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Our last lesson focused on how to get the most rewards possible with your travel rewards credit card. But I’ve always been a proponent of making sure that my how is aligned with my why.
I figured out my Why of FI — being present for my family, being able to use the world as our classroom, and being able to work from anywhere. From there, I figured out the various FI levers to pull. It’s the same with travel rewards.
So, be intentional and let your Why of Travel drive your card strategy, rather than manically stockpiling points without a clear objective.
Once you’ve figured out your Why, you’ll want to figure out your Wheres.
Yup, Wheres, plural.
Don’t worry about free hotel nights for now, because you’ll need to start with airline redemption availability. After all, getting there is the first part of trip planning.
You already know your nearest major airport, but you should also figure what other major airports are nearby in case you have to go to these airports for an almost free ticket. Remember, flexibility is key to maximizing your miles.
Next, use Google Flights to find out which airlines fly from your nearest airport to various destinations that you have in mind, and also, get a sense of how much it would cost if you were paying cash. Note how many stopovers there might be, if any.
Another useful bit of detail you should know about the airlines that serve your airports is if they belong to any of the three major airline alliance networks. We’ll cover this in greater detail in a future lesson, but the three major alliances are Star Alliance, Sky Team, and One World.
This is useful to know because you can redeem your miles from one airline on an alliance partner. One example is using Singapore Airlines Krisflyer miles to redeem for a flight from Los Angeles to Honolulu on United Airlines, even if you have no United miles.
Once you have all this information, you can start to hone in on the airline loyalty programs that will serve your travel plans, as well as the type of miles and points to focus on earning
Next, you need to know with whom you will be traveling with, because that will determine how intensive your points earning strategy will have to be.
Here are a few things to be aware of:
Once you figure out the airlines you’re targeting, it’s time to decide how to amass the points and miles necessary, and what credit cards to focus in on.
There are at least six main ways to build a stash of miles for flight awards.
Here’s my list in order of most preferred to least preferred:
Chase Bank, American Express®, Citibank, and Capital One® all have their own travel rewards "currencies" that are highly flexible in how you use them for travel.
The best option is to build a stash of these flexible currencies. These can be traded in for points with an airline or hotel transfer partner, which is usually the best way to extract the most value from your points.
We’ll dive into these flexible currencies in the next lesson.
For now, the key takeaway is that these flexible points are the preferred currency to have, and of the four, Chase Ultimate Rewards® is our favorite currency, followed by American Express® Membership Rewards®.
For instance, here are the banks the big US carriers partner with:
This is the second-best option since the miles in here cannot be transferred out to multiple partners, so you have less flexibility. That said, they can get you flights on other airlines in that alliance, which we’ll discuss below, in Option 5.
It’s common for cards to offer a large number of points when you sign up for a new card and follow certain requirements, such as spending a certain amount in a certain time frame.
But category bonuses should not be overlooked.
Category bonuses are when cards offer extra points on certain categories, such as 2x points at restaurants or gas stations, or 5x at grocery stores.
You will not be able to amass miles in the same large amounts as signup bonuses, but category bonuses will add to the stash faster than normal spending at regular earning levels.
For instance, with my favorite card, the Chase Sapphire Preferred® Card (This card is not currently available on CardRatings) you earn 2x Ultimate Rewards® points on restaurant and travel spend, which is pretty neat.
The information related to Chase Sapphire Preferred® Card has been collected by CardRatings and has not been reviewed or provided by the issuer of the card.
The American Express® Gold Card is another favorite, with its 4x Membership Rewards® points on spend at U.S. supermarkets at the time of writing.
These fixed value currencies tend to be worth one cent per point, and basically let you wipe out travel expenses from your statement.
They are useful for paying travel expenses not covered by major award travel programs, such as cruises, trains, and taxis, and Airbnb, or when redeeming miles is just impossible due to peak travel periods.
One example is the Capital One® Venture® Rewards Credit Card .
Another great feature of fixed value currencies is that they are simple to use and you do not need to wait until you have amassed enough points or miles and then transfer them to your desired airline program.
Instead, just buy the ticket, and then take your time to earn enough points to erase that spend up to roughly three months later.
If you are having issues earning miles on your desired airline, you can still get flight redemptions on that airline by building up a stash of miles with its alliance partners.
Just continue to earn miles on that partner airline, then redeem it for a ticket on your desired carrier.
For instance, if you are having a hard time accumulating miles on American Airlines, but have earned a big stash of British Airways Avios, you could redeem flights on American Airlines.
The jargon for that is redeeming British Airways miles on American “metal.”
This used to be a great value, but in 2018 Marriott devalued many of its programs, including the redemption of Marriott points for airline miles.
It’s still an option if you have Marriott points to burn, but for most people, this strategy should be avoided.
One exception is to trade Marriott Bonvoy points for Alaska Airlines’ Mileage Plan. That is still a good value because of how valuable Alaska Airlines Mileage Plan miles are.
Your actionable takeaway for this lesson is to take Google Flights for a test flight, get good at using it to figure out which airlines serve the destinations you want, and the cash price of those flights.
You’ll need to know these to start checking out redemption flights, and to figure out if those are a good use of your miles and points.
Now that we’ve laid the groundwork of figuring out which airlines we want, let’s find out a bit more about the various flexible currencies so we can lock in on the credit cards we want to start with.
If you found this course on travel rewards helpful, you may also enjoy this free illustrated guide, packed with many other ways to get more for your buck and win back your financial independence.
Course content originally produced by ChooseFI was edited/updated by CardRatings for this lesson.