Ever wondered what credit card miles are all about? Or maybe you’ve got a nice collection of your own and don’t know what to do with them? Welcome to the world of travel hacking! It’s not just about collecting miles and points; it’s about unlocking unique travel experiences. In this post, we’re breaking down credit card miles, so you not only understand their value but also know how to get the best bang for your buck. Whether you’ve already got a stash or you’re looking to start collecting, it’s crucial to know how to use them. Let’s make travel hacking easy and make your miles and points work harder for you!
First off, What are miles, and how to get them?
If you’re unfamiliar with miles, here’s a real brief recap. Miles and points are the currency of credit card travel rewards. (For simplicity we’re going to refer to both as miles.)
Miles can be earned through two primary channels: by flying with specific airlines or by making eligible purchases and taking advantage of credit card opening bonuses.
Both flying and credit card activities can accrue miles, but unless you’re a frequent traveler with a particular airline, the most efficient way to accumulate miles is through credit card opening bonuses and everyday purchases.
To learn more about earning miles, check out this post!
How to use Credit Card Miles
Whether you’re here just getting started or because you’re ready to get the best value, This is where the real fun begins.
The first thing to understand is that while miles and points are very similar, they can also be very different.
For example: 50,000 Capital One miles are not the same as 50,000 Chase Reward points or 50,000 AMEX Membership reward points. Sure, they all stem from spending, and they all lead to great experiences. However, the way they’re earned and the value they carry can differ significantly.
Each issuer has its own platform for redemption so it’s important to have a baseline knowledge of the platform associated with your current card or future card. For instance, American Express relies on the Member-Rewards Portal, Chase operates through the Chase Ultimate Rewards Travel Portal, Capital One has its Capital One Travel Portal, and so on.
Within these portals, the standard redemption rate hovers around 1:1, translating to one mile or point being equivalent to one cent. However, Chase, with its Sapphire Preferred, stands out by offering a 1:1.25 ratio. In practical terms, 50,000 miles would roughly amount to $500 when used for travel bookings through brand-specific portals. Or, with Chase, the value extends to $625.
Some banks, such as CapitalOne, let you not only book with miles but also erase travel expenses. You can fly to Asia, use an Uber, and book a hotel—all while utilizing miles to wipe out these costs. This is still done at a 1:1 rate.
Keeping this in mind, we establish a baseline redemption rate of 1:1. Regardless of the scenario, redemption through the portals guarantees a consistent 1:1 exchange, or 1.25 with Chase’s special offering.
Transferring Credit Card Miles
Although redeeming through the portal offers convenience, it will likely not yield the best value. To maximize the value, you can transfer these miles to travel partners like airlines and hotels. This is a benefit of most programs, with each reward program having its own unique partners, necessitating brand-specific research. Most miles transfer at a 1:1 or 1:2 ratio.
Now before you freak out with confusion, hang tight, we’re getting to the good stuff.
With your miles transferred to a partner, you gain the flexibility to book flights directly through the airline’s platform. So, instead of paying the cash value, you can now leverage their distinct mileage programs. In many cases, you will find that certain routes will be shown with a high dollar amount but a surprisingly low mileage cost. Starting to see the possibilities?
Let’s make this concept clear with an example.
A round-trip ticket from Denver to Hawaii can be priced as high as $800 with United Airlines. Using Turkish airline miles, the same journey can be covered for just 15,000 miles.
Given that Capital One has a partnership with Turkish Airlines, you can transfer 15,000 miles from Capital One and book that flight. Instead of the standard 1:1 redemption rate through the portal, you’d be enjoying a remarkable 1:5 ratio. ($800/15,000=0.05) In simple terms, that translates to a staggering 5 cents for every mile! Check out how we did just this.
I must confess, this is an extreme example. More than likely you will be getting 1:2 – 1:4 cents per mile as opposed to the 1:1 you’ll get in the portal. Chase Points can transfer to United and you can book this same flight for roughly 25,000 points. This is still giving you a rate of 1:3. Far better than the 1:1 you’d get in the portal.
