TPG beginner’s guide: Everything you need to know about points, miles, airlines and credit cards
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Hello and welcome to the single most important article on this site — and possibly even the internet. But first, let us introduce ourselves.
We are The Points Guy, and we’re about to be your new best friend. Collectively, we’re a group of travel experts, and we’re going to teach you the ins and outs of credit cards, points, miles, aviation and everything in between.
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I’m Samantha Rosen, and I started working at TPG full-time in May 2017 as a social media editor — and when I say I knew nothing about points and miles, I knew nothing about points and miles. What you’re about to read is everything I wish I knew when I started working here. As for you, you’re about to be the savvy traveler all of your friends go to for advice. But first, you have to know where to start. So sit down and get comfortable.
This is the first part of our Beginner’s Guide series, where we’ll explain the basics of airlines, credit cards and how to earn points and miles. The second part will focus on the basics of how to burn (use) them.
The first step in learning about points and miles is to talk about points and miles — and know why using your debit card has no point . . . pun intended. By using a debit card, you’re spending money and not getting anything back in return. When you use a credit card every time you pay for food, clothing, groceries, toiletries — you name it — you’re earning points and miles that you could put toward your next vacation, along with valuable benefits like purchase protection and trip delay or cancellation insurance. And wouldn’t you rather know that all the money you spend is like an investment in your next trip?
Now, here’s the cardinal rule of points and miles. Are you ready? If you remember nothing else from our talk, remember this: Pay your bills on time and in full every single month. Never, ever spend more than you can afford or buy things you wouldn’t have bought with plain cash. This rule is so important it took the top spot on our list of 10 commandments for travel rewards credit cards.
Now that we’ve got that settled, let’s go back to that vacation you’ve been planning.
What are points and miles?
Points and miles are a type of currency. Here at TPG we focus most of our time on the currencies issued by credit cards, airlines and hotels to keep you loyal to them — so these are called loyalty programs. When it comes to loyalty programs and travel points, there are two types of rewards that you work toward: points and status. Points are earned every time you take a trip and can be redeemed as travel rewards. The industries of credit cards, airlines, and hotels are closely intertwined and the whole point of the points-and-miles “hobby” is to use these currencies to travel the world. This can take a variety of forms, but the simplest ways are:
- Using airline miles for airline tickets: For example, if you have United miles, you can use those miles for flights with United and its various partners.
- Using hotel points for hotel stays: Likewise, if you have Marriott points, you can use those earnings for free nights at the dozens of brands under the Marriott umbrella.
- Using credit card points directly for travel: This varies by issuer, but most credit card programs allow some type of direct redemption of their points. Generally speaking, you either pay for your flights or hotels using your points (instead of paying cash), or you swipe your card and then redeem points or miles to effectively “erase” the purchase from your statement.
Advanced points-and-miles travelers use more complicated techniques for more advanced rewards. Many credit card programs allow you to transfer your points to a select group of partners and then redeem them for “award” flights or hotel stays. This is a way to get outsized value from your rewards and pay a fraction of the price of what they’d charge you in cash. We’ll cover this in our next installment, but for now, feel free to check out our introductory guide to transferable points.
Speaking of value, points-and-miles currencies are all worth a certain amount of money, since you can use them in exchange for travel. However, they’re not created equal. As a simple example, if 20,000 points from Program A can get you $200 worth of rewards, each point is worth 1 cent ($200 ÷ 20,000 points = $0.01 per point). However, if 20,000 points from Program B can get you $400 worth of rewards, each point is worth 2 cents ($400 ÷ 20,000 points = $0.02 per point). That’s why it’s so important to have a baseline understanding that a point or mile from one program is not necessarily the same as a point or mile from another program. For example, Delta miles (known as SkyMiles) are generally worth less than American Airlines miles (AAdvantage miles) when you go to use them.
