Rewards travel 101

Hello, it’s me! I’m back from a short hiatus.

These past few months had been pretty quiet on the blogosphere. It’s mostly because I haven’t gone anywhere since May (i know, boring). ūüôā While there hadn’t been much activities here, I’ve been keeping busy with life, and attempting to sharpen my beginner level culinary/domestication skills (#CrockPotHeadfortheWin. One day I’ll upgrade myself to be an #InstaPotHead, but only when the pricey gadget drops in price).

Ever since my cameo appearance on Million Mile Secrets (post here), I’ve gotten a few inquiries from friends on rewards travel. So here I am, sharing my perspective, tips, and pointers.

How to Earn Miles and Points

The single best way to partake in this travel hacking hobby, is to obtain sign-on bonuses through credit card offers. But before you start filling out credit card applications, please keep the following in mind:

  • Chase Bank’s 5/24 rule. Chase has become a lot more strict on approving credit card applications, even if you have a high FICO score. Based on many subject matter experts in the miles/points world (MMS, Doctor of Credit, the Points Guy, One Mile at A Time, FlyerTalk, etc), if you have more than 5 new credit card accounts opened in the last 24 months (personal, business, authorized user), more than likely it’ll be difficult to get approved for Chase’s branded (freedom, ink, sapphire preferred, etc) or co-branded credit cards (Chase Hyatt, Chase Marriott Reward, Chase British Airways, Southwest cards, etc). So before you start applying for cards, it’d be good to start with Chase’s card portfolio first as they are getting harder to get regardless of your credit score.
  • Review sign-on bonus before you apply. The sign-on bonuses are not created equal. Take American Express Platinum card for example, the bonus was as high as 100,000 membership rewards points at some point (mostly targeted offer). But right now the offer is only 40,000. While the spending requirements differ, American Express only offers sign-on bonus for each card type “once ever”. You cannot churn or re-apply to get the bonus again¬†once you’ve received the bonus before. Now Citi is making changes to their rewards program this month (August 2016). For more info please refer to this post from One Mile at A Time (post¬†here).
  • Understand the difference between various¬†rewards programs. Co-branded credit cards (cards that¬†the bank partnered with an airline or a hotel) are straightforward. The points or miles you earn can only be used for the specific program, unless otherwise indicated. For example, the AAdvantage miles can only be used for AA/One World Alliance reward redemption, Hilton HHonors points only work for the Hilton Brand, Hyatt Gold Passport works only for Hyatt properties, Starwood points for Starwood properties (but can also be transferred to AA). There are some¬†other programs which the points can be transferred to select partners or be redeemed for cash value when booking travels directly through the CC travel portal (e.g. Amex membership rewards, chase ultimate rewards, Citi ThankYouPoints). Knowing how the different programs work can help you strategize on how best to maximize the value.
  • Other than applying for credit cards to get the sign-on bonus, one other way I find really useful is to¬†stay up to date by subscribing to newsletters from the miles/points/credit card subject matter experts. Last year Citi offered a promotion for its citi gold checking account, which came with a bonus of 50,000 AAdvantage miles or 50,000 Citi ThankYouPoints upon meeting the eligibility requirements. If it wasn’t for the newsletters I receive, I’d not have known about this. While it took almost 6 months for the miles to post, it was well worth paying $90 in fees (3 months of service fees for a premium checking account) to get 50K AA miles. In addition, my Prestige card annual fee was reduced from $450 to $350. Knowledge is power. Sites like my friend’s Hustler Money Blog, and again the Points Guy, Million Mile Secrets, One Mile At A Time, etc. provide a really good platform to learn about the updates.

How to Use Miles and Points for Travel

Earning points and miles is only half the battle. While I’m not an expert in rewards redemption, here are my thought process and tools I use when I plan a trip. (Note: My airline of focus is mostly on American Airlines. Even though I’ve used United Mileage Plus and British Airways Avios before, I’m not as familiar with the other airlines).

