Reader Javier asked recently in the comments on this article: “Keith turned me on to your site on Facebook. I wanted a little direction. I have the Capital one Venture card with 2x per dollar spent. I crunched the numbers for last month and if I switched to the Chase card I would be down about 3200 points/miles. Capital One doesn’t necessarily use the miles redeem system, they just reimburse you for the travel based on the amount of the ticket. How would I be able to utilize your system with Capital One?”
I started writing a quick reply but it quickly got more involved with examples so I wanted to make this into a more comprehensive post that I could refer people to in the future since this is a common question. This is a long post, but read and digest it slowly because it is an important one. If you don’t want all the details, skip to the bottom to the Conclusion TLDR section.
Did you know that some credit cards will tell you what your credit score is for free? Knowing your credit score is one of the most important things when you’re working on Credit Repair or about to apply for a new credit card such as the Chase Sapphire Preferred with its 40,000 point sign on bonus. Your credit score is computed by scoring different things in your credit file to come up with an objective number to help creditors quickly make credit decisions. While the above graph tells you what is important, it doesn’t tell you exactly what your score will be which is why it is great to be able to see your score regularly. Here are some of the cards we recommend that allow you free access to your credit score:
This card is great because it not only gives you your FICO score but also has no annual fee (all of the rest below have annual fees). This is one of the reasons that I still have this card even after getting it over 20 years ago. Discover makes it really convenient by giving you credit score each month right on your monthly statement. This makes it easy to keep an eye on that all important credit score. Add this to the fact that Discover has a great cashback program with quarterly bonuses, great promotional 0% interest balance transfer offers (such as the 18 month interest free offer they currently have for new signups), no foreign transaction fees and is the only cars that you can use reliably in China, I really think that this card should be in everyone’s wallet.
This card is one that we recommend over and over because of its generous 40,000 mile bonus with just $1 in spending! In fact, I used part of this bonus recently to go to Austria, Germany and China in business class for just $184! It also gives you a free FICO score via their website when you log into your account dashboard. Their standard benefits of a free checked bag and a 5,000 mile discount on US Airways awards definitely are useful to have. To add a cherry on top, they have a 15 month 0% interest offer for balance transfers made in the first 45 days after your account opening. Since US Airways has merged with American, these miles will eventually become American miles in 2015 and this card will disappear as we discussed in this article.
This card is one we haven’t covered in a full article yet but we wanted to include it because it gives you a free Experian Credit Score monthly. The 20,000 Flexpoint signup bonus can be redeemed for an airline ticket that costs up to $400 which can be a good value if you are trying to earn status with an airline while you redeem the bonus. If you redeem your points wisely, you can end up with 2% back on normal expenses, 4% on airline purchases and cell phone bills, gas or groceries. Look for a full article digging into this card soon, but for now check out the application page for details.
Capital One Venture Rewards gives you a monthly non-FICO Transunion Educational Score each month via their online dashboard. We got this card when they were offering a great100K bonus, but the 40K bonus they currently offer is still good for $400 in travel expenses. This card offers 2X miles for every purchase which means it is worth 2% as a credit for travel related expenses.
By getting a credit card that gives you a free credit score each month it allows you to keep an eye on your score without paying for it. This way if you notice a score drop due to mistakes on your credit report or fraud, you can quickly notice and take action. Having quick access to your credit score also helps if you are doing our Credit Repair 101 Section and want to see how the changes are effecting your credit. Finally, it allows you to know when the best time to apply for that new card such as the Chase Sapphire Preferred is and its 40,000 point sign on bonus!
One of the things that trips up newbies as they go through our Getting Started Guide and our Easy Quarter Million program is that we sometimes use Miles and Points interchangeably. Why do we sometimes say one and sometimes the other and is there a difference? To understand, you need to look at the history of the frequent flyer programs.
History of Mileage Programs
Back in 1979, Texas International Airlines created the first Frequent Flyer program that gave you “miles” for each mile flown and then gave you rewards for the accumulated miles. Other airlines eventually followed suit with mileage based frequent flyer programs of their own. So far, so good. The problem came when hotels wanted to have loyalty programs too. Miles doesn’t make as much sense when it comes to hotel rooms and while “Nights” would have been easy, it made it hard to offer promotions without strange fractions so they came up with “Points” instead. Almost all of the hotel programs award points based on dollars spent which makes it fundamentally different than airlines which are independent of price.
Things get more complicated
When they started to tie credit cards to award programs, it initially was pretty straightforward. One mile or point for each dollar became the standard. But when American Express came out with their Membership Rewards program and then Chase followed with Chase Ultimate Rewards it created a new type of Hybrid program. If you look at our Top Credit Cards page you will see what I mean. Hybrid programs allow you to redeem your points for cashback, merchandise, or transfer to both airline and hotel programs. This additional flexibility increases the value substantially. If you are a few thousand miles short for an award ticket, transfer some points to your airline of choice. If you have a great fare where you will earn a ton of miles, maybe using the points to pay cash for the ticket makes sense, etc.
