Frequent Miler made a couple of posts with a basic guide to determining whether a booking is worth it when you use your points. His advice is pretty good, and presents good guidelines to figuring out if you should use points or not. However, it is also important to keep your goals in mind. If your goal is to minimize out of pocket expense of any kind, and you have earned your miles through signup bonuses (as opposed to regular credit card spending), then it’s perfectly acceptable to redeem awards that are “not worth it” by the guidelines presented.
There’s a couple of posts about credit cards today. View from the Wing writes about how the American Express Starwood Preferred Guest (SPG) card has been a long time favorite and Million Mile Secrets writes about the United MileagePlus Explorer card and the Continental OnePass card, specifically what your strategy should be right now for applying/cancelling the cards.
I highly recommend the View from the Wing article, because it is the same credit card strategy that I follow, and that I think most people would agree with. The AMEX SPG card was actually the first affinity program card that I applied for, my ‘gateway drug’ into collecting miles if you will. When I applied for it, I decided that I wanted a good hotel chain credit card, because I’d noticed that whenever I take vacations, my biggest spending generally seemed to be hotels, rather than airfare. While airfare to international destinations can be quite expensive, and it is great to earn miles to get that for free, staying at hotels can add up to be much more than the airfare. So I decided it made sense to start collecting hotel points, and I had heard the SPG card was considered one of the best all around travel cards.
Interestingly enough, I soon learned that it wasn’t considered a great card just because you could use the points to stay at Starwood (Westin, Sheraton, W, St. Regis, Le Meridien properties, among others, are all under Starwood). I mean, there are great redemption options, even for a hotel program. You can often get 2 cents of value from each SPG point just redeeming for rooms, but they also offer points and cash rewards, where you use fewer points but pay a co pay (typically $25-$50), and various free nights promotions if you use points for so many consecutive nights. However, you can also transfer your SPG points to over 30 different airline frequent flyer programs (generally at a 1:1 ratio, with some exceptions such as United/Continental), and for every 20000 SPG points that you transfer, you get a 25% bonus. Now the card only earn 1 points per dollar, except at SPG properties, but it is still considered one of the best values for general credit card spending.
The programs that offer flexible award redemptions are currently “in”, as you can see from the View from the Wing post. The other cards that he uses/recommends are the Chase Sapphire Preferred card, which is linked to the Chase Ultimate Rewards program (which allows transfer to United, BA, Hyatt, Priority Club, among others), and the American Premier Rewards Gold (or Business Rewards Gold) card, which is linked to the American Express Membership Rewards program. The Amex cards generally come with steep fees, (the gold card has a $175 fee which is waived for the first year), but I think they are worth it for access to Membership Rewards, and in the case of the gold card, the 4X points on airfare, if you book a lot of airfare on your own credit cards.
At any rate, I recommend reading through both of the linked posts, and applying for some of these cards if you haven’t already! As long as you can make the minimum spend (of there is one), it’s perfectly acceptable to apply for both an American Express and Chase card simultaneously to jump start your mileage accounts. Not only that you could apply for the business versions of any cards that you apply for, and your applications will be considered (and approved if you are creditworthy).
On a side note…I decided over the weekend to go “all in” on the AA DEQM (TEQM for IL/TX and CA flights). I’ll make a separate post about that, but the gist is, I’ve booked 9 roundtrip flights on AA in the month of January, all on weekends no less! it’s gonna be one hellish month of flying, but hopefully i’ll get 70-80k for EQM on AA, and be well on my way to executive platinum status with them.
at least until a better promo comes along, is AA’s announcement of double EQM (DEQM) for all flights/fares now until January 31, 2012. The gist of this is that on all flights, you get twice the miles in your account, and they all count towards elite status. So low level elite status can be obtained by flying 12, 500 miles in the month of January, and the highest elite level requires only 50,000 miles. See this post at View From the Wing for more info. The most intriguing take on this was from lucky at One Mile At A Time, who outlines how easily you can qualify for top tier AA status under this promotion over several days of flying. It is pretty extreme, but being able to get top tier status on AA seem well worth it under this promotion, and it is quite tempting to me…
At any rate, I do recommend reading that article, even if you aren’t planning to be a hard core mileage runner. It shows the value of being aware of your promotions and stacking them together, as well as the amazing wealth of knowledge that some of the old timers in this game have 🙂
On a side note, there has also been some speculation that this offer will be matched by UA/CO, as they share several hubs/markets with AA, and will not want to lose business due to this promotion…for now, that is pure speculation though.
This post is long overdue, but hopefully you’ve all already figured somethings out. In this post, I’m going to outline the steps from The Points Guy’s Beginner’s Guide.