  • Scenario 1: When I know my destination. If I know where I want to go, first I’ll use google flights or ITA¬†matrix¬†to see what the flight routes are like. Since AA miles can be used not only on AA flights but flights within the One World Alliance partners, sometimes I’ll look at the routes from the One World Alliance’s website as it has more comprehensive schedule than what AA may be showing. After that, I’d looking at AA’s award availability at least 6 months out (the awards are available 11 months out). Some flexibility on travel dates may be necessary in order to book a reward flight. Knowing when the off-peak and peak travel seasons are can save you some miles. Here is AA’s flight award chart (click here). In general, I try to use the milesaver reward as much as possible. Sometimes you may have to be patient and keep checking back on the award or milesaver availability days or weeks later. Since the award miles are charged the same each way, I’ve done booking just one-way redemption while I wait for availability for the outgoing or return flight.¬†I’d always pay for taxes and fees using my AAdvantage credit card (offered by Citi and Barclay). The card offers a 10% redemption miles back up to 10,000 per year.
  • Another way I’ve booked travel is using multiple methods for paying for flights. For an upcoming trip to Greece, after reviewing the flight route, we decided on Dallas -> Philly -> Athens (round trip). I wanted to use the citi ThankYouPoints for my airfare. However it would’ve cost more booking this entire route through citi’s travel portal. I ended up booking only the Philly -> Athens -> Philly segment via TYP, and then used AA giftcards (part of my old¬†Amex Platinum card’s $200 travel credit)¬†to buy the Dallas -> Philly -> Dallas segment. The downsize is I now have 3 separate booking reservations (2 one ways for Dallas/Philly, and one for Philly/Athens). If I checked a bag, I’d have to claim my bag and go through security again in Philly during the connection since the bag cannot be checked all the way through under different reservations. This won’t be a problem since I’m doing carryon.
  • When flights are booked, I love using awardmapper to see what hotels are available in the destination city (it may be a good idea to do this prior to booking the flights if maximizing airfare and hotel redemption is your goal). Take my Sydney trip last year for example – after I booked the flight (literally 11 months out), I then applied for Chase’s Hyatt card which offered 2 free stays as a sign-on bonus at any Hyatt category. This allowed me to stay at the Park Hyatt at $0 cost for 3 nights (3rd night was using 30K points). When you’re a couple, you can each apply for a rewards card and double up on the sign-on bonus. This would’ve given you 4 free nights at the Park Hyatt.
  • Scenario 2: When I don’t have a destination. This happens when I have free hotel nights to use, but don’t know where to go (sounds like a good problem to have). This year I applied for the¬†Hilton Citi Reserve card and earned 2 free weekend night certificates at any Hilton’s (excl. all inclusive resorts). When you can literally stay at any Hilton in the world for free, of course a maximum value is preferred. The certificates have a 1 year expiration, so hogging them is not an option. I went to Hilton’s award site and reviewed a list of their category 10 and 9 hotel listing. There are some amazing Hilton properties in the Maldives, Thailand (Koh Samui), etc. which literally cost over $1,000 a night. As tempting as they sound, in my opinion those locations are better used for a honeymoon or special occasion. I ended up deciding on the¬†Hong Kong Conrad for next year (category 9, 80K hhonor points/night). I didn’t confirm the reservation until I was able to find¬†award flights on AA for DFW->HKG. So this is my example of when the destination is unknown and imagination can take you to anywhere you want.

Other Tips

Here are some tips that may be helpful in rewards travel:

  • Track your credit cards. It’s just basic excel tracking. Keeping the info like cc apply date, spending requirement, sign-on bonus, benefits, closed date, etc. can help you to review your cc portfolio holistically. It also comes in handy knowing when you are out of the dog house for Chase’s 5/24 rule, and when you can re-apply for a previously closed cc.
  • The spending requirement starts when you’re approved, not when you activate the card. This can make a big difference on your sign-on bonus eligibility.
  • Keep redemption value¬†in mind. You may be better off purchasing an airfare outright instead of using miles. ¬†For example, using 50K miles for $200 flight is totally not worth it in my opinion. Unless you have gazillion miles to burn, or if you just don’t want to pay cash. The same applies to hotel point redemption. You should try to get a feel on what the cost might be (via expedia, booking.com, orbitz, google flights, ITA matrix, etc), and then determine whether it makes sense to use miles/points.

The information here may not cover everything, but it’s what I’ve been using to plan my travels. There are also options to use paid services that can help you book travel using miles/points. Hopefully you are able to get a better perspective on this fascinating hobby and join in on the fun. ūüôā


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