Airline / Credit Card Points .... how?

I am certain that I am incorrect, as too many swear by the system

Most of my friends close to or in retirement who regale me with their airline and hotel points redemptions have massive stockpiles of points that were built up over their multi decade working years, years and activity that are in the rear view mirror. In reality, those miles and points have lost tremendous value over the years due to repeated devaluations of miles by airlines. In other words, they would have been better off spending those miles years ago.

I think it is pretty difficult for someone who doesn't still fly on a company's dime to accumulate the kinds of points needed to score these "free" tickets.

The points I accumulate with my CCs I use to pay down account balances. That amounts to several $thousand annually, hardly chopped liver. It isn't as exciting as a "FREE" ticket for bragging rights, but it works for me. As a result, I have very little airline loyalty anymore. I do continue to accumulate miles in various airline accounts, but it has been a very long time since I had enough miles to matter. Back in the 70s, 80's and 90's when I was a road warrior for corporate America, I accumulated and redeemed miles for multiple free tickets to Asia, Hawaii, and Europe, in business and first class, and I got the full value of those miles before the repeated devaluations in the last 2 decades.

I am no expert. That $52,000 gets me a minimum of 1.5% back if I solely used my CapOne, how much more is a guess as I also get with other cards 2% on restaurants and Amazon, 3% on shopping clubs and gas, and 5% on groceries. I am pretty certain this is more than a round trip ticket. I also do not care about clubs and lounges, nor hotel deals. And I have twice scored an immediate $400 cash credit on a new card, using to pay the bill for the ticket purchase, and then killing the card when the annual fee would later hit. My lifestyle would coincide with your parenthetical adjective.

I have on occasion asked here over the years what the true dollar amounts are for the worth of miles. I have never gotten a convincing answer, but I cannot believe the banks are giving the consumer a bigger gift with miles.

Tom is right. Generally it’s the bonus miles (upon sign up and spending the designated dollars) that make it worthwhile. 50,000-80,000 miles will do a trip easy.

When I decide to apply (not often), I make sure it is when I have a significant bill coming due. For me, that’s usually house and car insurance.

Most of my miles are on American, because that is my only choice when flying from home. So typically a Citibank works for that. I also have a Chase Sapphire for international rental car coverage (when Citibank dropped it) and that bonus transferred to United. Delta isn’t useful for me, so I have never looked.

I have often heard, but have no idea if it is true, that adding credit cards and even canceling credit cards, can affect your credit rating? Im pretty simple. I have had the same two cards for 20 years. Both have points. One i have set up to apply the cash against the balance and seeing the few dollars credit each month is nice. The other I just use and forget about the points Today i checked for the first time since i zero-ed it out about 2 years ago and I have 60,000 points which is worth about $600 cash. Wish we could still use the ROFL emoji,

MrE if you are really serious about trying to reduce the cost of travel you have to spend some time. Our son convinced me last while we were on RS Sicily. So I committed to it and in the last year we have acquired over 200,000 pts after using points for a Delta RT Seattle-London in Econ+ flt, plus three nights in tour hotel.
I use The Points Guy web site and the Travel Freely web site (very helpful for getting started).
My one most important rule is: “pay off every CC every month”
Chase was our largest points supplier.
Travel Freely will help you keep track of points and avoiding the second year annual fees.

I recently applied for Citi’s new Strata card. 75,000 signup bonus.

Spend some time, it can payoff.
Pm me if you like

I have often heard, but have no idea if it is true, that adding credit cards and even canceling credit cards, can affect your credit rating?

Yes, it is true, but it tends to be a small temporary hit (one to 2 months) on your credit score when you get a new card.

Canceling credit cards has a bigger and potentially longer lasting negative impact on your score than adding a card. For example, if you cancel a card you have had for a long time, you average length of credit history on your remaining cards will drop, and that negatively impacts credit score. Also, when you cancel a card, and your overall usage (meaning the amount you charge) on your remaining credit cards remains the same, your credit utilization rate goes up, and that is one of the key factors in your credit score - the higher your credit utilization, the lower your credit score, even if you pay them off every month.

If you read the "Points Guy" and similar advice on how to score more points for plane tickets, it is now all about signing up for new cards and earning the bonus points. But that is a vicious circle to fall into, and it will impact your credit rating more than simply getting a new card. People who do the credit card churn report having 10 to 15 credit cards at any point in time, and sorry, but that is just nuts to me.