Things get even more complicated
If that wasn’t enough, some new credit cards have programs that call themselves “miles” programs but really are cashback programs. For example, the Barclaycard Arrival PlusTM World Elite MasterCard®gives you two “Miles” for each dollar spent, but those miles can’t be transferred to any airline or hotel program. Rather they have a fixed redemption value of 1% when you use them for travel expenses. So this is really a cashback card masquerading as a miles earning card. But that is why you are reading this blog to make sense of all of this, right?
So what is the value of a point or mile?
I will give you some rules of thumb in a minute, but first want to say that the value can be highly variable depending on how you want to use them. For example, if you redeem 25,000 American Miles for a flight from Miami to Orlando that would have cost you $119 to buy, you are only getting about 1/2 a cent per mile ($0.005 cents per mile). If you redeem 100,000 American Miles for a business class ticket to Europe that would have cost you $5,000, you are getting 5 cents per mile ($0.05 cents per mile). So you can get 10 times the value for your miles if you are smart about it! Whether I would actually ever pay $5,000 for that ticket is something that needs to be considered in determining value but I’m not going to discuss that today.
For some rules of thumb I usually won’t redeem airline miles unless I get at least 2 cents of value on the ticket. Hotel points are more variable than airline miles, with SPG and Hyatt points being the most valuable at around 1 cent per point (although I have gotten as much as 8 cents per points with SPG before with cash and points bookings) but with other hotel programs you are lucky to get 1 cent per point in value. Membership Rewards and Chase Ultimate Rewards are the most valuable I would say at a minimum of 2 cents per point since you can transfer them to multiple airlines.
I hope this shows you the difference between miles and points and how the value can vary depending on how you redeem them. The best way to learn the tricks of how to get the most value is by reading our articles here on Travel With Miles!
One of my favorite festivals I attend each year is the Movement Festival in Detroit over Memorial Day weekend. I truly believe it is the best techno focused festival in the US each year. Last year I went with a friend to Detroit for only $10. Since this is the next big festival many of my readers are thinking about attending, I’m going to show you what you can do now to get free flights there from Miami (but many of the options should apply wherever you are coming from).
1. Pay cash for the plane ticket.
Current prices are $218 (departing Friday, May 23) or $240 (Departing Saturday, May 24) on Delta Airlines. This obviously isn’t a free option, but I wanted to include it so you can compare its cost to the other options and see what value you are getting for the points you are redeeming.
Apply for the Barclaycard Arrival PlusTM World Elite MasterCard® card and use 21,800 Miles of the 40,000 Mile sign on bonus to pay for a ticket. You will get an automatic rebate of 2,180 Miles (10%) back into your Arrival mileage account. You will get 2255 Skymiles since you are basically paying cash for the ticket as far as Delta is concerned. You could consider the true cost of this option as 21,800 – 2180 – 2255 = 17365 because of the rebates and miles you will earn. Read our full review on the Arrival Card here.
3. Use part of the 40,000 Chase Sapphire Preferred bonus to book Southwest flights using points. Value – 2.2 Cents / Point
7. Shop online with Rapid Rewards shopping to earn the 10,940 points needed for a Southwest Award flight. Value – unlimited if it is for purchases you would have made anyways.
This will be the only option available for those without good credit since you can use your debit card or even a prepaid card. There are hundreds of merchants you can shop with and get points for every dollar that you spend. If you were planning on making these purchases anyways then you can end up with completely free points to redeem for your tickets! Some of the high earning merchants right now are 12 points / $1 at Magazines.com, 10 points / 1$ at Rosetta Stone, 7 points / $1 at Snapfish, 4 points / $1 at Advance Auto Parts, or 3 points / $1 at Groupon. If you aren’t familiar with how to make miles and points with online shopping, read our article on how to make mega miles shopping online!
As you can see, the best value for your miles is in option 3 and 4, followed by option 2, then option 5 and 6. If you don’t have a lot of miles, then option 1 isn’t a bad choice while the fares stay low. As the fares go up, the free ticket options will go up in value. I personally will probably be using option 3 since I have so many Ultimate Rewards points.
This is the first in a series of articles called TWM Take Me Away! where I will pick a destination a reader wants to go to and show you how to get there for free with miles!
A reader contacted me recently:
“I am taking the time to message you right now because I want to go to Bali at the end of August for my birthday and I’m trying to figure out how much to save to have. And also around what months should l look into buying a flight ticket.”
Bali is definitely on my bucket list due to the amazing culture , beautiful scenery and friendly people.
I priced out a ticket around those dates on Kayak.com and the cheapest I could find was $1401 on Delta for JFK to DPS (the airport in Bali) via LAX and TPE which seemed like a decent price since you are flying halfway around the world. Business class was over $6,000! But the name of this site is Traveling With Miles not Traveling with Cash, so lets see how we can get there for free.
1. Use 70,000 or 110,000 American AAdvantage Miles to book OneWorld flights.
According to the American Airlines OneWorld chart on this page, you can go from North America to 70,000 Miles round trip in economy class and 110,000 Miles Round trip in business class. I checked and there is some availability on Cathay Pacific which has a great business class product if you can be flexible on dates throughout August.
