Introduction to Airline Miles and Travel Points

An Introduction to Airline Miles and Travel Points

Have you ever wondered how people travel for free (or not very much money) using airline miles or points?  Does the idea intrigue, yet intimidate you?  If so, read on.  We’ll explore the topic and break it down into more manageable bits.

How it works

First, how does all of this work?.  Originally, airlines had Frequent Flyer programs.  Travelers accumulated miles based on how much they traveled.  They could then used those miles to pay for additional travel.

Although that’s still the basic idea, over the years the programs have expanded significantly.  You can now get miles and points in lots of ways, and not just by traveling.  These new ways are what have made loyalty programs so valuable.

Miles, points, what does it all mean?

What’s the difference between a mile and a point?  They both represent credits that can be redeemed.  In general, miles are credits accumulated with an airline, and can be used specifically with that airline and its partners.  Delta, for example, is part of the SkyTeam Alliance, and its miles can be used on other SkyTeam airlines such as Air France and Korean Air.  Points are credits accumulated by using a credit card.  Points can be redeemed for travel, but can also function like cash in many instances.  Just to confuse things a little bit, though, airline branded credit cards (like the Delta American Express cards) accumulate miles, not points.

Miles are tied to airlines and points are not.  Some points, such as Chase points, can be used with many airlines, making them more versatile.

How to get miles/points

You can get miles and points in several ways.  The basic ways are to fly on an airline and use your credit card to make purchases.  In addition, you can get miles when you open a credit card and meet a minimum spend threshold, by doing online shopping through a card’s shopping portal, and by signing up for certain services. 

Ways to get a bunch fast

The fastest way to get a lot of points is to sign up for a credit card and meet a minimum spend threshold.  Depending on the special offers that are out at any given time, it’s possible to get as many as 100,000 points with one of these offers.  It’s even possible to do this over and over again with different cards, allowing you to accumulate hundreds of thousands of points or miles fairly quickly.  This is what’s known as “travel hacking”.

There are a few things to keep in mind if you decide to do this.  First, and most importantly, this only saves you money if you pay off your credit card balance every month.  If you’re carrying a balance, you’re paying more in interest than the points are worth.  If you have credit card balances, stop buying, start paying them off, and get rid of your consumer debt before you even consider travel hacking.

Second, some companies limit the number of bonuses you can get, or limit the number of cards you can open within a certain time period.  They do this to prevent you from “churning”, which is a popular method of taking advantage of these offers.  I have no problem with churning.  The credit card companies set these programs up for a reason, and they have decided that, in the long run, it makes good business sense for them to offer them.  If people are using those programs to their advantage, good for them!  But it pays to know the rules, so you don’t miss out on points by taking a lower bonus, then preventing yourself from later getting a higher one.

Third, make sure you can meet the minimum spend within the allotted time frame.  It doesn’t do you any good if you miss the awesome bonus.  Some minimum spends are relatively low, but I’ve seen them as high as $25,000.  You might want to open cards when you know you have upcoming expenses to take advantage of this.  

How to accumulate them more slowly

Some people continuously open cards, reaching the minimum spend and moving on to the next.  If you don’t have time for that, can’t reach the minimum spend that often, or don’t want to bother with the hassle all the time, there are other ways to accumulate points.

Just using your credit card for regular shopping will gather you some miles.  Most cards give you at least one point or mile per dollar spent—many will give you additional miles per dollar spent in certain categories.  Some give extra miles for restaurants, some for fuel purchases, and some for business expenses, among other categories.  Those extra miles and points can add up.

In addition, most credit card programs have shopping portals, which give you extra points and miles for online shopping when you go through the portal.  An extra mile per dollar is nice, but you’ll get the most bang for your buck with special offers.  Getting into the habit of starting any online shopping by checking your portal(s) will pay off.  You’ll see if there are any bonuses at specific stores.  I’ve gotten as many as 12 miles per dollar spent in the past at certain stores.  The bonuses come and go, so we’ve gotten into the habit of trying to wait on purchases that aren’t time critical until we see a good bonus.  

How to use points and miles

Once you’ve accumulated enough miles or points, it’s time to start thinking about taking a trip.  Airline miles are usually pretty easy to use.  You book through the airline website using your miles to pay for the trip.  Points are more complicated, but can be a lot more valuable.  Many points can be transferred to an airline’s program—but usually can’t be transferred back, so make sure you’re really going to use them.  It’s typically best to store your points in the original program you’ve acquired them in until you’re sure you want to move them to an airline for use.  Some points programs have their own travel websites.  With some (Chase) your points are worth more if you use them on their own website.  Other points programs allow you to use points to erase travel expenses off your credit card bill.  

This post is just an overview, and the travel miles and points rabbit hole can go very, very deep.  If this is something that you’re interesting in learning more about, you can find great courses that can teach you the nuances.

I’ll be honest.  I haven’t utilized these programs to their full potential.  It just gets overwhelming and there are so many other things that need to be done.  But even by just focusing on the basics, I’ve managed to pay for three family trips to Europe with our points and miles, and I still have enough for at least another two or three trips.  You don’t have to become an expert to benefit from these travel programs.  Give them a shot!

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