Getting Started with Points, Miles, and Credit Cards for Travel

Getting Started with Points, Miles, and Credit Cards

If you travel frequently or even just a few times a year, using points and miles instead of cash to pay for flights or hotels can feel like a dream come true. However, diving into this hobby can be overwhelming at first. I remember hesitating to use the points I had accumulated because I wasn’t sure how to use them best. Eventually, I overcame that fear and redeemed my points for an amazing trip to Vancouver, Canada, during Christmas.

There are countless guides on credit cards, how to earn and spend points or miles, optimizing travel through rewards, and many other topics. However, if you’re just starting and don’t know where to begin, this post will help clarify things for you. If you only know that you can use credit card rewards to book trips, you're in the right place.

What Are Points and Miles?

You might have heard of points and miles, but what exactly are they? Points and miles are types of rewards offered by many credit cards. The only difference between “points” and “miles” is the name; they function the same way. Airline tickets or hotel nights have a set price corresponding to a certain number of points or miles. If you have enough points, you can redeem them for a flight or hotel stay without paying the full amount in cash (although you will still need to pay taxes and fees).

For instance, you might book a one-way flight from New York to Atlanta for 5,000 miles and $5.60 in taxes and fees. Travel enthusiasts often refer to “transferable rewards” when discussing travel with points and miles. Many major credit card issuers like Chase and American Express allow you to earn points or miles through their cards, and you can transfer them to airline and hotel partners.

Why Are Points and Miles Important?

When you ask a travel rewards enthusiast why they engage in this hobby, the answer might be: “Without points and miles, I wouldn’t be able to travel the way I do.” This realization has motivated me to invest a lot of time and effort into earning points and miles. Without them, I wouldn’t have been able to afford a 10-day trip to Germany, staying in luxury hotels like the Andaz Munich Schwabinger Tor. I redeemed 40,000 World of Hyatt points for two nights there, which I earned through the welcome bonus of my Chase Sapphire Preferred card.

I also couldn’t have purchased a fixed business class seat from Newark Liberty Airport to Frankfurt for that trip. This cost me 60,000 Air Canada Aeroplan points, plus $58 in taxes, which I earned through the rewards of my American Express® Gold Card. Extended stays at high-end hotels or business class flights typically cost thousands of dollars. Points and miles allow you to enjoy those experiences without spending a fortune.

How to Earn Points and Miles

The easiest and most effective way to earn points and miles is through spending on credit cards. You will earn the most points from welcome bonuses when opening new cards. Card issuers offer welcome bonuses to encourage users to sign up. To receive these bonuses, you’ll need to spend a certain amount within a specified timeframe. For example, the Chase Sapphire Preferred card currently offers a bonus of 75,000 points after you spend $5,000 in the first three months.

Once you receive the welcome bonus, you can continue to earn more points or miles by spending on your card. Each card has different earning rates for points or miles, so selecting a card that aligns with your spending habits is crucial. If you often spend on dining and streaming services, the Sapphire Preferred could be a great choice with 3 points per dollar spent. But if you spend a lot on groceries, a card like the Citi Strata Premier® might be more suitable, as it also offers 3 points per dollar spent at supermarkets.

How to Redeem Points and Miles

Once you’ve accumulated enough points or miles, it’s time to redeem them for your trip. If the rewards you earned are directly from an issuer, the best way to redeem them is to transfer them to one of that issuer's travel partners. Not all issuers have the same transfer partners, so do your research before you start earning points or miles from a specific bank. For example, if you earned 60,000 bonus points from the Citi Strata Premier after spending $4,000 in the first three months, you can transfer those points to one of Citi’s 21 transfer partners; in this case, let’s say American Airlines AAdvantage.

After transferring your points to AAdvantage, they will become AAdvantage miles. When you find a flight you love that costs the same number of miles you have (or fewer), you can easily book that flight.