Category Archives: Intro to Earning Frequent Flyer Miles

And The Best Use of Starwood Points for Air Travel Is…

A week or so ago I wrote about the worst use of frequent flyer miles (answer: 100,000 miles for a biz class ticket on a 16 mile flight in Africa). But I figured I should pass along something more useful, so today I present the best value for transferring Starwood Points to an airline.

Starwood points transfer to LAN at a 1:2 rate (largely because LAN’s award chart is based on kilometers, not miles). This is to your advantage if you’re transferring Starwood points because there are a few great awards out there. I’ve seen others talk about the distance-based charts they use which allow you to get a short one-way flight for just 2400 SPG points. Nice.

That said, the best deals are really on the North America to Brazil/Peru/Bolivia rewards on LAN metal. You can fly on LAN to Brazil for 100,000 LAN Kilometers round trip in LAN’s amazing business class. That will cost you just 40,000 SPG points (20,000 points gets you 50,000 LAN KMs because of the 5,000 point bonus you get on 20,000 point transfers; that 5k bonus is doubled for LAN transfers). If you’re looking to save points, coach tickets to Brazil on LAN metal are just 48,000 KMs, which is 20,000 SPG points. That’s a helluva redemption deal, considering 20,000 SPG points will typically only get you a domestic roundtrip ticket.

Redemption values to Argentina are also good – 30k SPG points for a coach ticket and 60k SPG points for a business class ticket. But those Brazil values are amazing.

Yet another reason to get that Amex SPG card as your day-to-day card.

An Introduction to Earning Miles (Even Without Flying), Part 3: Earning Miles Every Day

Read Part 1
Read Part 2

Today we’re wrapping up our introduction to earning miles without flying by looking at credit cards you’d use every day.

Much of the year my credit card spending is tied up with cards that I’m trying to hit a minimum spend on so I can earn a bonus (right now, I’m finishing up the spend on my Chase Sapphire Preferred card, and I’ll be starting the $1,500 spend for my Citi AA Visa card soon). But when I’m not working on a bonus, my daily card is the Starwood Preferred Guest Amex (apply here for personal card and here for business card). You do not actually need a business to apply for the business card – a sole proprietorship (ie, you being yourself) counts. Your spouse can also get his/her own cards and bonuses associated with each. The nice thing there is that Starwood has “household accounts” allowing you to transfer miles freely between accounts as long as you and your spouse have the same address. Right now, Starwood is offering a bonus of 10,000 miles for getting the card and 20,000 additional miles once you spend $4,500 in 3 months (first year fee waived, $65 thereafter). Assuming you’re plowing spend onto that, between you and your spouse you can earn 120,000 Starwood points with $18,000 in spend. That may seem like a crazy amount to you – don’t worry about it if it is. That 10,000 mile bonus is still pretty good, plus there are other reasons to get the card.

Why am I a fan of the Starwood card? First off, earning Starwood points through stays at Starwood hotels is a bear. If you’re not an elite member (and if you spend $30k/yr on this card they’ll give you Gold status, which isn’t worth much, but there ya go), you’ll earn 2 points for every dollar spent for stays at Starwood hotels, meaning a $150 hotel room earns you 300 points. Good luck getting a free room when a decent room at a “category 4” Westin costs 10,000 points a night. However, with even a modest amount of spend you’ll be getting free nights pretty quickly since you earn 1 point for each dollar of spend on the card.

Secondly, and perhaps most impressively, Starwood points transfer into airline frequent flyer programs at a 1:1 ratio (except for Continental, which gives a sad 1:2 – ie, half – ratio) and LAN which offers a 2:1 ratio, but that’s primarily because their program is in kilometers, not miles (read details on maximizing the LAN transfer here). Moreover, they give a 5,000 point bonus for 20,000 mile transfers, meaning that if you transfer 20,000 miles to, for example, Alaska Airlines, you’ll actually get 25,000 miles in the account. Doing the math, you’ll see that you’re actually earning 1.25 airline miles for every dollar of spend. Great, right?