Another simple example; we just booked Salt Lake to Los Angeles for a specific date in March. The cash value was $150. Instead, we transferred 8,000 points to Qantas and booked the flight for what would equate to $80 when considering 1:1.
For a full list of examples, check out our page on “Where Will Your Miles Take You?”
These are just a few examples of the vast array of possibilities. There are thousands of routes and scenarios where leveraging travel partners can significantly boost the value of your miles, almost always beyond what you might achieve through standard portal redemptions.
To recap, if you consider the 1:1 value of the portal that flight to Hawaii would’ve cost us $800 or 80,000 miles. Because we transferred our points, it cost us 15,000, or the baseline equivalence of $150. So, you’re essentially saving $650 by using miles instead of cash.
Flying in Luxury
Now, to truly get the best value for your miles, you’ll want to look toward business and first-class awards. These types of tickets can cost thousands of dollars. Or, you can transfer miles to a partner and book the flights for less than 100,000 miles.
An example could be Salt Lake to Paris in first class for $7,500. By transferring to a partner such as AirFrance or KLM, you could potentially book the same flight for 75,000 miles. $7500/75000 = 1:10. This is a wild redemption when you consider the portal is 1:1. With that ratio, this trip would cost you 750,000 miles.
Where to Begin?
The most important step is to figure out what you want and to start learning. Do you want to fly to Europe? Figure out which airlines go to Europe and which credit cards transfer to the desired airlines. Most airlines that make that trip will do so round-trip for 60,000 points or miles. You may be better off getting a generic travel card that earns points that can be transferred to a variety of airlines. Again, check out our Miles Page.
If you’ve already got points or miles, the process begins the same. Figure out who your transfer partners are. This doc is a great resource and will give you the information you need. From there you can again figure out which airline you need to transfer to to get where you want to go.
It can all seem like a daunting task but as you figure it out, you’ll realize how incredible it is. Do a little research or reach out to us and we’d love to help you book that dream trip!
Good Redemption or Bad? Cash or Miles?
Now that we know what miles can be worth, it’s important to understand when it’s good and when it may be bad. You’ve probably already caught on to the idea, but we’ll review it briefly.
If we know that we can always get at least 1:1, then that’s our reference point. If we know this, then we know that 50,000 miles is always equal to at least $500. Knowing this, we can accurately determine whether the deal we’re looking at is good or bad.
Example: A flight costs $400. You can pay cash or 40,000 miles through the portal. Or you can transfer miles and potentially book the flight for 30,000 miles. You can see the answer. Transfer those miles. If you’re looking at a flight that costs $400 or 50,000 miles, you’d be far better off just using cash.
However, the decision to use cash or miles comes down to personal preference as well as mileage availability. Early in our travels, we used capital one miles to erase our flight purchases. This isn’t always the best value, but it worked great for us and we were happy doing it so it didn’t matter.
Conclusion.
The world of points and miles is big and crazy, but it’s nothing to be feared. Use your credit card miles to book through portals, or transfer them to partners and open up the world.
Don’t think you have to do something big and fancy. Start small and get your feet in the door. You’ll get better as you learn and experience, fly further, and never look back!
We’ve since gained a better understanding of how valuable miles can be and we’ve worked harder to save our miles and to use them wisely. We’ve found it’s better to use cash if we can and to save the miles for better redemptions. Such as 35,000 miles for a round-trip ticket to New Zealand.
Additional
Where will your miles take you? Check out our growing list.
Get yourself a credit card and start small. A great easy card is the Capital One Venture. It’s easy to use and a great starter.
Anything is better than nothing. Sure you want to get the best redemption but at the very least, an opening credit card bonus can you get really far in the world of travel.
Award Hacker is a great site that shows you what’s possible. It’s not for booking, but it shows you what’s possible for the desired routes. Mess around with it and you’ll see how far miles can really get you. It can be a little confusing though so go in with patience.
There are people and groups all over the internet showing how to get the most out of your miles and how to find these high-value, low-mile flights. The point of this article is to show you what your miles are worth. A little digging and you’ll see how incredible this can be.