Using our monthly valuations guide is a good place to figure out the approximate value of your points and miles, though even this can vary depending on the exact award you’re booking. Keep in mind that most credit card companies and hotels have “points,” and most airlines use “miles.” But there are some exceptions. For example, JetBlue and Southwest are airlines, but their programs use points rather than miles. And Capital One uses miles as its currency, despite being a credit card issuer.
The whole fun in the points and miles game is to never pay more for a flight in points or miles than you would if you just paid for it in cash with your credit card. Using your points to book a flight or a hotel is called an “award redemption,” but I’ll get into that more in the second part of our guide. For now, what you should know is that to figure out how much value you’re getting per point or mile, you divide the cash price by the number of points. For those more visual readers, here’s the formula:
If it’s lower than how we value them, it’s probably best to use cash — but if it’s higher, congrats! You’ve got yourself a great award redemption.
Here are the names of common airline miles you should know:
- Alaska Airlines Mileage Plan miles
- American Airlines AAdvantage miles
- Delta SkyMiles
- JetBlue TrueBlue points
- Southwest Rapid Rewards points
- United MileagePlus miles
And here are the hotel points currencies:
Last but definitely not least, here are the credit card currencies:
- American Express Membership Rewards points (a fancy way of saying “Amex points”)
- Bank of America®️ Premium Rewards®️ Visa®️
- Barclaycard Arrival miles
- Capital One miles
- Chase Ultimate Rewards points (a fancy way of saying “Chase points”)
- Citi ThankYou Rewards points (a fancy way of saying “Citi points”)
There are, of course, many more, but these are some of the most popular U.S.-based points and miles currencies that should be on your radar.
Still with me? Good. Now, let’s dive into the most effective way to quickly boost your points and miles balances: signing up for a credit card.
Credit cards to have in your wallet
The whole fun of having a credit card to earn points and miles is that the money you spend normally on everyday expenses has extra value as it works to get you closer to your next trip. But needless to say, there are a ton of credit cards out there, and sometimes it’s hard to figure out the best one for you — unless you read our site, of course. Here are some of our favorites:
- Chase: Chase Sapphire Reserve®, Chase Sapphire Preferred® Card, Chase Freedom Unlimited®, Chase Freedom®
- Important note: Chase has a little something called the “5/24 rule” that makes all points people shudder. In order to get a Chase card — no matter what type of card it is — you cannot have opened five or more personal credit cards across all banks in the last 24 months. In short: If you’re planning on signing up for multiple cards, it’s a good idea to get your Chase cards first. You can read more about the 5/24 rule here.
- American Express: The Platinum Card® from American Express, American Express® Gold Card, the Amex EveryDay® Credit Card from American Express, Amex EveryDay® Preferred Credit Card from American Express, American Express® Green Card
- Capital One: Capital One® Venture® Rewards Credit Card
- Citi: Citi Premier Card
These aren’t the only credit cards that may deserve spots in your wallet. As I mentioned before, it’s a small travel world after all. The major airlines and hotel programs team up with credit card issuers on what are called “cobranded cards,” which earn you points or miles towards a specific hotel group or airline. These are typically a good pick if you fly the airline often or stay with a certain hotel chain a lot, or if you want to earn a bonus and use the points or miles for a specific reason (read: cool flight or vacation).
Here’s a list of the best hotel credit cards:
- Marriott Bonvoy Boundless™ Credit Card or Marriott Bonvoy Brilliant™ American Express® Card
- Hilton Honors American Express Ascend Card or Hilton Honors American Express Aspire Card
- The World of Hyatt Credit Card
- IHG® Rewards Club Premier Credit Card
Meanwhile, these are the best airline miles credit cards:
- Alaska Airlines Visa Signature® credit card
- Citi/AAdvantage Platinum Select World Elite Mastercard
- Gold Delta SkyMiles® Credit Card from American Express or Platinum Delta SkyMiles® Credit Card from American Express
- JetBlue Plus Card
- Southwest Rapid Rewards® Premier Credit Card
- United℠ Explorer Card
You can also select credit cards that offer bonuses for different types of spending:
- Airlines credit cards
- Rewards credit cards
- Dining credit cards
- Hotel credit cards
- Travel credit cards
- Amazon credit cards
- Starbucks credit cards
- Grocery credit cards
How to earn points and miles
Now that we’ve got those fundamentals under our belts, let’s talk a little bit about how to actually earn those points and miles.
