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- Points and miles can be intimidating. There is a lot to learn, and sometimes it seems impossible to ever use these hard-earned rewards.
- When you're ready to make a little effort and increase your income with a reward credit card, points and miles can be extremely rewarding. Think international first and business class and five star hotels.
- Even if you just want to dip your toes in the water, you can easily earn enough points and miles to cover domestic travel.
- See the list of the best business insider premium credit cards »
You've probably seen articles about seemingly average middle-class Americans who use points and miles for trips that seem impossible – flying international business class to Australia, diving in the Maldives, or spending a week in a ski resort in Aspen – and you might ask yourself how you could do the same.
It's easier than you think, and it doesn't require spending hundreds of thousands of dollars. It's about maximizing the spending you spend on the right reward credit cards and getting to know the best ways to redeem travel rewards.
You can start your journey with miles and points in the following eight steps.
Keep in mind that we focus on the rewards and perks that make these credit cards great options, not on things like interest rates and late fees that far outweigh the value of points or miles. It is important to exercise financial discipline when using credit cards by paying your balance in full every month, making timely payments, and spending only what you can afford to repay.
1. Decide what your priorities are
How often do you travel each year? Would you like to add more trips, replace a trip that you normally take with something more extravagant, or just save some money on trips that you would take anyway? Are you hoping to use points and miles to offset the cost of flights, hotels, car rentals, activities, or something else? (Flights and hotels usually offer the best value for money. We'll focus on that here.) All of these are important considerations when planning your strategy.
If you know where you want to go, find out which airlines fly there, which hotels are available, and how much their respective loyalty programs charge to redeem award flights or hotel stays. This way you can find out which credit cards are best suited to your requirements.
Also check the travel blogs to see if there are certain issues you need to consider. Does the airline you want to book, for example, only provide first-class seats seven days before departure? Does the hotel you are viewing require you to stay at least four nights to make a point reservation? These are good things to know before earning points that may be harder to use than you hoped.
3. Select one or more credit cards that match your priorities and apply
If you know that a particular airline is the best way to get where you want to go, that airline's credit card may be a good place to earn many miles with a sign-up bonus.
When you look at a specific hotel, you look at the hotel chain's credit cards. As a rule, these offer either free night certificates or bonus reward points for registration as well as additional advantages such as the elite status in the hotel's loyalty program.
And if you're not sure about your plans or have multiple options, many banks have their own reward programs, the points of which can be transferred to multiple affiliate programs. For example, American Express Membership Rewards points can be transferred to 17 different airlines and 3 hotel programs, or used to book cash cards directly (so you don't have to worry about availability restrictions). With cards like that, you can earn Membership Rewards points Platinum Card® from American Express and the American Express® Gold CardThese cards also offer other benefits, such as airline statement credit for annual bills.
4. Spend wisely
A premium credit card is not an excuse for spending extra money – it saves you money! The rewards you earn – even with a credit card sign-up bonus – aren't worth enough to offset expenses that go beyond your means.
Reward credit cards should be a way to increase the value of your daily expenses, and not a reason to justify additional purchases or expenses that go beyond your means.
5. Plan ahead
Airlines typically provide award seats 10-11 months in advance, and most hotel programs also provide rooms at the same time. The most popular routes and seasons are usually booked quickly. So if you start planning early, you have a better chance of getting the flight or room you want.
Even if you're not vying for a very popular date or route, booking flights in advance can save you some money (or points). For example, American Airlines and United Airlines charge fees for award tickets booked less than 21 days before departure. Delta Air Lines is known to require additional points for bookings in this time window.
6. Be flexible
This is the key to successfully booking miles and points travel. Can you leave a day earlier or later than you originally hoped? Are you ready to take an extra connection, a long stay or an unwanted Redeye flight? Can you fly from an airport farther from where you live or from an airport farther from your destination? The more flexibility you have in your plans, the greater the chance that you will successfully book your trip.
7. Pay attention to details
Airlines, hotels and banks can offer generous rewards because they know that a certain percentage of people will not take advantage of them or let them expire. Take a look at the little specification sheet that came with your credit card – there are probably a lot of things you didn't know you were entitled to do! (And if the lawyers do a little bit for you, read the summaries on travel blogs to get an overview. Remember that a small brochure is the ultimate authority.) Free tools like AwardWallet can help you find yours Use rewards before they expire.
8. Remember that there is no such thing as completely free travel
Even if you are able to cover the cost of flights and hotels with your reward points, there are always costs that you have to pay out of your own pocket, e.g. B. Transportation, meals, activities and souvenirs.
Most award credit cards have annual fees that typically start at $ 90 and up to $ 550. And since your purchases can be made just as easily with a credit card that gives you money back with a reward credit card – at least 2%, if not more – you can bet that you can use the credit card better than you can with it Money in your pocket. So do the math and make sure you find the balance you want between quality experiences and your budget.
Curious which cards I use and why? Here are some of my favorites:
- Chase Sapphire Reservebecause it offers great travel rewards and integrated travel insurance if things don't go as planned. It also offers great food rewards (3x points).
- Chase Freedom Unlimitedbecause it offers 1.5% cashback (1.5x Ultimate Rewards points) on all purchases. It is my first choice for purchases that do not earn a bonus with another card.
- Chase freedomThanks to the quarterly changing categories you earn 5% cashback (5x points) on purchases up to $ 1,500 per quarter that you activate. A great way to earn some serious points!
- American Express Platinum Cardbecause it gives me access to American Express’s wonderful Centurion lounges and allows me to credit Uber rides every month.
- IHG Rewards Club Premier credit card, mainly for the award night in IHG hotels every year (that costs up to 40,000 points), only for the payment of the annual fee.