Beginner’s Guide to Miles and Points: How to Travel for Nearly Free
One of the questions I’m asked most often on Instagram is, “How do miles and points work?”
The simple answer: You can earn a large number of points from credit card welcome offers and redeem those points for flights and hotel stays. You’ll usually still pay taxes and fees, but points can dramatically reduce the cost of travel.
I’ve used miles and points to book everything from family vacations to business class flights that would have cost thousands of dollars.
This beginner’s guide will walk you through what you need to know before applying for your first travel credit card.
For example: The current welcome offer on the Chase Sapphire Preferred® Card is 75,000 points after spending $5,000 in the first three months.
Those points can be transferred to several airline and hotel loyalty programs, including United, Southwest, Air Canada, Air France/KLM, Virgin Atlantic and Hyatt.
Depending on where and when you travel, 75,000 points could cover:
2-3 domestic flights
2 roundtrip flights to Europe in economy
A one-way business class flight to Europe or Asia
2-6 free hotel nights
Credit card welcome offers are one of the fastest ways to earn miles and points. Instead of earning only one or two points per dollar on everyday purchases, you may earn 75,000 points or more after meeting a new card’s minimum spending requirement.
The key is to use the card for purchases already in your budget, meet the minimum spend and pay the balance in full every month. Miles and points are never worth going into debt or paying credit card interest.
Before you apply for your first credit card
Before you apply for your first credit card there are a few rules and guidelines that you need to know. Keep in mind that traveling with points means you will be applying for more than one credit card over a certain period of time. So this prep work before you begin is essential to staying organized.
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It’s important to know what your credit score is before you begin.
You can check your credit score for free at Credit Karma and Credit Sesame. If you currently have a credit card, log in to your account. Many cards offer free credit score checks just by holding the card.
Most travel rewards credit cards are designed for applicants with good to excellent credit, but approval is never guaranteed. Banks may consider several factors, including your credit score, income, payment history, existing debt and the number of credit cards you’ve recently opened.
Applying for a card may temporarily lower your score by a few points because of the hard inquiry. Paying every bill on time and keeping your balances low are two of the most important habits for maintaining healthy credit.
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Airline and hotel loyalty accounts are free, but you don’t need to open every account at once. Start with the programs you’re most likely to use and create additional accounts when you’re ready to transfer points or book a trip.
Each traveler, including children, will need their own airline loyalty account. Make sure the name on your loyalty account matches the name on your credit card rewards account before attempting to transfer points.
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When you first start earning points, you’re going to apply for a new credit card every three to four months depending on your trip goal and budget. There are many ways to keep track of the new credit cards you’re getting.
It’s very important to know the date you applied for a card, date you received the bonus, annual fees, number of points you have and when those points expire. Some people keep a spread sheet, and some people keep the information in a notebook.
You also need to keep track of all the airline and hotel reward account numbers and passwords. Trust me on this one. If you start keeping track of this early, you’ll save yourself a lot of headaches later.
I have an entire post on the tools I use to keep track of my cards and points in this post.
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This is so important when you’re first starting out and building your “stash” of points. If the goal is Europe or Asia, then the Southwest card won’t be one of the first cards you get.
This post contains credit card referral links. I may earn referral points if you apply through one of my links. As always, only apply for a credit card if you can meet the minimum spending requirement within your normal budget and pay the balance in full.