Throughout this series of posts I’ve argued that miles and points are useful not only for free travel but also for freeing up money you would otherwise have spent on travel. To maximize your savings, there are two basic considerations. First, earn the most miles and points for the least expenditure of time and money. Second, redeem miles and points for the most value.
My advice on earning the most miles and points is straightforward. Go for Chase cards first (provided you have opened fewer than 5 cards in the previous 24 months). Then, open the most lucrative signup offers on my Best Credit Card Signup Offers page.
To optimize your redemption of miles and points, consider these guiding principles:
- Programs Typically Favor Themselves: For airline miles and hotel points, you will usually get the best value by redeeming them for flights or hotel stays, respectively, in the program itself. For example, you can redeem Southwest points for gift cards. But you will get the best value from those points by redeeming them for Southwest flights.
- Look for Outsized Redemptions: There are exceptions to Rule #1, however. For instance, some would argue that Starwood Starpoints are more valuable when transferred to some of Starwood’s airline partners. Before redeeming points, Google “best use of XYZ points,” where “XYZ” is a program name like “Starwood,” “Hilton,” or “United.” Such research is especially beneficial in the case of the transferrable points programs: American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou Points, Diners Club, and Starwood. Most people would have no idea that transferring Citi ThankYou Points to Singapore Airlines can net you significant value on many United flights. Googling “best use of City ThankYou Points” quickly turns that up.
- Compare with my Point Valuations: I have put together the most comprehensive list I am aware of for the value of points in the various airline, hotel, and transferrable points programs. You can find that list in the second tab of my Beset Credit Cards Signup Offers table (see image below). I use the list to help determine the value of credit card signup offers and will update it regularly. You can consult it to get a sense of the value you can get when redeeming your points. Let’s say you are booking a room at a Hyatt where you could either pay $225 or redeem 10,000 points. For that redemption, the points are worth 2.25 cents apiece (i.e., $225/10,000). At the time of this writing, Hyatt points are worth about 1.73 cents apiece on average. So your 2.25 cents apiece redemption is very solid. In general, if your redemption value is near or higher than the “Cents / Point” value I provide in that table, you’re getting good value.
Two notes before I close.
When do Bonus Points Post?
A reader asked me when one actually receives the signup bonus points earned. It’s a good question because, after all, you can’t use the points until you get them!
Each card will spell that out in its offer details. Usually, the language used is a very conservative estimate of when you will receive your points. Take the Southwest Premier card, for instance. The offer details say, “To qualify for your bonus points, you must make Purchases totaling $2,000 or more during the first 3 months from account opening. Please allow up to 8 weeks for bonus points to post to your Rapid Rewards® account.” That makes it sound like you need to wait three months and then 8 additional weeks to get your points.
In practice, I find that points typically post within days after you pay the bill for the statement in which you meet the minimum spend. To expedite the process, I like to meet the minimum spend and then pay the bill off early in an effort to get the points to post right after the statement closes. I’ve even heard successful reports of people meeting the minimum spend, paying off the bill, and then calling in to ask the card issuer to post the points right away.
Don’t Mistakenly Lose all Your Miles and Points
Lastly, never make the costly mistake of losing all of your points. There are two ways to do that.
- The first is to close a transferrable points program card (like the Sapphire Reserve or an AMEX Platinum) before either redeeming the points or transferring them to an airline or hotel. FYI, with airline and hotel cards, closing the cards almost never affects your points because the points are stored not with the card issuer but rather with the airline or hotel loyalty program.
- The other way you can lose your points is if you let them expire. Transferable points usually do not expire, but airline and hotel points usually do. You should Google “when do XYZ points expire” to make sure you understand the policy. Excepting for a couple of really bad offenders (Spirit and Frontier), points rarely expire in less than one year. In a future post I will share creative ways to keep your points alive. One of the easiest ways, of course, is to put at least one charge per year on the credit card of the associated program.
I use AwardWallet to track the miles and points balances and expiration dates of my family’s accounts. There is a free version, which displays the expiration date of up to 3 miles and points programs. I use the $10/year version, which displays the expiration date of an unlimited number of programs. You can compare the differences here.
This post is the sixth in the following series:
- Imagining the Possibilities of Free Travel
- Leveraging Credit Card Sign-up Bonuses for Free Travel
- Understanding Credit Scores and the Effect that Credit Card Applications Have on One’s Credit Score
- Which Credit Cards to Get to Maximize Free Travel
- 5 Creative Ways to Meet the Minimum Spend Requirement in Order to Get the Sign-up Bonus
- How to Use the Miles and Points You Earn (this post)
- How to Decide Whether to Keep or Cancel Credit Cards
Question: Do you have points that you are considering redeeming? If so, what are you thinking of using them for? If I can help by suggesting high-value redemptions, let me know. You can leave a comment by clicking here. And if you liked this post, sign up here so that you never miss a future post.