Step 1 – Sign up for programs
The obvious – if you haven’t already, sign up for the loyalty programs for any airlines/hotels that you currently frequent. TPG’s Beginner’s Guide contains a huge list of links to all the different programs out there (no guarantees it’s comprehensive, but there’s a lot). While the guide suggests signing up for all the programs, I personally think you should only sign up for the programs that you will participate in actively and/or do promotions for now or in the near future. One reason is that programs sometimes off signup bonuses at random times, for example, the current AAdvantage code (detailed here, ack: View from the Wing) that will give you 500 bonus miles for entering the code. Another one that I know about is for Aegean Airlines, who is offering 1000 bonus miles for signing up (it’s been there for a while). Fun Fact: Aegean is probably obscure to most of you, but they are a Star Alliance member, and their claim to fame is that you only need 20,000 status miles (EQM) on them to earn Star Alliance (*A) Gold, for which the primary award is lounge access to all *A lounges (as well as free checked bags, increased baggage allowance, priority lines, priority boarding, etc.).
Anyway, these signup bonuses are generally no more than 1-2000 miles, so it’s not really the end of the world if you miss out on them, but every little bit counts! At first, you’ll probably want to focus on a few programs, especially ones you use, but as you learn more, and get comfortable with credit card applications and promotions, I generally recommend that you start participating in more programs (even if you never travel in them). The point of collecting a wide variety of miles is so that you will always have plenty of options wherever in the world you may travel.
Step 2 – Use a service to manage your miles
Since you just created a few (or possibly many) accounts, you will want a way to track all these accounts. You can keep track of your account information in email or spreadsheets, but there are various services out there that will take your login information and track your miles for you as well as their expiration dates. The current favorite seems to be Award Wallet. Do sign up there, and provide your login information for all of your accounts. Award Wallet even allows you to log into your account at the airlines/hotel’s website by clicking on the program name in your list of balances.
The most basic version if Award Wallet is free, but it only shows you the expiration for up to three of your accounts. It is highly recommended that you upgrade to the paid version of Award Wallet, 1) to see all of your account expiration dates, 2) it’s an immensely useful service that the developers work very hard on, 3) you can name you own price. That right! They allow you to pay as much as you believe the service is worth to you 🙂 For a full list of the differences between the free and paid Award Wallet, see here. As of this writing, Award Wallet claims to support 425 loyalty programs. The programs they support goes way beyond airlines, hotels, and rental cars…
Step 3 – Jump start your miles collection…
with credit card applications! 🙂 There’s pretty much an infinite number of directions to take this one. TPG lists some of the top recommended cards under step three of his guide, and I think he’s spot on 🙂 Some of the cards he lists are the
- Chase Sapphire Preferred
- American Express Starwood Preferred Guest Card
- American Express Premier Rewards Gold Card
There are various great offers, and these offers change continuously. However, the three cards that I have listed above are considered to be the best programs to participate in, because they all have flexible transfer options to various airlines or hotels.
Most of the bloggers that I have listed maintain their own list of current top credit card deals. For example, check out the best offers at View From the Wing
In addition to these three cards, you may want to consider applying for a card for your program of choice, if there is a signup bonus that is 40,000 or greater. I personally think that most airline cards aren’t worth using for every day spending, and that you should be using the three cards listed above for every day spending, but some airline cards require a minimum spend (i.e. spend $X00 within X number of months).
Be careful when applying that you can indeed spend the required amount on all the credit cards you apply for within the given time limits. There are many tricks (some have evolved and or died over the years) to helping you make minimum spends, but try to put everything you spend on a credit card (spending cash is just leaving points on the table), and use gift cards to make up for the rest of the minimum spend, if needed. See this post for more information on making your credit card minimum spends.
I think that is probably enough information for you all, but if you aren’t completely overwhelmed, do check out the rest of TPG’s Beginner’s Guide. There’s a few more points (no pun intended) about using the various mileage dining programs, bonus shopping malls, and following the lates deals and promos. I’ll try to write about each of those topics in the future. Please do let me know if there is anything you are particularly interested in reading about.
Happy collecting! 🙂
P.S. Now that you’ve gotten through all this, now would be a good time to start dreaming how to use your points 🙂
All right, I’m gonna start with the basics. Note that I have included this article in the Beginner’s Guide section if you ever need to refer back to it. I apologize in advance for the long post, but there’s so much information to share! Before I start, I would like to provide this glossary of frequent flyer/traveler terms: http://www.flyertalk.com/glossary/
I actually just discovered this glossary, but it is pretty useful and complete, in case you ever need to look up a term or acronym.
What ARE frequent flyer miles?
Frequent flyer miles are points that are awarded by nearly (if not every) airline on the planet, in some form or another. With most of the major airlines (also known as legacy airlines, including Delta, United, Continental, American), for every flight you take, if you provide your frequent flyer number (or a frequent flyer number for an airline in the same alliance or in a partnership, more on this later), the airline will credit to your frequent flyer account the number of miles that your flight was. Some airlines, such as Southwest, JetBlue, and Virgin America, don’t credit you based on mileage, but they use a system know as a “revenue based” system, which means that the number of miles/point/credits you earn is based on how much you spent for your flight. By and large, these revenue based systems are not as lucrative for the frequent flyer mile collector seeking to redeem for premium class travel. There are exceptions, and these airlines have some partnerships with certain legacy airlines that are sometimes good redemptions, but we’ll save that discussion for another day.
So, what is the point of accumulating these frequent flyer miles?
