“You don’t have to travel, but I find extended travel to be a helpful tool for reexamining yourself and the constraints you’ve artificially placed on your life. It’s easy to believe everything has to be done one way if you’re always in one place around the same people.“
Earning Hotel and Airline Points and Miles
This blog was written before the COVID Pandemic. The COVID epidemics played havoc on the travel business. In 2022, Fifty Plus Nomad decided to focus on traveling and living in Mexico and language learning posts. We will only update these long-term travel-related posts on a time-permitting basis. We would appreciate your comments and updates on these posts.
Frequent flyer and hotel loyalty program design and rules vary between countries greatly. This post addresses frequent flyer and hotel loyalty programs in the US only. I welcome comments about how these programs work outside the US.
An Introduction to Frequent Flyer Points, Miles, and Other Travel Loyalty Point Programs
Thousands of travel companies have frequent-flyer and other loyalty programs. Many of the companies that have loyalty programs also have a deal with credit card companies.
No industry uses loyalty programs and airline-branded credit cards more than travel. (The travel industry needs to keep a constant turnover of clients to fill their rooms, plane seats, and hotel rooms).
You can find loyalty programs and credit cards associated with nearly every hotel chain, airline, and rental car company. There are even branded credit cards for shared economy companies like Uber and Airbnb.
However, most loyalty programs and branded credit card companies link to hotel chains and airlines.
Some travel credit cards are not associated with a particular travel industry brand, including Chase Sapphire Preferred and the Capital One Venture Rewards card. Frequent Flyer Points earned using these credit cards can be redeemed either directly for purchases you make through an online travel website (sometimes called a portal), or you can transfer the points to many different airlines or hotel programs.
What Are Frequent Flyer Points and Miles?
Frequent Flyer programs are the name for airline loyalty programs. Most airline loyalty programs allow you to earn and redeem points for flights and other related activities on the airline and the other airlines in their alliance.
Most Fifty Plus Nomads in the US should consider joining (and applying for airline-branded credit cards) from the three major airline alliances. The alliances are;
- Star Alliance. Click here for a list of members. The major US airline is United.
- One World. The major US airline is American. Click here for a list of members.
- Sky Team. The major US airline is Delta. Click here for a list of members.
Most of the time, you can earn and redeem frequent flyer points using any airline in these alliances. For example, if you fly on Air Canada, you may receive points on your United Mileage Plus account (both members of the Star Alliance). You can also redeem points from your United account for flights on Air Canada.
However, a few airlines, like Southwest Airlines, are NOT part of alliances. (For more information about alliances).
Generally, once you have accumulated a certain number of frequent flyer points (or miles), you can exchange these points for airline tickets, a hotel stay, or other benefits.
The term Frequent Flyer miles is somewhat misleading nowadays. Forty years ago, when airlines started to offer Frequent Flyer Miles, you got one mile usually either for:
- Each mile that you traveled on a given airline.
- Every dollar you spent using an airline-branded credit card.
How Do You Earn Frequent Flyer Points or Miles?
Nowadays, actual miles flown do not matter that much. Instead, the number of frequent flyer points (still sometimes called miles) you earn in a frequent flyer program counts.
The number of actual miles flown counts ONLY toward determining if you are eligible for “elite status.¨ (Also known as elite qualifying miles, or EQMs).
Elite status entitles you to free checked bags, priority boarding, priority screening, lounge membership, international upgrades, and more. It is also possible to gain elite status through other activities on many airlines. However, you need to spend so much money that I doubt that many Fifty-Plus Nomads will achieve elite status unless they fly a lot. (Often as many as 250,000 miles on the same airline).
Instead of earning points based on miles flown, you earn frequent flyer points based on what you paid for the airline ticket. Typically you get five points for every dollar spent purchasing a ticket.
If, for example, you paid $200 (before taxes and fees) for a one-way ticket between Los Angeles and New York, you will receive 1000 points for the ticket. ($200 times 5 points for each dollar spent= 1000 miles).
Unless you buy high-cost airline tickets, you usually get nowhere near as many points as the number of miles flown on the route. (The actual miles flown between Los Angeles and New York is 2461). You typically get two points for every non-ticket, airline-related purchase such as onboard drinks and food, baggage fees, etc.
Few travel hackers earn the bulk of their points on actual flights. There are many other ways that you can earn frequent flyer points. The rules for earning these points are complicated and continuously changing.
Some Common Ways to Earn Frequent Flyer Points and Miles
Here are some of the most common ways to earn frequent-flyer points:
Airline-Branded Credit Cards
Most travel hackers get more frequent flyer points from airline-branded credit cards than any other activity.
The points come from sign-up bonuses and purchases made with these credit cards.
You usually get enough points to buy an airline ticket when you sign up for an airline-branded credit. You will, however, have to spend a certain amount of money on an airline-branded credit card to get a sign-up bonus. (The amount of money varies. The most typical requirement is between $3000 and $5000 in three months).
Airline-branded credit cards provide other non-point-related benefits, including:
- No conversion fee when you buy something with a foreign currency. (Many credit cards charge you a three percent conversion fee).
- Free check-in for your first bag. (Otherwise, you will pay $25-$30 for your first bag).
- Boarding the plane earlier than most other passengers. (Boarding early makes it easy to stow your carry-on baggage).
Airline-branded credit cards allow you to trade points for flights on a given airline AND their partner airlines. You also get points when you fly these partner airlines. Access to these partner airlines is often the most significant benefit of using airline-branded credit cards, especially if you fly a lot internationally.
All airline-branded credit cards have annual fees. (Usually around $100 a year). Airlines offer credit cards that provide access to airline clubs. These cards are more expensive. (Usually between $400 and $500 a year). In addition to club access, these credit cards usually allow you to accumulate points faster than the other cards and sometimes come with a hefty initial sign-up bonus.
Frequent Flyer Accounts and Other Ways to Earn Miles and Points
You do not have to have an airline-branded credit card to receive airline tickets and other travel benefits. Some credit cards provide cash back or allow you to use points for tickets on hundreds of airlines.
Besides, you can receive points for taking airline flights just by signing up for a FREE Frequent Flyer account. Signing up can be done quickly online. Also, most airline personnel can provide you with sign-up information. After signing up for a Frequent Flyer account, you can apply for mileage credit for flights you have taken. Usually, you can get credit for trips taken somewhere between three months and a year after your initial sign-up date.
Pay Off Your Credit Card Every Month
Finding a credit card without a fee and lower interest rates is not hard if you have decent credit. Many airline-branded credit cards charge interest rates between 15-20% a year and high annual fees. Be careful to pay your airline-branded credit cards off every month.
Assuming you, like most Americans, carry a $6,000 balance on your card, you will pay approximately $1000-$1500 more per year in interest and fees using airline credit cards. (Note: the 6000 Frequent Flyer miles you will get from spending $6000 on a credit card will only save you approximately $90 on a future flight.