The easiest and best way is through sign-up (or welcome) bonuses. This is another way of saying, “If you spend a certain amount of money on our credit card in a certain amount of time, you’ll earn a certain extra amount of our points.” It varies from card to card, and you can check out our current best offers of virtually every card on the market on the TPG list of best credit cards. Credit cards are your best bet to earn points and miles because of these fancy bonuses.
The timeline for a welcome bonus to hit your account varies from issuer to issuer. Officially, American Express takes about 8 to 12 weeks, Chase takes 6 to 8 weeks, Citi takes 8 to 10 weeks, and Capital One pays within two billing cycles. Our best piece of advice is to hit the minimum spending requirement way before your statement closing date — you don’t want to go down to the wire. For more details on this, read this post.
Another strategy — and an underrated one — is to shop through an online shopping portal. At its most basic, this is a site that partners with major online retailers, and when you start at the portal instead of going directly to the retailer’s website, you’ll earn bonus points or miles (or even cash back if you’d prefer to use of the best cash back credit cards on the market today instead). For example, if you want to buy something online at Bloomingdale’s, don’t go directly to Bloomingdales.com — go through your preferred rewards portal that will then take you directly to Bloomingdales.com. You’re still purchasing the items directly from Bloomingdale’s; you’re just earning extra bonus points, miles or cash back by starting at the portal first.
If there’s a certain loyalty program currency you want to earn, check to see if it offers a shopping portal. This, coupled with using the right credit card that also earns you points and miles on the purchase, is called “double dipping.”
Buying, flying and staying
Last but not least, you can earn points and miles by doing business directly with a given loyalty program. If you have a specific airline you fly, you’ll earn miles by actually flying that airline. For a hotel program, you’ll earn points by staying overnight in a participating property. And most credit cards earn you a certain amount of points per dollar on what you spend. So, for example, if a card offers four points for every dollar you spend on dining, and your lunch cost $10, you would earn 40 points. 40 points won’t get you far — it won’t get you anywhere, really — but these small purchases do add up over time.
While we’re on the subject of airlines, let’s talk a little bit about how you earn points and miles while flying. Each airline has its own system of awarding you miles every time you sit down on one of their flights. Over time, these add up and ultimately you’ll be able to use all of them for a free flight to the destination of your choosing. Are you sensing a theme here?
Again, let’s start with the basics. In the U.S., there are 10 major airlines. They are:
- Alaska Airlines
- Allegiant Air
- American Airlines
- Delta Airlines
- Frontier Airlines
- Hawaiian Airlines
- Spirit Airlines
- United Airlines
American, Delta and United are known as the Big Three because of their size and the number of passengers they fly. Southwest is the other major U.S. airline.
There’s a difference between airlines — some are known as a “full-service” and some are “low-cost” carriers. The names are pretty self-explanatory, but full-service airlines have, you guessed it, full service. They typically offer different cabins to sit in, such as economy (coach), premium economy (fancy coach), business and, occasionally, first class. Low-cost airlines only have economy and typically, they nickel and dime you for just about everything. Delta is an example of a full-service airline, while Spirit is a low-cost one.
Let’s talk about elite status for a second. Elite status is great if you travel frequently and thus, get to enjoy the perks. But a word to the wise: Chasing elite status just to have it is generally not worth it. You’ll end up spending more money than you’ll get out of it. The value of status depends on the airline, but that’s why we put together these handy guides for further reading:
- What Alaska Airlines elite status is worth
- What American Airlines elite status is worth
- What Delta elite status is worth
- What JetBlue elite status is worth
- What Southwest elite status is worth
- What United Airlines elite status is worth
Airlines also have special codes, internationally recognized abbreviations for ticketing. American Airlines is easy (AA), but JetBlue and Southwest are a little trickier (they’re B6 and WN, respectively). Delta is DL, Alaska is AS and United is UA. International airlines have them too, but these are just the basics — and now you’ll know what those seemingly random letters on the top of your boarding pass mean.