It is a 15 hour flight from JFK to HKG so I would definitely recommend business class. As a general rule, for any flight 5 hours or more, I try to do business class if I have the miles because it makes the experience much more pleasant.
2. Use 65,000 or 120,000 United miles to book on Star Alliance
This price will change drastically on February 1 when United changes their award chart so if you happen to want to book this trip, do it now. I just did a search and found a coach flight departing from EWR to DPS via TPE on EVA and then returning from DPS to EWR via TPE and LAX (on EVA and United on the way back).There was also business class availability for 120,000 and $25!
Note that these prices will be going up to 80,000 for coach and 160,000 for business after February 1.
If you can find availability on Korean Air flights (which you could book with either type of mile) for JFK to DPS via ICN (Seoul), then you should be able to get the above pricing if you are flexible about your travel dates.
To get these miles you could get 30-50,000 Skymiles by getting the Delta Amex card at this link. But I would recommend getting the Chase Sapphire Preferred card for 40,000 Ultimate Reward Points, then getting the Chase Ink Bold for 50,000 more.
For hotels, it looks like the best values are either the Grand Hyatt property or use cash and points at one of the SPG properties.1. For 12,000 Hyatt Gold Points per night you can stay at the Grand Hyatt Bali
2. For 10,000 SPG points + $180 cash a night you can stay at the W Retreat & Spa Bali – Seminyak. This can be especially rewarding if you have Platinum status with SPG and could possibly get upgraded to a suite.
5. Another good option might be to get the Barclays Arrival card and then use the $400 sign up bonus (40,000 points you can redeem for $400 in travel expenses) just pay cash for a reasonably priced hotel or hostel or bed and breakfast you find there.
Whew! That was a lot of information! But I hope that this shows you how you can get to Bali for free with a little planning.
Update October 27, 2014: None of this has changed since I published this article in January so I am reposting it again for anyone who might want to go.
By the time you read this, I will be on my way to Playa del Carmen, Mexico for the BPM Festival. This 10 day music festival brings all the best DJs from around the world into a beachfront community about an hour South of Cancun for day and night parties. I’ll start out with the Diynamic party with Solomun, then the Circo Loco party on Friday daytime, the Innervisions party on Friday night, All Day I Dream with Lee Burridge during the day, Music On during the night, then the closing parties on Sunday.
Now that I have made you interested here are 5 things you can do now to get to BPM Festival for Free like I am this year:
Apply for the Chase Sapphire Preferred card and transfer 9,000 of the 40,000 Ultimate Reward sign up bonus to British Airways Avios and just pay the international taxes of $72. This is exactly how I got here this year and is truly the best use of your points if you are traveling from Miami. Check out our Full Review of the Chase Sapphire Preferred card here and find out why it is our #1 travel card for people who want to get started with already established credit.
Apply for the Barclaycard Arrival card and use the 40,000 Mile sign on bonus (worth $400 in travel expenses) to pay for a ticket. This has the benefit of earning you miles for the flight as well since you are in essence paying for the ticket using the miles. The better use of this bonus would be for the hotel portion of your trip. Some friends and I are staying at the Fusion Hotel which is right in the middle of everything for 3 nights for around $400 total. This could be fully paid for with this sign up bonus!
Get the Citibank American Airlines Platinum Personal Mastercard and use 35,000 of the 50,000 sign up bonus to book an American Award seat from anywhere in the US to Mexico. This option obviously pales in comparison to numbers 2 and 3 since you have to use 35,000 miles for the exact same award seat that you could get for 9,000 Avios, but it might make sense for people who aren’t in Miami. For example, British Airways if you fly from Seattle to Cancun via Phoenix costs 35,000 miles. This is exactly the same amount as if you booked with American Airlines miles. So if you are a long way from Cancun, then this option might be equal to the Avios option.
Shop online with the British Airways online mall. If you have read our article about How to Make Mega Miles with Shopping Portals, then you know how just by shopping online you can earn miles. You just need to earn 9000 Avios to have enough for a round trip ticket from Miami. Here is a chart of some of the merchants they work with (but there are a bunch more!)$1125 at Shoes.com, $1125 at 1-800-Petmeds or $750 in flowers or Rosetta Stone can get you enough Avios to go to BPM!
There you go, 5 things you can do now to go to BPM next year.Next year, this could be you!
As always, reply with any questions and follow me on Google+, Facebook, Twitter and Instagram to make sure you don’t miss any great info! And don’t forget to share this article with anyone who might be interested using the handy social share buttons right below this post!
Two years ago today I started Travel With Miles! I had just finished my 5 month trip around the world and was excited to start this web site to share just how I did it. Yesterday I chronicled my travels in 2013 all of which were free or close to free using frequent flyer miles.
Most importantly, I have helped people to travel the world. Just this morning the winner of our contest left to the BPM Festival in Cancun Mexico and I will be joining him tomorrow!
Thank you everyone who have read my articles and told me how much my information has impacted your life. Over the next week, I will be giving the site a facelift to keep it looking as good as the information that is on it!