Beginner's Guide to Earning & Redeeming Credit Card Points for Travel

When we can’t find a good cash price on airfare or hotel, many of us turn to miles or points to stretch our travel budgets.  Traveling on points involves a significant learning curve and there are potential pitfalls to be avoided.  Here are some important things to consider before you embark on your travel on points journey.

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Cash-Back Fans vs. Points Earners

Leveraging points may require a mindset shift, especially if you have been focused on earning cash back on your credit cards.

There are two types of credit-card users:

1.          People who prefer simple cash-back rewards

2.          People who strategically earn points or airline miles

I fall squarely into the second camp for one key reason: the math works in favor of point-earners.  Here’s a quick comparison of what $10,000 in annual credit card expense can get you:

• Cash-back card – you’ll earn about $200–$350 back, depending on whether your card offers a flat rate or a tiered rate based on spending category.

• Points-earning card -- you can accrue between 20,000–40,000 points, depending on your card’s earning categories and how skilled you are in taking advantage of earning multipliers.  These points translate to $500 to $5,000 in flight or hotel value, depending (again) on your skill in redeeming these points.

That’s a massive difference in value.  If your goal is to travel more often and possibly better than you have in the past, the preferred strategy is clear.  

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Branded Points vs. Flexible Points

For years, I earned just 1 point per dollar on my United-branded credit card. I was loyal but earning points at a glacial pace—and I knew I’d never reach my dream of premium cabin travel that way.

Everything changed when I discovered the power of flexible points from the following cards:

·       Chase Sapphire Preferred or Reserve, or Chase Ink Preferred (choose one)

·       American Express Membership Rewards cards (Platinum, Gold or Green – choose one)

These cards offer solid earning structures and access to valuable transfer partners. With Chase, I can transfer my points to 14 different airlines or hotel chains and with Amex, there are over 20 options.  

Instead of being locked into a single airline program where my points are “stranded” if I can’t find a good redemption, I can transfer those points to the airline that offers the best redemption for the date(s) I want to travel.  That flexibility opens doors that airline-specific cards can’t match.

For example, I typically book lie-flat business-class seats between the U.S. and Europe for 50,000 points each way on average plus about $200 in taxes.  These flights retail for around $5,000.

Status Seekers vs. Free Agents

If you travel frequently for business—and your employer lets you choose your airline or hotel—then pursuing elite status can pay off.

But if you’re trying to earn status on your own dime, it’s often not worth the extra effort and expense.  Perks like free airline upgrades aren’t as generous as they were years ago. Requirements for achieving and maintaining status continue to increase.  The smarter approach for most travelers is to think like a free agent.  While I still enjoy traveling with United, I’m no longer locked into one airline. I have other choices. 

Being a free agent means:

·       You chase the best available flight or hotel deal

·       You use flexible points to book whichever airline offers the best redemption

·       You aren't tied to one loyalty program that limits your options

Using this strategy, in the past two years I’ve flown lie-flat business class to Europe on Iberia, LOT, Austrian, KLM — and yes, even United -- all without waiting years to build a mileage balances in a single airline account.

The Learning Curve Is Real

Learning how to earn and redeem points takes some trial and error.  Beware of the “experts” on Facebook who will encourage you to sign up for a new credit card every month. Chasing sign-up bonuses is known as card churning, and it’s a risky, short-term strategy that will negatively impact your financial relationship with banks.

If you want a structured, sustainable way to build points, start with the JGOOT (Just Get Out Of Town) method. Their eBook, The JGOOT Way of Travel, offers step-by-step guidance on how to earn and redeem points to travel better and more frequently. You'll also get their best practices on how to find the lowest-priced airfares. For just $7, you'll get a complete system on how to travel better and more frequently.

Download their eBook and get started.