On the hotel redemption side, Starwood has a really wide range of hotels including nicer ones on the low end (Aloft/Element) and amazing ones on the high end. With the Cash and Points program you can find yourself in a Category 4 (ie, a regular Westin, roughly) for just $60 + 4,000 points instead of 10,000 points. It’s a great deal.

There are a couple of minor drawbacks to the SPG card: if you travel internationally they do charge you a foreign transaction fee. That is, frankly, annoying. Also, if you do a transfer from points to an airline program it can (though not always) take days or, in a few cases, weeks for those points to show up. That may not matter, but if you’re looking at a quick trip, that’s not going to work for you.

Other folks I respect (ie, here) love the American Express Premier Rewards Gold card (see here). It offers a 15,000 point bonus with Membership Rewards after a $1,000 spend in months. Annual fee is $175, though it’s waived the first year. People like that it earns double points on gas and groceries and triple points on airfare. If you are able to buy your business travel flights on your own credit card, this may be a good option for you as a day-to-day card (ie, my occasional $5,000 business class ticket to Europe would earn me 15,000 Membership Rewards points just from the purchase). I find the $175 annual fee to be excessive for my spending habits (I’m actually not permitted to put my business travel on a personal card).

The Membership Rewards points, though, are a great program because of the flexibility of the points. Sure, you can transfer them on to gift cards (generally at a 100 points – to – $1 ratio), but the real benefits come from the flexibility to transfer points into great programs like Aeroplan and ANA (that Air Canada and the former All Nippon Airways, respectively). People love Aeroplan because they offer some pretty great redemption options (90,000 miles for business class to Europe, though they’ve recently changed their award chart to be less valuable) – see here for details, and they love ANA because with their distance-based rewards you can get some great values (63,000 ANA miles for a business class ticket on Virgin to London which until recently did not require Virgin’s outrageous fuel surcharges). That flexibility is quite valuable, as you have a much wider range of airlines to choose from when making a reward booking.

Finally, The Points Guy has been saying that the Chase Sapphire Preferred card is the best for everyday spend because foreign fees are waived, you have the flexibility to spend the Chase points on airfare on a 1:1.25 basis (ie, 10,000 points gets you $125 worth of airfare), or you can transfer on a 1:1 basis to Continental, and because you get a 7% bonus on all your spend at the end of the year. That all said, I still think SPG is more valuable because of the flexibility to use those points at Starwood hotels or on a bunch of different airlines. However, if you travel internationally a lot, the Chase card may make more sense because they are not charging you a ridiculous 3% fee on foreign transactions. You’ll have to do the math yourself to determine whether it’s worth it to you.

An Introduction to Earning Miles (Even Without Flying), Part 2: The Credit Cards

(View Part 1)

Welcome back to part 2 of the OTR introduction to earning miles without flying.

Today we’re looking at what credit cards would make the most sense for someone new to the credit card churn game.

As with so many choices around frequent flyer programs, I would normally say that what cards are best for you will depend on a number of factors. Except that if you have no airline-related credit cards, you should run out right now and apply for 2 Citibank American Airlines AAdvantage cards. I’ve written about the details here, but in short you can get 2 Citi cards (one Visa and one Amex) that earn 75,000 miles each after spending $1,500 on the Visa and $4,000 on the Amex within 6 months. First year fee is waived on both. And remember, your spouse can apply for each of those cards as well, which would give you 300,000 AA miles after $11,000 in spend. Read the post I linked to for details on how to apply.

I know that for some people $11k in 6 months is a lot of money. If that’s the case, start with the Visa. Spend $1,500 on it (and your spouse should spend $1,500 on it as well) and you’ve got 150,000 miles. That’s 6 domestic coach tickets. Don’t be disappointed about missing the other miles – you can easily drive yourself crazy worrying about the miles that got away. That’s an important part of this – you are going to miss some points earning opportunities. Don’t let it drive you nuts. Let it go and enjoy the 150,000 miles.

