3.25.22
In the points world, there are two aspect to consider, earning points and using them. Although there are many levels and nuances to these, if you are intentional and strategic about how you earn your points and how you spend (burn) your points, you can achieve tremendous value for your efforts. I hope that this overview of ways to earn points will help you assess if you are getting the most bang for each dollar spent or if you are missing out on some opportunities.
In this post
Ways to earn points
By flying or staying
Each airline and hotel has a rewards earning structure in place so that for every dollar you spend when booking directly through an airline or hotel, you earn points for their specific program. There are some restrictions on certain airlines and fare classes. For example, when booking a flight with miles or a basic economy flight on say Delta, you will not earn miles for those fares. In general, here are the points earned when flying the major US airlines as well as links to sign up for their loyalty programs. It is imperative that you sign up for any/all loyalty programs wherever you spend money, as those are free points just for staying/flying.
Delta SkyMiles member- 5 miles/$ spent
Southwest - 6 miles/$ for Wanna Get Away fare
American AAdvantage member- 5 miles/$ spent
United member- 5 miles/$ spent
JetBlue- 3 miles/$ spent
Frontier- 5 miles/$ spent
Likewise, each hotel brand has a loyalty program, the same principles apply.
Once you sign up for a program, make sure your account number is listed when booking a flight or hotel so that you get points for your stay. Let's take it a step further.
Partner Airline Credits
Most airlines are part of alliances, which allow for earning and redeeming points in a specific airline loyalty program when flying a different airline within that alliance.
For example, you can earn United miles when flying Ethiopian because they are both part of Star Alliance. If you add your frequent flyer number to a ticket operated by a different airline, you will get credit for miles in the program you choose.
When booking through a travel portal
Banks with flexible point programs, such as Chase, Amex, and Capital One, allow you to transfer your points directly to a variety of airline and hotel partners. But they also have travel portals that allow you to use your points for travel. Although you are using points, the airlines and hotels are seeing the booking as a cash transaction.
There are pros and cons to booking through a portal, but one positive is that you can still earn the appropriate points in your airline loyalty program, even though you haven't spent any money. Hotels often times aren't as generous, so don't expect to earn points on hotels booked this way. Again, it's important to make sure your loyalty number is attached to any reservations you make via the portal.
Booking through a portal also allows you to earn bonus points for certain credit cards that incentivize booking through their respective travel portal.
Chase: Chase Freedom Flex and Chase Freedom Unlimited (5%), Chase Sapphire Preferred (5x), Chase Sapphire Reserve (5x)
Amex: The Platinum Card from American Express (5x), The Business Platinum Card (5x) American Express Gold Card (3x), American Express Green Card (3x)
Capital One: Capital One Venture X Rewards Credit Card (5x)
Through Credit Card spend
This is where the bulk of your earning power comes from and it is important to be strategic in this area as well. There are multiple ways that CC spend will earn you points.
Sign Up Bonus (SUB)
The easiest and best way to earn large amounts of points is through the sign up bonuses that CC companies offer when you get their card and meet a minimum spend. They want to incentivize you to use their card and enter their ecosystem. These can range from 10k-150k points and more. Once you spend a minimum amount on the card within a set time frame, those points will post to your account.
When a card has an elevated sign up bonus, (like the Chase Sapphire Preferred or Capital One Venture X in the past) you want to consider if the card is a good fit for you and an opportunity to earn those sign up bonus points.
Earning categories
This is where you want to evaluate your personal spending habits in order to maximize your earning. As a rule you should try to avoid earning only 1 point/$. There are a variety of cards that offer bonus points in the most frequented categories, such as groceries, gas, travel, and dining. A few broad examples of bonus categories are:
Chase Sapphire- 3x dining, 2x travel
Amex Gold- 4x grocery/dining
Citi Costco- 4x gas (up to $7000/yr)
Capital One venture- 2x on everything
Chase Freedom Flex- 5x on rotating categories (up to $1500/qtr)
Citi Double Cash- 2x on everything
Here is a spreadsheet that compares many credit card features on my resources page.
The valuation power of bonus categories
I will get into using or burning points in a separate post, but I want to touch on it here to show the power of earning more that 1 point per dollar spent. Say you book a Hyatt room that costs $975/night but only 21000 World of Hyatt points.
This would yield ($975/21000pts= .046) 4.6 cents/point value.
This is a great use of points. Now for every point you have earned, you have received 4.6% value back.
Well, what if now instead of spending $21000 to earn those 21000 points at 1x point/$, you only spent $4200 on the Chase Freedom Flex at 5x points? Now you have earned a free $975 room by only spending $4200 ($975/4200= .23). A whopping 23% return on your spend. It goes to prove that maximizing the points earned leads to outstanding value when you go to use them.
Shopping portals
Instead of starting on a company website when buying something online, you can go through a portal with most credit card companies and loyalty programs, and earn bonus points on online shopping you would already be doing. If you check out cashback monitor, you can see here that when shopping at Nike.com, you can earn 4 extra points per dollar just by going through the Chase shopping portal or 3 extra points when going through the United portal and so on.
Conclusion
As you can see, there are several areas in your points earning sphere that you need to evaluate in order to make sure you are well positioned to earn as many points with each purchase as possible. It goes without saying also that you need to assess anywhere that you are using cash or a check and see if those vendors will take a credit card without paying a fee, allowing you to earn on that spend also. Consider your utilities, insurance, school fees, rent, charities, HOA fees, etc. and maybe there are untapped earning possibilities in your every day expenses.
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