Cracking the Travel Points Code
Brian Kelly is known as The Points Guy. His passion and expertise is redeeming frequent flyer miles and points for travel. He’s been doing it as a hobby for years – jetting to the Seychelles in business class … sitting behind Madonna in first class. He’s often stayed in luxury suites at less cash than a hostel. He’s been funding his lifestyle by maximizing the value of frequent flyer miles and points and his goal is to help more people do the same.
Travel points can be redeemed for much more than just flights- nowadays you can cash in your hard earned points for hotels, rental cars, gift cards, magazines and just about any type of merchandise you can think of.
But what is the best redemption?
It’s hard to make a blanket statement, because different people have different needs. For example, it might make more sense for a family of four to redeem four coach tickets instead of first class. The absolute return on points might not be as high as if they redeemed for first class, but the money saved increases greatly.
The Best bang for your points.
In my professional opinion, the best bang for your point is the following:
- Airline miles: Redeem for flights or upgrades. Some airlines make upgrading much cheaper than others. Most have surcharges and limit upgrade space, so make sure it is available before deciding to go that route. Also make sure to check partner availability. For example, if you have American Airlines miles, you can redeem those miles for British Airways flights- except they won’t show online- you have to call or do research online.
- Hotel points: Are best used to redeem for hotel nights. Many people underestimate the cost of lodging when traveling and focus only on flights. Redeeming for hotel nights can save you a lot of money, especially when traveling in Europe or in major cities like New York and Tokyo. To stretch the value of your points, try using a mixture of cash and points- Starwood and Priority Club both have that feature and it can increase the value of your points. Also, many chains, like Marriott and Starwood, give the fifth night free when using points. With respect to transferring hotel points to airline miles, that generally makes the most sense with Starwood points because they transfer to 20+ airlines, most at a favorable 25% bonus for each 20,000 transferred.
- Credit card points: Many credit card points, like Capital One No Hassle Rewards, simply give you 1 cent per point towards any airfare. However, there are programs like American Express Membership Rewards which give you the same option, as well as the ability to transfer to your frequent flyer account. American Express points are most valuable when transferred to airlines, especially when there are bonuses like special promotions.
How do you possibly keep track of all of your points?
AwardWallet.com [ed. note: this company helped organize this post] is a robust, secure system for managing points. Beyond just keeping track of your balances, AwardWallet also monitors the expiration dates on your programs, alerts you about key promotions and tracks changes to itineraries. It’s a must-have service for anyone who collects points.
If you need to beef up your points balances, credit cards can be a fast way to get you on track to an award. There are many to choose from, but I recommend those that come with a hefty sign-on bonus and waive the first year fee. Current “hot” deals are the 50,000 point British Airways card and 50,000 point Continental card. Neither credit cards have an annual fee in the first year and both do not charge foreign transaction fees. For Canadians, the 20,000 point Aeroplan Gold Card is a good option, but has a $120 annual fee.
So what happens when you’ve accumulated a nice stockpile of awards and you are ready to redeem? Your best bet is to research your options and arm yourself with information. Most travel agents will not help you book an award using your points, but there are professional services, like The Points Guy, who will save you hours of research and frustration and do all of the planning for you. These services start at $100 per ticket, but can save you thousands and help you realize the maximum possible value for your points.
In general, don’t believe the myth that frequent flyer miles and travel points are worthless- they can be extremely valuable, but you need to manage them like assets and redeem them wisely.