DonP, I am not too worried about it. I just keep hearing people talk about it but I have never been able to figure out how it can save. Thought it a good question to kick around on the forum. Maybe I learn somehting. For me a ticket to Paris is about $50 so I guess, maybe my points will be good for that.

Beyond the sign up bonuses, the way I've been getting the most miles of late is from "gifts" from Delta. So when the video screen didn't work I got 3000 miles, every time my bags are late that's 2500 miles. My bags are almost always late. I had a trip to Seattle that I earned about 2000 in miles from the round trip flight and 8000 miles for the late bags and video screen. When I call customer service on an issue, they don't always cave, but they'll typically give me miles.

I always watch for sales on flights with miles. Off of a Delta subreddit I found a sale to New Zealand on points for 37,500 miles. I noticed the sale did not apply for those paying cash for the tickets. Therefore, I've been watching my points and any future sales. We now have some flexibility with travel dates so that's makes it easier.

The other ways I earn points are laughable--Uber, Lyft, restaurants, Starbucks, groceries.

By some act of God, I made medallion status last year. The mileage accumulator I think is double that of not having status. I've been watching my miles and my accumulated medallion dollars and if I'm close by year end, I might upgrade my Delta card to get me to medallion again. Really, what I've liked about the status is that my miles accumulate faster, I can have bags over 50 pounds and up to 70 which helps me when I go to Hawaii and when I bring home wine from Europe, and very occasionally an upgraded seat.

In the end, I still think Delta's program sucks, and like Tom, I rarely use my AMEX for every day purchases because I have several cards that pay me cash back. If Delta's cards had trip insurance, that I'd be all over.

The blunt truth is, that for the typical frugal spender, buying tickets on the cheap, in main cabin, flying a couple times a year; it is hard to ever amass enough miles or points to get tickets frequently.

If you want to accumulate miles/points, have a lifestyle that allows lots of credit card spend ($50,000 plus), buy premium class seats, do the CC churn to get lots of introductory offer miles/points, and fly more often on the same airline.

The other option is to travel for business frequently, having someone else pay, and hopefully spring for business class.

Paul, so the key to saving money with points is to spend too buy things that are more expensive than you otherwise would have? Yes, still not working for me. Maybe playing the card game, where you sign up for cards to get the introduction miles, but even that takes buing a lof of stuff in 3 months. Then I still have the question, what does adding a credit card or two a year do to your credit score? Not say, as I really have no idea. Maybe the bargain is in upgrades? If you like to fly in Business, then it works?

Because I live in the Philadelphia area, American Airlines is usually the best bet for flights. I do have and use an AA credit card, and use it for almost everything. I also use the shopping portal attached to the card. I don't buy anything differently because of this, it just slowly adds up.

I travel quite a bit, maybe 4-5 trips a year, usually economy, and it's the rare year that I don't have enough miles for one of the trips.

Don't most or all of these cards giving points have an annual fee?

LIZinPA good to hear it works for some. For that reason I will keep watching it.

Stan, I thought so, but when I looked, some dont. I gave all my money to Merrill Lynch about 20 years ago and they gave me this nifty black card with a $200 annual fee, but each year they wave it. It was pretty nice at first, but each year they cut another perk. But for nothing, I keep it.

Our Capital One credit card points can be used for travel, airlines, hotels. We buy everything with it.Very easy to book travel with it’s points.

re. annual fees, Many of the airline cards that have an annual fee have benefits that make the annual fee a wash. For example, the Delta Amex at the lowest level is $100, maybe $150, now, but has an annual credit equivalent to the fee. So, if you spend enough, and fly at least once a year, the credit washes out the fee. Further, there's free checked bags and other benefits. I've looked at the next level a few times, but they give a free domestic companion ticket which includes Hawaii and Alaska, now. What holds me back is that my husband and I rarely travel domestically together and when we go to Hawaii, we need very specific dates to match my daughter's spring break.

I think for many people a card that gives cash back could be a better value.

My calculation … Is the card worth the annual fee? I am already using a credit card for everyday purchases, so any perk is a plus.

