Welcome to the world of points and miles! We’re sharing how Ordinary People can travel to Extraordinary Places by using airline miles and hotel points. In this series we lay out steps to save money and travel more. Here are the topics we cover.
- Getting Started with Points and Miles
- Look and Learn Before You Leap
- Decide What Type of Reward Points You Want to Begin Earning
- Sign-Up For a Frequent Flyer Account
- Earn Your First Points
- Pick the Pace That Works For You
- Earn Points Through Credit Card Sign-Ups
- Earn Points Through Credit Card Spending
- Earn Points Through Shopping Portals
- Earn Points When Dining
- Earn Points When Renting Cars and Booking Hotels
- Redeem Your Points for Travel
- Keep Your Points from Expiring
- Keep on Earning
Today’s Topic: Decide What Type of Rewards You Want to Begin Earning.
Points and Miles Come in All Shapes and Sizes– There are a multitude of points programs that can help you travel more for less. Each program has unique rules for earning points, redeeming points, maintaining points (most points expire over time). To learn it all at once can be overwhelming, so we encourage you to pick one type of point to begin earning. For example, maybe you’ll start by earning American Airline points for a trip to Hawaii! Perhaps you’ll earn Hyatt points for your stay in Paris (one of our favorites). Each person has different travel goals, so to help you decide, let’s do a quick overview of the different types of points.
Three Different Types of Points–
- Fixed Program Points – Points which are earned, and then used in a single airline or hotel program
- Transferable Points – Points which can be transferred to multiple airlines or hotels
- Fixed Value Points – Points which can be redeemed for a fixed dollar amount
TL:DR – If the following is too long, I recommend that most people start by earning transferable points.
Fixed Program Points
Fixed program points are probably the most well-known type of rewards. They are “fixed” because the points are used within a single frequent flyer program, or single hotel program. When I began earning points, I had a credit card that earned American Airline miles. The AA points earned by my AA credit card were transferred to my AA frequent flyer account. Once the AA points earned by my AA credit card were in my AA frequent flyer account, I used my AA points to book flights through…you guessed it… AA. American Airline points are used to book flights available through the AAdvantage program. I can’t use American Airlines to book a flight on Southwest. Single Program points are straightforward, you earn and “burn” the miles through a specific program. Examples of fixed program points include:
- American Airlines – AAdvantage Program
- Delta Airlines – SkyMiles
- Southwest Airlines – Rapid Rewards
- United Airlines – Mileage Plus
- JetBlue – TrueBlue
- Alaska Airlines – Mileage Plan
- British Airways – Avios
- Airfrance – Flying Blue
- Hyatt – World of Hyatt
- Hilton – Hilton Honors
- Marriott – Bonvoy
- IHG – Rewards Club
Once you dig deeper you’ll find that in some cases these fixed program points can be transferred to other programs. For example, Marriott Bonvoy points can transfer to certain airlines. But for the sake of getting started, if you chose to earn fixed program points, do so with the view of using these points within their designated program.
A number of credit card companies offer the ability to earn points which can be transferred to a variety of airlines and hotel programs. For example, certain American Express cards earn Membership Reward Points. Membership reward points transfer to 19 airlines and 3 hotel programs. If you like the idea of earning transferable points, here are several programs to consider.
- American Express Membership Rewards – Transfer to 19 airlines and 3 hotel programs.
- Chase Ultimate Rewards – Transfer to 10 airlines and 3 hotel programs.
- Citi Thank You Points – Transfer to 13 airline partners.
- Capital One Miles – Capital one recently launched the ability to transfer miles to about a dozen airline partners. In my opinion, the transfer ratios are not that great. For example, 1 Citi Thank You points equals 1 Air France Flying Blue point. It’s a 1:1 transfer. Not in the case of Capital One. Two Capital One Miles equal 1.5 Airfrance Flying Blue miles, that’s 25% less miles, than with Citi Thank You points.
A couple notes on transferable points programs
- Make sure you get the right card. Not all Chase credit cards earn Ultimate Rewards. Not all Citi credit cards earn Thank You points. Not all American Express Cards earn Membership Rewards and not all Capital One cards earn Capital One Miles.
- Some transferable points can be converted to cash. There are cases where transferable points can be “cashed out” instead of transferring them to an airline or hotel program. This may be an attractive “fall back” option if you travel plans change and/or cash comes in handy.
Fixed Value Points
The third type of point we’ll consider is fixed value points. Some credit cards earn points and “miles” which can be redeemed for a fixed dollar amount. For example, the Barclay Card Arrival Mastercard earns Arrival points. If I buy a $200 airline ticket using my Arrival card, I can then redeem 20,000 Arrival points to offset the cost of the ticket. The $200 shows up as a statement credit on my credit card bill, in a sense, erasing the cost. Fixed value points are generally worth between 1 and 2 cents a points (usually closer to 1 cents a point). In most cases, the points can be applied to a large variety of travel expenses and sometimes non-travel expenses. Fixed value points credit cards include:
- Barclay Arrival Plus Card
- Capital One Venture Card
- Bank of America Travel Rewards Card
- Wells Fargo Propel Card
- U.S. Bank Altitude Reserve Card
So…What’s better, fixed program, transferable points, or fixed value points? The answer is…it depends! Depends on what? How you plan to use them. Here are questions to help you narrow down your first type of point.
Is there a specific airline you like to fly? If your heart is set on flying American Airlines, the most straight-forward path is to earn Aadvantage miles which is are a fixed program points. Is your local airport a hub for Delta, maybe begin by earning Membership Reward points, which transfer to Delta at a 1 to 1 ratio.
Are you committed to a particular hotel brand? If you always stay at a Marriott, then Marriott Bonvoy points could be a place to start. If you stay primarily at Airbnbs, you’ll want to earn points that can be cashed out for travel charges. This means fixed value points, or maybe something like Chase Ultimate rewards, using a cash-out option.
My Advice – Consider Getting Started with Transferable Points
Transferable points are probably the best place to start for the majority of people. The flexibility can be helpful when planning for a vacation. If you do choose to earn transferable points, I recommend earning either Chase Ultimate rewards, or American Express Membership Reward points. Chase and Amex have a stronger set of transfer partners.
What Type of Point Will You Begin Earning?
Take the next step towards travel, decide what type of point or miles you will begin earning!