Airlines aren’t the only ones that have codes. Airports have ’em, too. You likely know popular ones like JFK and LAX, but every airport in the world has a three-letter identifying code. The code system is organized by the IATA (International Air Transport Association) and is the shorthand way of communicating which airport you’re flying into and out of, no matter where you are in the world. Pretty cool, huh? Popular airport codes include:
- Chicago O’Hare International Airport (ORD)
- Dallas/Fort Worth International Airport (DFW)
- Denver International Airport (DEN)
- Las Vegas McCarran International Airport (LAS)
- Hartsfield–Jackson Atlanta International Airport (ATL)
- Seattle-Tacoma International Airport (SEA)
- San Francisco International Airport (SFO)
- Newark Liberty International Airport (EWR)
- Charlotte Douglas International Airport (CLT)
- London Heathrow Airport (LHR)
- Paris Charles de Gaulle Airport (CDG)
- Madrid-Barajas Adolfo Suárez Airport (MAD)
- Amsterdam Airport Schiphol (AMS)
- Frankfurt am Main Airport (FRA)
- Hong Kong International Airport (HKG)
- Beijing Capital International Airport (PEK)
- Seoul Incheon International Airport (ICN)
- Singapore Changi International Airport (SIN)
- Shanghai Pudong Airport (PVG)
- Dubai International Airport (DXB)
- Doha Hamad International Airport (DOH)
- Abu Dhabi International Airport (AUH)
- Auckland Airport (AKL)
- Sydney International Airport (SYD)
- Addis Ababa Bole International Airport (ADD)
- Johannesburg International Airport (JNB)
- São Paulo–Guarulhos International Airport (GRU)
- Buenos Aires Ezeiza International Airport International Airport (EZE)
Finally, airlines use one more code when it comes to classifying tickets; every ticket will fall into a one- or two-letter fare class. Some are simple (F is typically used to designate first class) but most have no connection to what they represent. You can tell a lot from these fare classes: How many miles you’ll earn and whether you’re eligible for an upgrade are generally the two most important.
How to use your points to travel the world
You’ve digested the essentials, so let’s talk for a second about airline alliances. Remember how I said airlines, hotels and credit cards are closely intertwined? It gets a level deeper here. Alliances are more or less what you think they are: a way for the airlines to play nicely with each other. This also allows airlines to provide broader geographic coverage. After all, no U.S. carrier flies nonstop to Bali (DPS) but you can leverage these alliances to get there on partner airlines.
There are three main alliances you should know about: Oneworld, SkyTeam and Star Alliance.
- American Airlines
- British Airways
- Cathay Pacific
- Japan Airlines
- Malaysia Airlines
- Royal Jordanian
- S7 Airlines
- Sri Lankan Airlines
- LATAM (LATAM has announced it will be leaving Oneworld, but has not given a firm timetable. Once it leaves, it will become unaligned, though it says it intends to retain individual ties with many current Oneworld members. The big exception is American, which LATAM is ending its relationship with in favor of a new one with SkyTeam’s Delta.)
Fiji Airways is affiliated with Oneworld, and Royal Air Maroc is expected to become a full member in 2020.