I choose flights with the best combination of price and route; I live near a United hub so often the best choice is a United or Star Alliance flight. It took me 10 years to accumulate enough miles to fly business class one-way to New Zealand. The airline credit card cost me $65/year. That means the ticket cost me $650. The retail price of that ticket was about $4500. I feel that I got my money’s worth. I fly economy when I am paying and I decided a while ago that I would use my miles to upgrade on really long flights. NZ was about 19 hours of flying and 24 hours of travel time so that was a nice splurge.

My IHG credit card costs $49/year. I originally got the card because I was staying 60+ nights/year at an IHG hotel on business and this card had no foreign transaction fees and gave me a sign up bonus equivalent to 4 free nights. I get an annual free hotel night which I have always been able to use. Since every hotel night would cost me more than $49 if I were paying out-of-pocket, the benefit has always covered the annual fee.

The Alaska Airlines Visa card has an annual fee of $99, but that is more than covered with the free Companion Certificate you get each year and free checked bags on Alaska flights booked with their credit card. The Companion thing is not exactly BOGO; you pay regular fare for one ticket and the companion’s ticket costs $121 including taxes. So it is useful, for round-trip flights costing $300 or more. We have 2 and put them to good use each year.

The miles can be used for flights to Europe on any of Alaska’s One World partners (including American Airlines, British Airways, Iceland Air, Iberia) and also Condor, which is often the best deal at 55K RT. There are limited city pairs for using that; but you start at a city that is not served directly by Condor they will fly you to one that is on Alaska (usually Seattle but sometimes SFO or LAX; rarely JFK) but the miles required increases.

British Airways is not a good choice with miles, because of their high supplemental fees.

The sign-up bonus is 60K (65K if you pick up the application while on an Alaska flight.

Ah, Tom, good to know about Chase and BA! I didn’t realize that! You may have just solved the final leg of a massive trip I am taking in 2025 all with miles I have been accumulating. But that final leg wasn’t working out well. (United is not terribly useful for me, but I’ve made the miles work a couple of times in the last few years.)

I play the point game with credit cards. I have a few--American (2), Delta, British Airways, Hilton, IHG, and Marriott. I've had more but started to cut down.

My credit score has only once dropped below the top 5% in the past five years.

If you don't travel much, and travel coach most of the time, then getting a travel card may not be worth it. Unless the signup bonus is really good.

As an example, when I got my BA card, they were offering 100,000 miles if you spent $3000 on the card in the first three months. No problem. And 100,000 miles got me a round trip to London in business class. So that card was worth it.

Using the card could also get you extra miles. If say, I use the BA card for a fight on BA. Well, I get the miles for the flight but extra miles for the amount I spent on the card.

Sometimes you can get miles for one airline even if flying another. As long as the are in the same alliance.

And example, I flew Finnair yesterday. Instead of getting Avios in Finnair's FF program, I'm getting miles in my AA FF program. AA is my main airline so every little bit helps.

For hotel cards, the minimum you get is a free night each year and the yearly cost of the card is much less than the cost of the hotel room for the night. And on some hotel cards, you can convert your hotel points to airline miles. (It's not as good as it used to be.)

Some of the airlne cards also get other extras like priority boarding regardless of what class you are in, free checked bags, discounts on in-flight purchases.

But if you're taking Ryanair or Wizzair most of the time, you'd be better off with a cashback card.

Just how many dollars do I need to spend to get a RT ticket Houston to Budapest … that’s about 6,000 miles direct, but with a lay-over I am guessing 6,500 miles.

The number of miles flown is not the number of miles needed. It might be more like 50,000 to get you in economy from Budapest to Houston.

How many dollars you need to spend depends on the card. Many cards offer double miles on certain purchases like hotel, restaurants, gas, etc. Other cards, like Delta, offer you discounts on the number of miles needed if you have the Delta AMEX card and use if for the additional charges.

TTM, you don't count. You travel 9 months out of the year. Your life is a travel expense.

Where are my laughing emojis???

I am pretty sure if you wanted to, you could get one new credit card for the bonus, after deciding which airline would work best for your trip. Might cost you $95. Then over three months, spend $1,000/month using it. Then use your points to buy a round trip to wherever in the U.S. you want. Then downgrade the card to a free version. It won’t hurt your credit. Or cancel it - whatever.

You do have to plan either pretty far ahead or last minute to snag the miles flights. But if you buy way ahead and then have to cancel, the miles/points just pop right back into your account. You don’t lose them.

I don't spend $1000 a month.

Y’all are ganging up on me. Lol.

