Welcome to a brand new feature here at The Royal Tour: points and miles for beginners. In this series, we will examine basic questions like: how do I earn points/miles, what is the best way to earn and to use points/miles, how much are they worth, and more. We will look at these things both in the abstract, and also some specific examples to make this rather daunting subject more easily approachable.
A bit of background. In the past four years, I have booked more than $25,000 of travel at little to no cost to myself through the use of points and miles. Many travelers, both professional bloggers and casual vacationers, have done even more. Yet for so many people, this seems like a pipe dream. “Free travel?” they sneer. “There’s no such thing.” Well, without changing anything in my life except how I spent money (the amount I spent remained the same), I was able to achieve this. And so can you. It just takes a bit of learning about how the system works, and how best to use it to your advantage.
Today, we are going to just go over the most basic of basics: what exactly are points and miles? I’m going to break these down into three types: airline miles, hotel points, and transferable points.
Let’s start with airline miles. In the past, flyers received one mile for every mile their flight with a given airline flew. So let’s say that you took an American Airlines flight from Los Angeles to Miami. This flight is 2,342 miles, so that is what you would earn, with a bonus if you paid more to sit in first class. Those miles would go into an account, and could be redeemed later for basically free flights, if one accumulated enough before they expired. Today, miles aren’t awarded for miles flown, but rather according to dollars spent. If you are like me and look for the best deals, you won’t earn many miles, even for incredibly long international flights – sometimes less than one per dollar spent. If, however, you book full-fare (read: more expensive) or first-class tickets, you will receive a ton of them.
There are several other ways to earn airline miles, and we will cover those in later columns, but that’s the basic. Nearly every airline in the world has their own miles “currency.” American has AAdvantage Miles, Delta has SkyMiles, Southwest has Rapid Rewards points, and so on. If you purchase your ticket through the airline, thereby giving them revenue, you will receive miles according to their calculation. (This is not necessarily the case if you book through a third party vendor like Travelocity, though more on that at a later date.)
Hotel points are pretty much the same. The major hotel chains (Hilton, Marriott, and the like) will give a base rate of a certain number of points per dollar spent on rooms, provided you book directly with them and not through a third party. As with airline miles, these are free to you for booking, so you might as well create an account to get them. Earn enough and you can redeem them for free nights within that chain.
Transferable points are a bit more complicated, and revolve around banks. There are three major issuers of travel-based credit cards in the United States: Chase, Citi, and American Express. Each of these has general travel rewards cards that earn their specific points: Chase Ultimate Rewards points, Citi ThankYou points, and AmEx Membership Rewards points, respectively. These can either be redeemed for cash back like a normal credit card, or transferred – hence the name transferable points – to partner airlines and hotel chains for a set number of airline miles or hotel points. For example, Citi ThankYou points will transfer 1:1 to AeroMexico Premier points in increments of 1,000 (among many other airlines). Each of these has different transfer partners, though there is some overlap. Transferable points are earned by spending money on the associated credit card(s).
Transferable points are more valuable because they are more flexible, almost like a wild card in poker, but once transferred, are just like “normal” miles or points.
What do all of these have in common? They have tangible value, especially in large quantities, but can’t be traded for money (outside of the transferable currencies through credit card companies), only redeemed for travel.
I hope this was a good introduction to points and miles. Next week we are going to talk about how to start collecting them.
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