These miles are loyalty programs, intended to get you to always fly the same airline. OK, that’s more for the airlines’ benefit, but what’s in it for you? Generally, these miles can be redeemed for award tickets. Generally, on the US legacy airlines, a domestic, coach class award ticket can start as low as the 15,000 range, and more typically will cost you 25,000-50,000 miles. Therefore, you could have all your domestic flights for free if you were able to collect enough miles. A United States transcontinental flight (sometimes you’ll see this abbreviated as transcon) will generally generate just shy of 5000 miles, so if you are avidly collecting miles, you could in theory fly across the country for free roughly every 6 trips (of course, subject to travel dates, award availability, etc. etc.).
But what if I want to fly elsewhere?
You’re in luck, miles can be used also to travel internationally. Each airline has its own award chart, which dictates how many miles it costs to fly from each location to another. For example, see this page for links to the United Mileage Plus award chart for United and to the United Star Alliance (partner) Award Chart (that’s the award chart for using United Miles on other alliance members). You’ll notice the award charts also include booking fares for international and first class seats for miles. This is where, if you are interested in traveling in style in premium class, you can get the most bang for your mile. Typically, international business and first class seats are in the 100-150k mile range, of course depending on which airlines’ award chart you’re looking at and what your origin and destination are.
Well, how will I possibly ever accumulate 150,000 miles?
Most people do not fly anywhere close to 150,000 miles in 5 years, let alone a single year. However, there are many ways to earn miles. with the biggest one being credit card signup bonuses. I’ll have a future post about this, but basically, many airlines offer co-branded credit cards with the major banks (Chase United and Continental, Citi AAdvantage, AMEX Delta, etc.), and when you sign up for these, you generally can earn at least 25k bonus miles (ranging up to 50k and sometimes even 100k!). There are also several credit card affinity programs that allow you to earn points that can be converted to miles or allow you to spend the points for travel (usually valuing the points at $0.01 each). I’ll be writing about this very soon, because there are currently several excellent offers on American Express card that are available for only a limited time.
Before you get carried away with applying for credit cards, I would like to add a caveat. Playing the credit card side of the miles requires you to have a good credit score (at least 700, or close to that), and to be able to maintain that score (i.e.always paying your bills off on time, in full). IF you have trouble with either one of these, and/or you are planning, in the next two years, to make a major purchase involving a credit check, DO NOT dabble with credit cards. It’s more important that you be able to secure the best rate for your car loan, home mortgage, or whatever else you may be buying.
And even if you do play the credit card game, don’t go off applying for everything…generally, each bank will only allow you 3-4 credit cards a year, and they will not accept more than 1 application ever 30 days (sometimes 60). Therefore you have to be a bit selective on which offers you jump on, and go for the ones that present the best value in your particular situation.
Anyway, back to Frequent Flyer miles…
So one question that I have heard several times, is people lamenting the fact that they can’t earn useful miles on their flight because they collect United Mileage Plus miles, but they’re flying US Airways (or Continental). However, you CAN earn miles (even elite qualifying miles, or EQM, more on that in a moment) by flying on carriers in the same alliance. I’m only going to scratch the surface on this topic, but there are three major alliances operating in the US (actually, probably the world too):
- Star Alliance (sometimes abbreviated as *A, not to be confused for A* search) – includes United, Continental, US Airways, Singapore Airlines, Thai Airways, ANA, Lufthansa, and more. This is the largest alliance in the world.
- OneWorld (creatively abbreviated as OW) – includes American Airlines, British Airways, Cathay Pacific, and more.
- SkyTeam – Includes Delta, AirFrance/KLM, and other airlines, but this is generally considered the weakest alliance.
So, next time you’re not flying you’re usual carrier, do check if you can possibly credit your miles to another carrier’s account in the same alliance. And if you don’t have any miles with that alliance, you should consider opening an account with one of the carriers. One of the key tenets to follow is to always collect miles, and to accumulate miles in as many brands/alliances/chains as possible, because you never know when they’ll come in handy.
Last but not least…elite status?
So generally, as you accumulate EQM with a single frequent flyer program, you can earn elite status if you earn enough miles in a single year. Most of the airlines have elite levels at 25k miles, 50k miles, and 75k/100k/125k (top levels vary by program). You can also earn elite status through segments, which involves counting every flight you take. This might be the way you qualify if say you take many short trips within or near California or Texas. You generally don’t fly much more than 500 miles on these trips, but you can qualify for low-level elite status at less 50 segments.
The benefits of elite status generally include waived baggage fees on at least one bag, priority lines for check-in and sometimes security, and the potential to get free domestic upgrades to first class (I believe AA is an exception on this one). Note that ONLY elite qualifying miles (EQM) earn elite status and these are generally miles flown butt-in-seat (BIS). Most of the time, credit cards and other methods of earning or purchasing miles will not qualify you for elite status (though there are some exceptions). Airlines also sometimes run promotions where you can earn additional EQM on flights, usually it will be flight on certain routes that allow you to earn double or even triple EQM than normal.
Anyway, I think I’ve bombarded you all with enough words and acronyms for one sitting. Thank you for reading, to everyone that made it this far. And please feel free to post any questions in the comment section, or email them to firstname.lastname@example.org.
Until next time!