You can re-apply for the same Citi cards and earn another bonus 18 months after your last application.

If you’re a Continental/United flyer you have a bit of a decision to make about your next card. Chase is offering a 40,000 point bonus with their Sapphire Preferred card when you spend $3,000 in 3 months (apply here). Chase touts the ability to use those 40,000 points to get $500 in credit toward any type of travel. That’s fine, but the real benefit is in the ability to transfer those 50,000 points into your Continental OnePass account (you can transfer to Marriott and Priority Club as well, but the Continental miles are more valuable in my opinion). First year fee is waived. Also, if you travel overseas quite a bit, they waive foreign transaction fees, which can be 3% or so (I believe only the British Airways Visa card offers the same benefit).

If you can manage to spend $3k in addition to the spend you’re trying to generate for the American Airlines cards, go for the Sapphire Preferred card next. Also, that 50k point bonus is a limited offer, and I don’t yet know when it will be withdrawn. If you can swing it, I’d go for that (in fact, I have gone for that).

If, however, it’ll be difficult for you to pull off the $3k in addition to the other spend, Continental and United are both offering the same 40,000 mile bonus on their credit cards. Well, they say 40,000 miles but for our needs, you’ll likely only earn 25,000 miles. They’ll give you 25k miles for first purchase, then 5,000 for adding an additional cardmember (which you won’t do since you and your spouse should get their own cards and own bonuses), then 10,000 miles for spending $25k in one year (which I don’t recommend doing because I’m going to recommend a different day-to-day card.) They’ll also waive the fee in the first year and give you 2 airport club passes. (Apply for Continental OnePass Plus here, and apply for United Mileage Plus Explorer here.)

Chase is offering Continental and United elite members 60,000 mile bonuses, so it’s worth logging into your accounts on the airlines’ websites to see if you’ve received that offer. Both airlines have offered larger bonuses in the past so I’m not jumping on these. Plus, I’ve had Continental cards and United cards in the past, and it appears that makes me ineligible for the bonus anyway.

One thing to remember: you can only apply for one Chase card every 30 days, so you can’t get the Sapphire Preferred card, Continental card and United card all at the same time – you’ll have to space it out.

Delta, US Airways and Alaska aren’t currently offering anything beyond their regular signup bonuses (Delta is 20,000 miles – apply here; US Airways is up to 40,000 miles here; and Alaska is 40,000 miles (apply here). Some folks like the Alaska card because it comes with a certificate for a $99 companion ticket which, unlike many such certificates, is actually good on any flight, including first class flights. I’d wait for better bonuses on Delta and US Airways unless you need the points now.

Regardless of what cards you get, you need – NEED – to create a spreadsheet to keep track of what cards you’ve had, what you’ve spent, and when you need to cancel them. I set up calendar items in Outlook to ping me when I have to cancel. Citicards can be canceled through your online account by sending a secure message. They’ll cancel it for you that way. With Chase cards you’ll need to call them. Sometimes you’ll be offered a retention bonus, though this is often in exchange for paying the annual fee. You’ll be able to determine whether that’s worth it for you. I’ve never been given a retention offer, which for some reason offends me in the same what that George Costanza was offended when the carpet cleaners/cult did not try to recruit him.

Tomorrow we’ll talk about my favorite day-to-day card and American Express Membership Rewards.