- Aerolineas Argentinas
- Air Europa
- Air France
- China Airlines
- China Eastern
- Czech Airlines
- Delta Air Lines
- Garuda Indonesia
- Kenya Airways
- Korean Air
- Middle East Airlines
- Tarom Airlines
- Vietnam Airlines
- Xiamen Air
- Aegean Airlines
- Air Canada
- Air China
- Air India
- Air New Zealand
- Asiana Airlines
- Austrian Airlines
- Brussels Airlines
- Copa Airlines
- Croatia Airlines
- Ethiopian Airlines
- EVA Air
- LOT Polish Airlines
- Shenzen Airlines
- Singapore Airlines
- South African Airways
- TAP Portugal
- Thai Airways
- Turkish Airlines
Most major (and non-major) airlines belong to an alliance, though notable exceptions include Alaska, Etihad, Southwest, Virgin Atlantic and Virgin Australia. However, even most non-alliance members form partnerships with the above carriers — and credit card issuers — so you can still earn and redeem miles on their flights in a variety of ways.
Why should you care about airline alliances? Glad you asked. Remember when I talked your ear off about how to earn points? Well, ladies and gentlemen, this is where it really comes into play. Airline alliances make it easy for you to use your points from one airline’s program to book a flight on another. Translation: Vacation, here you come!
How do you get started?
What can you do right now to get started? Well the first step is to sign up for loyalty programs — points-and-miles language for an airline or hotel program that lets you earn points or miles. You don’t have to sign up for every program under the sun, but we would strongly recommend signing up for the ones from the airline(s) you fly frequently, along with the major hotel programs.
Next comes some terminology. When you use your points or miles to book a flight, that’s what’s called an “award redemption.” Remember this term, since you’re going to see it all over this site. If you hear someone say, “Ugh, I’m trying to book a flight to Tokyo on ANA but there’s no award availability,” that means all the seats on which you could have used your points are sold out. Hey, we never said this stuff was easy. While we’re on the subject, you should only use your points on travel. Using them on anything else — like Seamless, Amazon, etc. — is essentially throwing money down the drain.
Another term to commit to memory is a “transfer ratio.” Some loyalty programs make this really easy for you, and for every point you transfer from one airline (or credit card issuer), you get one of theirs; this is called a 1:1 transfer ratio. A good example? You can transfer your Chase points to United at a 1:1 transfer ratio — so if you have 50,000 Chase points and you transfer them to United, congrats, now you have 50,000 United miles. Transfer ratios vary from program to program, so it’s always good to do a bit of research before you make a move.
Others are a bit more complicated — for example, if you have a stash of Amex points, you can transfer them to Aeroplan, which is Air Canada’s loyalty program. It’s a great tool to help you search for award availability on any Star Alliance airline.
The other things you need to consider are your travel goals and strategy. Would you rather save up and do an insanely luxurious, cool flight, or use your points and miles for lots of free travel in the back of the plane? There’s no wrong answer here. This is something we’ll delve into in our second installment of the Beginner’s Guide, where we’ll teach you everything you need to know about actually using your points, including step-by-step instructions on how to transfer and redeem across a variety of airlines and hotels. However, if you want to get started now, feel free to check out these guides:
- Airlines: How to redeem miles with Alaska, American, Delta, JetBlue, Southwest and United
- Hotels: How to redeem points with Hilton, Hyatt, IHG and Marriott
The biggest thing to keep in mind here is this little nugget I mentioned earlier: Never pay more for a flight in points and miles than if you just paid for it outright with your credit card. There’s a method to the madness here. We know now that points and miles are worth a certain amount of money. The whole point of points and miles is to “hack the system,” so to speak. Paying the equivalent of $1,330 worth of points for a flight that costs $16,000? Outstanding. Not paying a cent for your stay at The St. Regis Maldives? That’s exactly what we’re talking about.
Now that you have all of these basics under your (seat)belt, here’s a final checklist you can use to get started:
- Check your credit score
- Apply for a credit card that matches your spending habits, as we mentioned above
- Sign up for loyalty programs with the airline(s) that you most frequently fly
Don’t forget to like us on Facebook, follow us on Twitter and Instagram, subscribe to our newsletter, and be sure to check back to the site daily for news, updates, and more — you’re about to be the savviest traveler you know. Welcome to TPG.
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