Saving Travel Dollars with Loyalty Programs

Being careful with money got me to Patagonia, Chile in 2011.

Right or wrong, I’ve more or less given up on airline loyalty programs. Airline points are cumbersome to claim, monitor and trade in – especially when I’m flying on a partner airline rather than my regular airline.

Instead, I focus my loyalty program savings on my credit card. Yes, I still collect what points I can from airlines so that I can combine airline points and credit card points to max out my benefits. But my focus is to get the best deal on a flight first and use points  (airline or credit card) as it makes sense to do so.

Full disclosure here, I’ve been sponsored by Scotiabank to test drive the new Scotiabank Gold American Express Card (available in Canada). I accepted this assignment because over the years I have only been frustrated by airline loyalty programs and have turned to credit card programs instead. And I believe strongly in the value of this card. It saves me travel dollars so that I can travel more.

So, in this post, I’m going to talk about point systems in general (airline and credit card) and this card specifically. I think you’ll find it valuable.

My trip to India generated loyalty points.

What I haven’t traditionally liked about airline loyalty programs:

  • Often, only part of the cost of flying is covered. The points that I have only cover the cost of the actual flight. Airport taxes, fees, and surcharges imposed by the airline and any government authority must all be paid by me. Under these circumstances it certainly doesn’t feel like a free flight.
  • If the airline is having a sale, the cost of a flight in points remains the same. I can’t take advantage of the sale with my points.
  • There are blackout periods, so I can’t always fly when I want to.
  • To redeem points, I must have all the points required for a purchase. It would be helpful to reduce the cost of a flight by using just some of the points I’ve accrued. I can’t do this with my airline loyalty program.
  • There are administrative hassles. When booking on a partner airline, I usually have to claim my points after the flight with my boarding pass. It’s irritating.
  • Points expire with time. Though this may not apply to me because I travel so frequently, points expire if an account has not been used either to accumulate or spend points in a 12-month period.

Since it’s better to have the points than not, I still collect airline loyalty program points but I consider them a surprise bonus when they are actually useful.

My trip to Park City, Utah was partially paid for by points.

The benefits of a good credit card loyalty program:

In contrast to the issues above, there are a number of things I really like about credit card programs. Here’s why the Scotiabank Gold American Express Card is currently my go-to card:

  • You can redeem points for all aspects of your trip – including taxes and surcharges – or use them for part of your trip and pay the rest on your card.
  • If you find a great deal online or with a travel agent, you can buy your entire trip with the card and then redeem your points to cover your purchase. And – this is great – as you buy your trip you are actually earning more points you can use to pay for future trips.
  • There are never any blackout dates and points never expire.
  • You don’t have to buy travel. You can use your Scotia Rewards points for new luggage or an unlocked phone or a camera. You can also redeem points towards a huge selection of brand-name merchandise.
  • You can use points to create a credit balance on your card for spending as you travel. I really like this benefit.
  • The card comes with Travel Emergency Medical Coverage, Trip Cancellation and Trip Interruption Insurance, Flight Delay Insurance, Lost Luggage and Delayed Luggage Insurance, Hotel/Motel Burglary Insurance, Rental Car Collision/Loss Damage Insurance, Common Carrier Travel Accident Insurance, Retail Insurance: Purchase Security and Extended Warranty and Price Protection.

The common thread through all these benefits is that the loyalty program is flexible. I choose the rewards that are right for me, when they are right for me.

More about this card:

Scotiabank is the only Canadian bank to offer American Express cards. The Scotiabank Gold American Express Card provides four points for every dollar spent at eligible gas stations, grocery stores and on dining and entertainment. You earn one point for every dollar spent on purchases everywhere else.

You must redeem an initial minimum of 5,000 reward points when making travel redemptions, but following that you can redeem any number of points you have accumulated in any increments.

The annual fee is $99 and the interest rate is 19.99% on purchases and 21.99% on cash advances.

Planning and dreaming. What should I do with my points?

It’s been a very busy year of travel and now I’m starting to think about next year. In 2011 I went to Chile. Last year it was India. Where should my big trip be this year? It is to this trip that I will dedicate my points.

What do you think? Please make your suggestions on where I should go in the comments below. The planning and dreaming is half the fun.

A word to the wise

Credit cards must be managed carefully. Carrying a balance can negate the benefits of using a card and accumulating points. I consider it essential that I pay off my credit card on time every month.

  • Travelbug1

    I try to collect Air Canada points …….. but it ticks me off that I have a certain amount of time now to use the points or lose it. And I don’t frequent fly like most people. That’s soooooo annoying. I have a MasterCard where I collect points …….. to save a bit on groceries so I pay my trips that way. I vacation one a year, maybe twice. Wish I can afford to go more, but I feel lucky to have seen a lot of places anyway.


    I also find it frustrating that there are limits to the way you can use your loyalty points. Even worse when the airline will be happy for you to pay full price with a competing airline because its cheaper, despite trying to stay loyal to the one you have points with.