(Read Part 3)

You’ve Gotta Start Somewhere: An Introduction to Earning Miles (Even Without Flying), Part 1

If you’ve been a frequent flyer for a while, you’re probably pretty well on your way to understanding how the whole thing works. For those folks, there are some great blogs out there showing you how to use miles for a 3-hop, 3-continent jaunt using multiple airlines you’ve never heard of. That’s great, and lord knows I’ve learned a ton from them. But the more I chat with people I know, the more I realize that people who don’t know much about the world of miles are intimidated by it. Their understanding seems to begin and end with knowing that for 25,000 miles they can supposedly get a free ticket, though the flight they want never seems to be available, and it takes them 3 years to earn 25,000 miles. I had a co-worker say to me last week, “One day I’d really like to be able to fly in one of those beds they have on international flights, but I don’t see how I’d ever be able to afford it.” That pushed me over the edge.

Over the next couple of days I’m going to write a few posts about how to get started with all this, because if you never get that first couple of hundred thousand miles (and I promise, you’ll EASILY get that in year 1), you’ll never care about how to put together a multi-city tour of Asia using your not-so-hard-earned miles. I’ll start with earning miles, then we’ll move on to how to spend them efficiently.

Also keep in mind: everyone has different travel needs. Some people need first class trips to Africa every year, some do not. Don’t listen to people who tell you you’re wasting miles by using them for a domestic coach trip. If you won’t be traveling internationally, or are limited in how you use miles because you have children, then by all means use them in a way that makes the most sense for you. I always feel like there’s an underlying tone to some of the frequent flyer blogs out there suggesting that you’re a fool if you’re not creating crazy itineraries with your miles. Don’t listen to that. We all have different needs, and for plenty of people, saving $500 on a trip to Florida is a great way to spend 25,000 miles. Go for it.

Here we go…

You Do Not Need to Fly to Earn Lots and Lots (and Lots) of Frequent Flyer Miles
If you read nothing else, read that sentence twice. I probably have about 2 million miles sitting around right now (I should know exactly how many because I have signed up for, and so should you, as it will show you all the miles you have on one screen. It’s free). I bet 10% of them are from sitting in a seat (or what we call “butt in seat – BIS – miles”). That’s why I’ll talk about non-flight ways of building your mileage balance first – because if you’re already flying a ton, you’ve probably already been thinking about this stuff.

Bar none, credit cards are the easiest way to earn miles quickly. You’ll see people refer to “churning” credit cards, which just means you’re opening and closing credit card accounts faster than, say, a normal person would. I’ll get into that, but you’re probably thinking to yourself: do I have the credit score and finances necessary to open multiple credit cards? I’ll answer that for you: If you have to ask yourself that question, you do are not a good candidate for using credit cards to pile on the miles.

Applying for a credit card will ding your credit score by a few points, though over time you’ll earn those points back by paying on time. You’ll also gain points by having available credit (at least an amount of available credit that makes sense for your income). Having too much available credit and not enough income is not good either. These days you should probably have a credit score above 700 (if not 725-750) before playing around with credit cards. Plus, if you plan on taking out a mortgage in the next 18-24 months, then churning is a bad idea. Why risk not getting a mortgage (or having to pay an extra 1/8 or 1/4 percent, which could equate to tens of thousands of dollars) because you want frequent flyer miles? Be prudent.

If you’re just reading this now, you’ve missed the golden age of credit card churning. For a few years, Citibank would allow you open 3 American Airlines credit cards at a time (basically), generally giving you 35,000 miles each after a minimum spend on the card. Your spouse could do the same. After you closed the cards, you could then apply again and get that 35,000 mile bonus again. Ad infinitum. It was literally printing frequent flyer miles, and plenty of people were racking up 300,000 – 400,000 miles per year between them and their spouse.

You’ve probably guessed at this point that that’s not a great move for Citibank, and, indeed, about a year or so ago they put an end to churning (well, not an end – turns out you can get the bonuses again if you want 18 months between applications). Bummer. Chase, which handles credit cards for a bunch of airlines including United, Continental and British Airways, has not allowed churning at all, and typically does not allow you to apply for more than 1 Chase credit card within 30 days (even if it’s for two entirely different cards).

