There are countless ways to travel cheaply these days. From taking advantage of the sharing economy to finding work or volunteering abroad to finding cheap flights, traveling has never been easier or more affordable. Despite pandemic-related price increases, travel is still relatively cheap and there are plenty of great deals.
But what’s the most incredible way to lower costs even further? Points and miles.
This is something I’ve been doing for years and has earned me countless free flights and free hotel nights. If you don’t do that, you’re leaving a lot of money on the table and paying more for your trip than you should.
Here’s how to get started:
What are points and miles?
To collect points and miles, sign up for a travel credit card and collect credit card points, hotel points, and/or airline miles for free tickets, flight upgrades, hotel stays, transportation, and more. It can be converted into cash.
There are so many advanced tips and tricks out there, but many people don’t even know where to start. With all the different programs and credit cards out there, this process can seem daunting.
Which card will you get?
How do I know I’m maximizing my points?
And how do you exchange them for rewards?
There’s a lot to worry about. But it’s much easier than you think. Just adjust how you pay for groceries, gas, and dining out and start earning points and miles towards free travel today.
In this Points and Miles 101 guide, we’ll cover the basics so you can stop parting with your money and start making your travel dreams a reality.
Step 1: Know your goals
The first thing you need to do when it comes to points and miles is figure out your goals.
Are you saving up for a big family vacation?
Do you just want the odd free economy flight or hotel here and there?
Or are you interested in a major first class upgrade?
Or are you an avid traveler looking for perks like lounge access and free upgrades?
There are no wrong answers, so take your time and think carefully. If you just enter points or miles without direction, you’ll get lost.
You should do this because it will help you choose a card and spending strategy that will get you closer to your goals. There are hundreds of types of travel credit cards, each with their own advantages and disadvantages.
For example, if you fly American Airlines frequently, the best card to start with might be an AA-branded card. That way, you can not only quickly increase your points balance, but also get the perks that come with those cards (like free checked baggage, priority boarding, etc.).
If you want to fly to Europe on a United partner airline, you might want to apply for a card that earns United or Star Alliance points.
Do you always want to stay at a particular hotel chain? Get a card for that particular brand.
If you just want to use your points wherever you want, get a Chase, Citi, Capital One, or American Express® Card. This is because the points on these cards can be redeemed at various travel companies.
Once you decide on a goal, you can find cards and programs to get you there.
Step 2: Get a travel credit card
Once you know your goals and the benefits that are important to you, you can start searching for a credit card.
Here’s everything you need to know about credit cards and why they’re not as bad as society makes them out to be.
While many referral cards are free, the best travel credit cards usually have an annual fee. You want to make sure you’re always getting more value out of your card than the annual fee. If you’re a traveler, this isn’t difficult, especially if you start using a low-cost card. Additionally, if you threaten to cancel your card over the phone, they will often waive the fee for subsequent years. They often do this to avoid fees.
Things to remember before applying for a card:
No card is perfect. Each card has advantages and disadvantages depending on its purpose. Don’t listen to blogs that promote a card as “the best”.
Aim to get a card with a low annual fee and no foreign transaction fees (you can use it overseas without paying any additional fees).
Please make sure you are eligible for the welcome bonus (see details below).
Keep in mind that you will need to pay off the balance each month to make it worth it. Therefore, apply for a card only if you can repay your monthly expenses.
Ideal cards include:
Huge welcome bonuses – All the best travel cards offer sizable introductory bonuses. These welcome points will activate your account and get you closer to a free flight or hotel night. A typical travel credit card welcome bonus ranges from 40,000 to 60,000 points, but can reach 100,000 points in some cases. This is why the cards are so great. With just a little bit of work, you can instantly accumulate tens of thousands of points.
Low minimum spend – Unfortunately, these cards usually require a minimum spend for the first few months to get the nice welcome bonuses they offer. I usually sign up for a card with a minimum spend of $3,000 for 3-6 months. While there are ways to temporarily increase your spending, it’s best to use your regular, day-to-day spending to earn bonuses. Only apply for cards that allow you to meet the minimum spend to earn the welcome bonus. (Minimum spending requirements are explained in more detail in the next step.)
Category Extra Spending Bonus – Most credit cards give you 1 point per spend. However, a good credit card will give you extra points when you shop at certain retailers, use their online portals, or, in the case of branded credit cards, shop at certain brands. Masu. This will help you earn points faster.