We gave up on using points for airline tickets some years ago for a number of reasons. However, we have successfully used our airline and credit card points for hotel stays. We often use them for last night airport hotel stays or a short stay along the way. We have also used credit card points to buy iPads.

I don't spend $1000 a month.

Well then, Mr. E, I think you've answered the question for yourself. These travel cards are not for you.

Assuming you pay your credit card bill every month, then getting a cash back card with no foreign transaction fees might be your best bet....if you were looking to get a new card.

Unfortunately, all the sign up bonuses for travel cards require a certain "spend" during a specific time period to get those points.

In case anyone is interested, the airline sells the points to the credit card issuer. The credit card issuer makes money from you using the card.

Sometimes airlines sell points to hotels and car rental companies. As an example, when I stay at a Hyatt property, I am awarded both Hyatt points and American Airline points even if I'm not flying American. The same is true with Hertz. When I rent a car, I have a choice of Hertz points or AA points.

Frank II, that was part of my opening question:

Then there is the, but if you use the credit card for everything else
in life, that adds to your points. Well, if I used a credit card for
everything that I could, that would accept a card, and would do so
without a surcharge, my spending isn’t going to be significant. I just
have a simple lifestyle (cheap).

Frank II,

Assuming you pay your credit card bill every month, then getting a
cash back card with no foreign transaction fees might be your best
bet....if you were looking to get a new card.

That is exactly what I have. I transfer money for my living expense for the week to the account then spend it back up to Zero. Saves me about $7 a week which I put in the coffee can for a nice bottle of wine.

Not sure Medicare takes credit cards. But I can check. Still, that's cheap. Home owner insurance and my local med policy don't. No car, so no insurance there. None of my utilities take a card either. Pretty much down to daily expenses and travel. RT airfare anywhere in Europe is no more than $250, and as little as $50 but, that's once every 3 months. Hotels, sure. Maybe $3000 a year at most.

I guess I am out of this game. But glad I asked as I understand it a bit better now.

https://www.experian.com/blogs/ask-experian/how-credit-cards-can-affect-your-credit-score/#:~:text=As%20discussed%20above%2C%20adding%20new,credit%20score%20improvement%20over%20time.

If you scroll past the garbage, the rest is interesting about credit cards and credit scores.

Such truths in all above replies. I, like Mr E, also find it hard to get miles in sufficient number to get free trips. Mine are almost always on sign on bonuses. if you live a lifestyle in which you stay at expensive hotels to garner points, more power to you. But i am thinking that $350 night in Europe is not a bargain even with points obtained. I try to keep in the $100 or below range.
I keep track of all my expenses in my entire life so I have exactly how much I spend and the miles I might accrue annually. No way could I get much beyond one way domestic with that. Without the sign on bonuses.
I have not seen any replies yet from those whom a casual first-class flight is a regular occurrence with their points. To the tune of 100,000 miles one way. If you are in the that class of travelers, it would seem you could easily pay for any flight since your spending is way up there in order to achieve that. More power to you, but don't advocate it in such a way that anyone can go that route. If you can afford $50,000 per person to go on that Antarctica cruise, you are out of my league.
Overall, to the vast majority of us, Mr E is not incorrect. And any expert in the system that may be able to explain it, but for those of us in the Mr E category will not be able to achieve it. Nor want to at that cost.

"Not sure Medicare takes credit cards"

The monthly Medicare premiums--Part B and D premium plus any IRMAA surcharges-- are deducted directly from the monthly Social Security (or OPM/FERS or RRB) payment. No option on this AFAIK or recall from my time at SSA. If you are in the somewhat rare situation that you have Medicare but are not in benefit payment status credit card is an option for paying your premium billing electronically and it seems there is no surcharge.

THank you Larry. Okay, TTM, I got $150 a month covered. $850 to go

Thank you Mr E. I've always wondered about Points and could not figure it out. I, too, have no monthly expenses that I can put on my credit card. I don't need anymore 'things' so that doesn't help. I rarely build up my points so I generally use the cash back, no transaction fees, cards, too. I do have an AMEX that has gotten me one free night, so far, at Logan before my flight. And BA points, from actual flights, gets me almost free nights at the Sofitel at Heathrow. So...a few hotel rooms are the best I can do. I now feel like I'm not so clueless. Thanks!

This is still fascinating to me so I am still playing with it.