Let’s say you get a card (and I’ll get to which cards I think you should get in a moment), how long should you keep the card open? I generally recommend if you’re churning to keep the card open 11 months. This will allow you to benefit from having the available credit to make up for the small hit you took from opening the card in the first place. Also, some card issuers frown upon opening and closing cards too quickly; United, for example, says they can take their bonus points back if you close the card within 6 months.

Finally, if you are turned down you should always call and ask to be re-considered. Sometimes you were turned down because you have too much credit open with one bank (this seems to be a popular problem with Chase). Just ask them to lower the credit limits on cards you have, which will allow you to open another card with a small credit limit. American Express, too, will deny you if you have too many cards open; if this occurs, simply close down an open card — they’ll generally give you the new card once the old one is shuttered.

So, the big question, which cards should you get? We’ll discuss that on Monday…

(Read Part 2)

How Can I Get an Award Ticket on Icelandair If I’m Not a Saga Club Member?

Quick hint for anyone looking to use frequent flyer miles to get to Iceland: Sure, you have a couple of more weeks to use up those Skymiles for Delta’s certain-to-be canceled summer-only service from JFK to Keflavik. But if you want to go any other time of the year, you’re stuck with Iceland Express (no frequent flyer program) or Icelandair.

Although Icelandair has their own frequent flyer program (Saga Club) and limited partnerships, one of those partners is Alaska Airlines. You can use 50,000 Mileage Plan points for a roundtrip coach ticket to Iceland on Icelandair (coach tickets to Europe are only 55,000 miles. Business Class tickets are 75k and 80k for Iceland and Europe, respectively, though their business class is akin to what you’d find on a domestic flight up front.)

If you don’t have Mileage Plan points, they’re a transfer partner of Starwood Preferred Guest (yet another reason to get the American Express Starwood credit card), so you’ll get the 5,000 mile bonus for every 20,000 points transferred, allowing you a ticket to Iceland for only 40,000 SPG points. Not too shabby.

Now, Icelandair’s winter and spring fares are not that expensive, so this may not be the best use of those 40k SPG points, but who am I to tell you that you should lay out cash instead of using those points you’ve acquired? It’s also a nice backup to Europe if your larger airlines aren’t showing availability.

How to Get Miles for Free Flights Using Credit Cards: An Introduction

I want to preface this by saying that there are several other websites out there you should visit to learn more about earning miles from credit cards (View from the Wing and Frugal Travel Guy, among others – though FTG’s blog is, how do I say this nicely, a bit crude in its usability and right now I will make an offer to Rick who runs the site: I will gladly help you move your site to WordPress or Squarespace, where you can manage it easily and your visitors will have a vastly easier time using the site.  Contact me if you’re interested.  My help and WordPress are both free.  Squarespace is great and cheap.)

That said, credit card companies have been escalating their offers recently for signup bonuses for airline cards and it’s certainly worth considering applying for credit cards to earn miles to be used for free flights.  For those new to the game, a few basic FAQs I thought would be helpful:

– Everyone new to this asks this question:  won’t applying for credit cards hurt my credit score?  Answer: Yes.  And No.  Yes, you’ll be dinged for a few points for each time you apply (whether you are approved or not).  But if you are approved, you will also gain points for having unused credit.  The short answer is:  If your credit is good and you are not applying for a mortgage for the next 1-2 years, you should be fine.

– I’ve heard about churning credit cards.  Can you explain?  Until last year, Citibank allowed you to apply for American Airlines Citibank cards and get signup bonuses over and over again.  The process of getting a signup bonus, canceling the card, and then re-applying was called churning.  This was a windfall for many, as you could earn several hundred thousand miles a year just for churning.  Citibank put a stop to that last year, and though many of us wept, it makes sense.  Chase, which is associated with most other airline cards, allows you to earn a bonus once a year (for the most part).