Special travel perks – All of these travel credit cards offer great perks. They often come with special elite loyalty status and other perks. Collecting points and miles isn’t just about earning points and miles, it’s about making your life easier by having other perks on your card.
No foreign transaction fees – Credit cards are great for use abroad as they give you the best possible exchange rate. But if you’re paying fees every time you use your card, that’s not so good. There are so many cards these days that have no foreign transaction fees, so there’s no need to get a card that has foreign transaction fees.
Step 3: Earn your welcome bonus
As mentioned earlier, the most important thing when signing up for a new credit card is making sure you’re eligible for the welcome bonus. Most cards offer this bonus if you spend a certain amount within the first few months (usually the first three) of receiving the card. These benefits can be expensive, sometimes comparable to the cost of a round-trip ticket.
It would obviously be foolish to pass up the chance of a free flight, so make sure you meet the welcome bonus minimum spend before choosing a card. If you can’t meet the spending requirements, there’s no point in signing up yet.
That might mean waiting until your next big purchase (like waiting until you need a new computer, new couch, etc.) or waiting until a big holiday like Christmas or a loved one’s birthday to earn more points than you normally would. You may be able to obtain it. Expenses.
If that doesn’t work, you’ll have to get creative.
For example, when you go out to dinner, pay the bill with your credit card and have everyone refund your money. That way, the cost goes towards the minimum spending requirement. Additionally, if a friend or family member is planning a big purchase, ask if they can sign up for a card so they can earn points. This is another easy way to hit your spending minimum without shopping until you run out of money.
Step 4: Maximize spending on categories
Most travel credit cards offer category bonuses. This means that instead of earning 1 point per dollar spent when you shop in certain categories, you could potentially earn 2, 3, or even 10 points per dollar spent. The three most common are restaurants, supermarkets, and gasoline, but there are many others.
To get the most out of your points, always use the correct card for every purchase.
If you only have one card to begin with, simply place everything on that card to maximize your points. Once you start branching out and have some cards, keep track of the main category bonuses so you don’t miss out by using the wrong cards. Don’t overlook category bonuses, as earning 2x, 3x, or even 10x points can significantly speed up your earnings.
Step 5: Redeem your points and miles!
It’s time to turn your points into cash and make your travel dreams a reality! Depending on your spending and financial situation, you may have saved enough in just a few months. Maybe it took several years. Either way, it’s time to get paid! (If you want to know more about how, get this guide I wrote.)
FAQ
Now that we’ve explained the steps, we’d like to answer some frequently asked questions about collecting points and miles.
Can non-Americans earn points and miles?
That’s right! There’s no doubt that the United States has the best travel cards, but many other countries also have similar cards, including Canada, the United Kingdom, Australia, and most European countries.
Start by contacting your local airline to see if they offer branded credit cards. You can also contact your bank and ask what cards they accept. Every country is different, so you’ll have to ask around to resolve your issue.
Here are some posts to help you get started.
If I want to do this, do I have to pay the bill every month?
yes. Credit cards have hefty interest fees that eat up all the little perks you get from points. Be sure to pay off your card every month!
Can I earn miles even if I have bad credit?
That’s right! You’ll probably need to start slow with a card that doesn’t have great perks. However, as long as you pay off your bills each month, you can build up your credit over time. If you have bad credit, use a prepaid or secured credit card to rebuild your credit. This post has some card suggestions to get you started.
Will opening a new card hurt my credit rating?
Opening and closing too many credit cards at once can damage your credit. However, applying for several credit cards over a period of time won’t hurt your score. Sure, it goes down a little bit every time you get an inquiry about things like credit cards, mortgages, car loans. The system is set up that way. But as long as you space your applications out and pay your bills each month, your credit won’t suffer in the long run. I have dozens of cards, apply for and cancel them regularly, and my credit score is excellent.
Collecting points and miles can be scary, but the trick is actually to use the right credit card or two wisely. You don’t need to do anything more than that. You can dig deeper into the game (some people really go down the rabbit hole with this!), but it’s not really necessary.
Don’t leave money on the table. Get your card, get your welcome offer, maximize your points and try again. Ultimately, you’ll be able to achieve your goals and enjoy great travel perks without unnecessary expenses.
Matthew Kepnes is a New York Times bestselling author and owner of the award-winning budget travel site Nomadic Matt. His writing and advice have been featured in The New York Times, The Guardian, Time, and countless other publications. He also speaks regularly at travel industry and consumer shows. When he’s not out and about, he can usually be found in New York City.