If I choose the Chase Saphire Card I get 75,000 points if I spend $4000 in the first 3 months. Already got $450 of that figured out. In the next 3 months I will take at least one trip someplace in Europe, so that’s $2000 for hotel and airfare. The last $1,550 I guess could be on wine. Then I will need hang on to the card for, lets say 3 more months until my next trip. So, 6 months total which will cost me $600 in membership fees.

The Chase points have a cash value of 1.5 cents each. So that $600 membership fee will use up (offset) 40,000 points leaving me with 35,000 points which have a cash value of $525.00. That’s $525 for doing nothing but fill out some forms. More than that I guess, as do I get new points for the $4000 I spent in the first 3 months? Or do they say no double dipping?

Okay, who can fault free money.

If nothing else the card churning is a study in how profitable US
banks are that they can throw this quantity of generous bonuses
around.

No, I suspect they make a great profit off those that are not as savvy as you. Dont give people too much credit. I suspect a huge perecentage sit on their card for years not leverging it properly and loosing a lot of money.

I have often heard, but have no idea if it is true, that adding credit cards and even canceling credit cards, can affect your credit rating?

All I can tell you is that I have about 20-25 credit cards, and I get new ones from time to time, and my credit rating ranges between 840-870. .

I am late to this thread, but will say:

It's all a big game, and what you get out of it depends on how well you
play the game.

• the advice about getting bonuses from new cards is spot on.
• there is language for every bank/card about how often you can get the bonuses on a specific card and total # of cards you can apply for in a period (24, 48 months) of time. So you need to apply wisely for the cards which give you the points you will use the most.
• once you get the bonus, it may make sense to cancel the card so the clock starts ticking on when you can apply again and get another bonus.
• cards with annual fees can be worth it if the benefits are worth it
• bonus offers change all the time. Monitoring this is part of the game.

But, if you dip your toe in the pool, you should be prepared to commit to
spend the time to also utilize them to best benefit. Spending 350000 miles
for a ticket is a bad use of miles. Using miles on a BA ticket is not usually a
great idea since they add destination and fuel surcharges in. Using miles
to fly out of a UK airport costs a lot of $ on any airline since the UK airport
fees are so high.

Airline miles are a different currency than cash, and by that I mean that (except
for Southwest) the $ price and mile price often seem to be based on different
forecasting algorithms.

I used to collect BA Avios and use them for cross pond flights. But the fees for using miles was ridiculous--soemtimes half the fare itself.

Now I use BA Avios for intraeuropean flights. Recently, I flew London-Vienna in BC for 15,000 points and 1 GBP fee.
The only real difference between BC and economy on a BA intraeuropean flight is....the middle seat is blocked off, you get to board first, and you get a meal. Otherwise, it's the same seat as economy.

We used our Amex Platinum for rewards. Yes, the annual cost is high, at around $700, but the perks is has offsets that so we get more out of it than what it costs us. We get 5x the points for any travel or restaurants, which adds up quickly. We tend to hoard our points, and then I look to see where we can go for x amount of points. In the last 10 years or so, we have taken at least one trip per year using points. Sometimes it is the 2 of us and sometimes, 3 or 4 of us.

We also use Alaska Airlines for points, but do not have that credit card. We only have two cards, USAA Visa and the Amex. We have no need for anything else. The Alaska points are great in that you can get some great deals on domestic trips with points. I have flown to the Bay Area many times for 10k points round trip. I also booked my husbands trip to Iceland for July for 70k points r/t, and did that on a whim without researching etc. When I saw that, I jumped on it.

I just wish that I could use the Amex points on Icelandair.

It is a great feeling to be able to purchase airline tickets with miles and see the really low cash total (the taxes). But, I just ordered new sneakers off of Amazon with my credit card cash back. I tell myself this is savings towards any airline tickets. I do far better with cash back cards than I do with my airline credit card.

No, I suspect they make a great profit off those that are not as savvy as you.

Your instincts are spot-on. The money fueling those points and cash back come from somewhere, and that's from overdraft fees, interest paid by other cardholders, and the fees merchants pay for every credit card transaction. Here's a recent radio show (with transcript) from WBUR's On Point that talks about the Credit Card Competition Act. The CFPB is also looking into whether there's actually any real value to points and rewards given that credit cards and airlines can devalue points/miles at any time.