– Is there a way to maximize how many miles I get?  The biggest thing people forget to do is to apply for both a personal and a business version of the credit card.  The Delta Amex just offered a bonus of 45,000 miles when you got a Delta Skymiles Amex (now expired).  But you could also get a Business Delta Skymiels Amex (just list your business as Your Name Consulting).  You’d get an extra 45,000 miles for that.  And have your spouse do the same.  Assuming you can meet the spend threshold (in this case, $3k over 3 months), you’ve just earned 180,000 by spending $12,000 on your cards.  Not too shabby.

– Are all offers that lucrative?  Well, no.  The generic signup offer tends to be around 25,000 miles.  But we’ve seen some doozies lately:  British Airways had a 100,000 mile bonus (both you and spouse could get that); American Airlines is still running a 75,000 mile bonus for $4,000 spend in 6 months.  And they offer 3 cards.  Get all 3, and it’s 225,000 points.  Have your spouse do the same, and it’s 450,000 points.  You can’t do this if you’ve ever had a Citi AA card before, however.

– How can I learn about new offers?  Follow the blogs I mentioned above.  These offers come up all the time – the biggest problem is finding out about them.

– Any other advice?  Yes.  I think this is most important:  You HAVE to keep track of the cards you’ve signed up for, what you’ve spent on them, and when the first year free expires.  Set up an excel spreadsheet and calendar reminders.  Spend only what you need to on these “churned” cards, then move on.  But you’ll need to keep close track of that, and of when you need to cancel the card.  I generally cancel after 11 months, to keep the maximum amount of credit open.

– Do you have a favorite miles card?  I’m not really an expert on this (see above, as each of those blogs has plenty of posts about the “best cards”), but my day-to-day card is the Starwood Amex.  The points are transferable into many airline programs with a 5,000 point bonus for 20,000 point transfers, plus they’ve got a wide range of hotels.  I’ve been happy with it.

Good luck…

How to Get to Easter Island Using Frequent Flyer Miles (Since I’m Leaving for Easter Island Today)

The OTR is headed to Easter Island for a few days (I’ll be back posting again next Thursday, most likely) thanks to frequent flyer miles and my somehow winning Voyage.Tv’s TweetYourTrip contest.  While doing some research about how to get to Easter Island using frequent flyer miles, I found that there wasn’t a particularly useful roundup of how to do that.  I’ll provide that now:

LAN (part of oneworld) is the only airline that flies to Easter Island, and the schedule varies quite widely based on seasons – though you can only fly there via Santiago, Chile, or Tahiti.  There are a handful of months (October is one) where you can make the connection from New York without having to spend a day in Santiago.  For those of us in the US, American would be the most obvious choice to use miles, but they consider Easter Island to be part of the South Pacific – so you would have to fly via Tahiti.  Not really an option from the East Coast (especially with Air Tahiti Nui’s nonstop from New York no longer flying).

Fret not:  you have several other options:

– Use your AAdvantage points for the flight to Santiago (40k miles offpeak), then book the 50,000 kilometer reward from Santiago to Easter Island using points you’ve transfered into LAN from Starwood.  Remember – Starwood points transfer at 1-to-2, so 20k Starwood points gets you 50,000 kilometers.

– Or, even better if you’re going with two people, British Airways only requires 20,000 miles for the Santiago – Easter Island flight.  Transfer 35,000 SPG points into BA and you’ve got two roundtrip tickets.  40k AA miles + 17,500 SPG points is a pretty good deal, considering it’s 16 hours flying time.

– Or you can suck it up and pay 100k AA miles and fly on LAN’s apparently great premium business to Santiago.  My wife doesn’t do 17 hours in coach anymore.

– Thanks to TweetYourTrip we’ll be staying at the Explora Rapa Nui.  Trust me, I would not pay $1,600/night on my own.  I’ll let you know if it’s worth it.

In any case, we’ll be back Wednesday.  Looking online there really was a lack of resources out there about how to plan this trip so if any of you have questions about Easter Island, I’ll be more than happy to answer & post here.