The credit card offers that appear on the website are from credit card companies from which ThePointsGuy.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all credit card companies or all available credit card offers. Please view our advertising policy page for more information.
Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
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 who have traveled the world and we’re going to show you the ins and outs of navigating that world — everything from credit cards to points and miles to aviation, and everything in between. I’m Samantha Rosen, TPG’s social media editor. I started working at TPG full-time in May 2017 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 that 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 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/cancellation insurance. And wouldn’t you rather know that all the money you spend is like an investment in your next trip?
Now, here is 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 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 . . .
Points and miles are a type of currency and 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. These three industries 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:
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 your approximate value at any time, 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 types of airline miles that you should know:
And here are the hotel points currencies:
Last but definitely not least, here are the credit card currencies:
There are, of course, many more, but these are some of the most popular US-based ones that should be on your radar.
Still with me? Good. Now let’s dive into the most effective way to boost your points and miles balances: signing up for a credit card.
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:
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,” cards that 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:
Meanwhile, these are the best airline miles credit cards:
You can also select credit cards that offer bonuses for different types of spending:
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 here. 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 8-12 weeks, Chase takes 6-8 weeks, Citi takes 8-10 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). 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.”
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 4 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 US, there 10 major airlines. They are:
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 US 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:
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:
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.
Now that we’ve got the essentials down, 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 US carrier flies nonstop to Bali 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.
Fiji Airways is affiliated with Oneworld and Royal Air Maroc will be joining in the future.
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!
Speaking of you . . . 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:
The biggest thing to keep in mind here is this little nugget that 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:
Don’t forget to like us on Facebook, and 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.
NEW INCREASED OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.