficult to earn a meaningful number of miles and points from actually flying. However, one thing that can be helpful is focusing on accumulating miles and points in a small number of accounts
- Airlines form alliances with groups of "partner" airlines
- Within an alliance you can typically earn miles and spend miles on partners
- You can fly on airline A and accumulate miles in you airline B account if A and B are in the same alliance and you list your frequent flyer number from airline B on your ticket when you book it
- By doing this you can focus the growth of your points and miles balances in the accounts with the most generous redemptions
- Every so often an unintentionally good earning to redemption ratio causes airlines to reevaluate how much flights on partners earn. This leads to so much complexity that when equiped with the booking class of your ticket (usually a single alphabetical character) you can use sites like Where to Credit to figure out where you can and should credit miles you earn from flying
- Shopping Portals
- Portals typically drop a cookie in your browser to ensure that they get credit for driving your traffic to a merchants website resulting in a sale. The merchant compensates them for this and they share a portion of the compensation with you. If there are online purchases you are planning to make anyway buying them through a portal is a free way to get a bonus for yourself in terms of cash-back or points.
- Cash-back portals
- Typically pay 0.5 - 5% back depending on the purchase
- Payment is in the form of a check by mail, bank transfer, Amazon e-gift card, other types of gift cards
- Topcashback US UK
- Points portal
- Grants rewards currency rather than cash for purchases
- Since most miles and points expire after 1-2 years of inactivity making a purchase through a points portal is a great way to keep lesser-used miles and points from expiring
- Some of these are officially affiliated with the airlines themselves
- Iberia Shopping Portal
- Approximately once a year Groupon Spain sells packages of Avios at a discount. At the same time you can use the Iberia Shopping Portal to get additional Avios for your purchase on Groupon when you start your transaction through that portal. I have done this twice and if the math makes sense for you I recommend it.
Where to burn?
- Spending or "burning" miles and points is subject to award availability which can be limited or impossible to find. The first step of any award redemption is finding available dates to build your trip around ... not the other way around.
- As previously mentioned you should focus on a few accounts that give you good earning and redemption options while covering several alliances
- My personal strategy as an example
- OneWorld Alliance
- British Airways is the account I typically credit to
- American, British Airways, Iberia, and Aer Lingus are my typical redemption partners
- Star Alliance
- Avianca is the account I credit to
- United is my typical redemption
- There are some sweet spots with Turkish Airways that could make them a good option to credit to
- SkyTeam Alliance
- I don't like this alliance
- Korean Airlines has some sweat spots so I would consider them a good option
What can transfer where?
- You cannot transfer from one airline loyalty program to another* ... unless it's Avios
- Avios can uniquely be moved, for free, between Avios accounts registered in your name after linking them together. There are opportunities to earn and spend Avios that make this arrangement really helpful. Don't assume that using British Airways Avios to fly British Airways is always the cheapest redemption (mind explosion) it can sometimes be Iberia if you have a multi-stop itinerary.
- You cannot transfer points from one account holder to another ... unless it's an Avios Houshold Account
- You can book an award ticket for anyone you want from your account. Unless you are short on miles and points there is no reason to transfer between accounts because you can just book a ticket from your account for someone else without transferring anything to anyone.
- Flexible rewards currencies, typically issued by banks, allow transfer to a variety of hotel and airline loyalty programs
- American Express points are a good international example of flexible points that transfer to many different programs
- Hotel points can often be redeemed for airline miles at an unfavorable exchange rate
- Possible exception here is Marriott Bonvoy (when transferred in increments of 60k)
- They have the most airline partners of any program which unlocks unique redemption options and partners
Sweet spots
- 26,000 Avios to fly Aer Lingus round trip economy from the US East coast to Dublin (or Dublin to the US)
- Recent list Beware that some of these are 1-way and not round trip
- If you can scroll past the million ads there are some good ones in here for Avios, all are listed as the 1-way price and not round trip. LATAM ones are no longer available.
- Avianca list
Maximizing value
- The most valuable points you spend are the ones where you feel like you are getting a good value
- Empirically though, some deals are better than others
- You can spend points on flights and hotel rooms at peak times where you get an amazing ratio of points / rate you otherwise would have paid
- People, including me, like to talk about how they got "$20,000 in airfare" for 300,000 frequent flyer miles. However, I would never pay $10,000 a ticket so I did get a good redemption rate but I didn't save anything that I would have ever dreamed of spending
Tools
- SeatGuru Search aircraft layouts to find the best seats to book in terms of comfort and location and which to avoid
- AwardWallet to organize accounts and keep track of expirations - Upgrade the functionality of your free account using my referral code
free-bjthct
- Evreward Search portals by online merchant to discover what types of points and miles bonuses are available for an online purchase you already planned to make
- AwardHacker get a quick idea of how many miles each program would require to get you from point A to B
- Finding award availability could be it's own blog post TL;DR you usually need to use the airline or a partner to see if award tickets are available and then often call on the phone to book. It can be arduous and take a long time.
- There are services that book awards for you if you have a ton of points and miles and you would rather not play this game. Here is a list of such services.
- Where I like to search for hotels
- Searching for paid flights
- Rome2Rio This site / app is useful for figuring out complicated things like where to buy ferry tickets and other transit passes that Google Maps typically cannot find
- AutoSlash Track and re-book rental cars at a better price using automation. Highly recommended.
Tips
- If you value free food and the potential for a shower when traveling getting a credit card with lounge access can make sense
- Lounge access unlocks the possibility of free food and showers during layovers on long journeys
- Check to see that the coverage and availability of lounges works for your travel needs. It may not be worth the cost of the credit card annual fee if you can purchase a single day lounge access a few times a year for less.
- Don't chase airline status. They can change the rules whenever they want and the perks aren't that great
- If you really want the perks an airline credit card generally gets you earlier boarding and free bags on the affiliated airline which is worth it for some people
- If you have a special trip in mind where status would allow upgrades or a better experience you can sometimes apply for a status match or challenge. These can potentially grant you status for a short time with the ability to keep the status if you do a lot of flying on their airline.
- Hint: If you work for a major company see if they offer any status match or challenge options specific to the company. This is often easier, and more widespread for hotel status than airline status.
- In some cases people with elite status can gift upgrades to someone else. You could see if someone you know with this status, or a stranger on this thread, is willing to gift an upgrade to you.
- In the case of AA SWU's (previous link) there are very specific criteria for the flight you want to upgrade: It must be American Airlines, it must be on their aircraft, it must be international, there must be upgrade space available. The best time to score an award as a gift is right before they are about to expire and become worthless. Look for AA SWU's on the linked thread around December or January each year to be applied by the end of January to travel occurring the following year that you have already booked on a qualifying AA flight -- which must have upgrade availability (typically searched for using a 5 day trial of ExperFlyer). The best way to apply the gifted upgrade is to use Twitter direct messaging to American Airlines to save long phone wait times.
- Cheap IHG Hotel points trick
- You will need some points in your account to book this in the first place. Buying some when they are on sale is a good way to get started
- Same trick for Choice Hotels
- Hotel BRGs A guide to maximizing Best Rate Guarantees
- Some require you to have already purchased the room from their official site before you submit your claim. If you plan to do this but you aren't sure they will honor your claim (they try to get out of it as much as possible) book a refundable room rate
- You can save 10%, earn some additional points, or even get a free night stay out of it