Many friends and readers have asked us how to get started with points and miles.We decided to create the definitive guide to using credit card points and miles.
Part 1: Confirm your credit score and availability of cards
Before applying for a new credit card it is important to understand what your current credit score is and if there is any negative information on your credit report that can be corrected ahead of time before applying for one or more credit cards.
If you have past late payments or defaults you can engage a group likeLexington Law
Lexington Law will contact your creditors and attempt to remove any derogatory information. One of our staff members had a few negative items on his report after the 2008 financial crisis and Lexington Law was able to remove a majority of the negative information.
This is just one example and no guarantee but we do recommend speaking with them if you have negative information on your credit report.
Part 2: Decide which type of points to target
Best Type of Points
1. Transferable Point of Currencies
When most beginners think of points and miles they tend to focus on the airline miles aspect of the process.
While this is ultimately important, in most cases it is recommended that a beginner focus on points that are TRANSFERABLE to multiple airline and hotel partners rather than just one partner.
There are a few major cards and programs that offer points that transfer to major airline and hotel programs:
Chase Ultimate Rewards
Ultimate Rewards points are generally thought of as one of the most valuable points currencies. The points transfer to domestic airlines such as United as well as Southwest Airlines.
They transfer directly to Hyatt Hotels which has generous redemption rates which have allowed our team members to stay in 4 and 5 star hotels all over the world.
Chase Bank has rules about how many credit cards you can have and how many you can have applied for in the past 24 months.
The rule is referred to as the 5/24 rule.
If you have applied for more than 5 credit cards in the past 24 months you are likely to be denied for apply for a new card. For this reason we recommend most beginners to start with 1 or two cards from Chase.
Chase Cards have various bonus categories for spending including bonuses on travel, restaurants, internet advertising and many others.
We recommend that our readers review their spending habits and pick a card that provides bonus points that match their spending activities.
Most readers find that a combination of the Chase Sapphire Reserve or Preferred. 3x or 2x on travel and dining, AND a Chase Freedom Unlimited (1.5% on all purchases) or Chase Freedom (Rotating 5% bonus categories) is the most efficient generator of points.
Chase Ultimate Rewards Points can be earned by the following Credit Cards
Chase Sapphire Reserve
50,000 points for signing up and spending $4,000 within 3 months
American Express cards are the oldest and most recognizable points currency. American expresss has 19 Plus transfer partners which is more than Chase currently has.
The only group that more transfer partners in Mariott Rewards which will be covered below.
Estimated Transfer Time
Flying Blue (Air France / KLM)
~1 to 3 days
~1 to 2 days
American Express has a number of different cards for business in personal use depending on your spending habits as well as their Platinum Cards which has industry leading perks including status with Mariott and Hilton Hotels just for carrying the card.
Our recommended beginner combination is to hold both the Amex Premier Rewards Gold Card AND the Amex Everyday Preferred Card which will maximize points for travel, dining, gas,and grocery stores.
Top American Express Card Options
Amex Gold Card
4X points at restaurants worldwide
4X points at U.S. supermarkets, on up to $25K in purchases
The Citi Premier and Prestige Cards provide bonus categories for spending up to 5 Times points of select categories such as Airfare/Resturants.
These cards can be comparable to the Amex Gold/Everyday or Chase Sapphire and Freedom combinations mentioned above.
Citi Thankyou points are a newer currency than American Express but transfer to a growing number of airline programs.
The newest card program to offer transferrable points currency.
Capital One recently started allowing points transfer to certain airline programs.
While their network of transfer partners is the smallest it is worth keeping an eye on them as they add future transfer partners.
Capital One also historically has offered cash back so it gives you options to use a card for cash back OR if it makes sense transfer to a partner.
Part 3: Sign up for Airline and Hotel Frequent Flyer Programs
Depending on where you live and what your travel preferences are there are multiple programs you should sign up for.
We recommend using a tool like Award Wallet, Points.com, or Tripit to manage your frequent flyer accounts similar to how you might use Mint.com or Personalcapital.com to manage your finances.
What accounts you sign up for really depends on where you live and what your travel preferences are.
We recommend starting with whatever airline is prominent in the area you live and then potentially adding select partners that may share the same alliance as your home airline.
For example, if you live in Atlanta you likely fly Delta a lot. You should sign up for a Delta Skymiles Account.
In addition to Delta you may want to also sign up for a Korean Air Skypass account and a Virgin Atlantic Account. Both of these programs also are transfer partners of some of the credit cards listed above and in some cases can have the same flights available for less miles than on Delta itself.
If you are in Chicago or Houston you likely fly United Airlines. United is a member of Star Alliance the largest of the airline alliances.
In addition to signing up for a United MileagePlus account you should consider signing up for Air Canada’s Aeroplan and Avianca Lifemiles both of which are also star alliance partners and can provide you interesting options to transfer points and book awards.
American Airlines Flyers should also consider signing up for British Airways Executive Club as well as Iberia’s frequent flyer program as both of these airlines have unique options for flight redemptions both on their own, on partners, and or even on American Airlines Flights.
2.Airline Credit Cards
While we recommend starting with a transferable points credit card, airline credit cards remain very valuable and depending on your travel habits, spending habits and goals the perks available for these cards can prove extremely valuable and in most cases will outweigh any annual fee that may be charged.
Generally Airline cards are NOT as good for daily spending unless they have bonus categories but provide good value for purchasing directly with the airline and also provide generally provide savings on baggage fees, potential ability to earn status, as well as redeemable miles, and some even provide a companion certificate.
Here are the key cards available for major airlines along with their perks:
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