The Beginner's Guide To Credit Card Rewards: Points & Miles 101

Contents

1 Points & Miles 101
2 Our Favorite Rewards Credit Cards
3 Earning Points & Miles
4 Frequent Flyer Programs
- 4.1 Elite Status
- 4.2 Airline Alliances
5 Points & Miles Tips
6 Bottom Line

If you’re using your debit card to make purchases, then you’re missing out on some serious freebies. With a rewards credit card, you at least get something in return for your spending. You get zilch with a debit card. Not only that, reawards cards often come with extra benefits like baggage delay insurance and purchase protection.

But before we delve into all things points and miles, we want to remind you to never spend more than you can afford. While earning rewards might get addicting, those freebies aren’t very “free” if you’re digging yourself into a deep, financial hole.

See our list of the best credit card bonuses here.

Now that we’ve gotten that out of the way, let’s talk about points and miles!

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CHASE SAPPHIRE RESERVE^®

The Chase Sapphire Reserve® card is offering 60,000 bonus points (worth up to $1,200 in travel per our valuations). You’ll need to spend $4,000 on purchases in the first 3 months from account opening to qualify for the bonus. These 50k points are redeemable for $750 toward travel through Chase Ultimate Rewards.

This is a premium travel card with a premium annual fee of $550. But, you’ll receive premium benefits such as 5X points on air travel, 10x points spent on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after earning your $300 annual travel credit, 3X points on all other travel and dining, and 1 point per dollar spent on all other purchases.

The card also features an application fee credit (up to $100) for Global Entry or TSA Pre✓^®, access to 1,300+ airport lounges with Priority Pass Select, and 50% more in travel redemption through Chase Ultimate Rewards. With Pay Yourself Back^SM, your points are worth 50% more for existing purchases in select, rotating categories.

Card Review

Points & Miles 101

Points and miles are currencies issued by credit cards, airlines and hotel chains to reward you for your loyalty. Hence the term, “loyalty program.”

You earn points or miles every time you take a trip or spend using your rewards credit card. Once you’ve racked up enough points, you can trade them in for travel rewards:

Use airline miles for airline tickets.
Use hotel points for hotel stays.
Use credit card points to book all types of travel.

But keep in mind, not all points and miles are created equal. The average currency value varies greatly from program to program. Our valuation guide is a good source to find the approximate value of your points and miles for the current month.

To figure out the value of your points when used towards a specific award, divide the cash price by the number of points.

Value Per Point = Cash Price / Total Points

As a rule of thumb, you want to avoid awards that yield a lower value than what is listed in our valuation guide. If you come up with a higher number, then it’s a great redemption.

For some programs, you’ll also be able to transfer your points to other loyalty programs. While this method takes a lot more grunt work, it offers incredible flexibility and is the best way to maximize the value of your rewards.

Our Favorite Rewards Credit Cards

There are a ton of credit cards that offer rewards. So if you’re just starting out, it’s tough to figure out which ones will best fit you and your lifestyle. Make the process easier by first considering our favorite rewards credit cards below:

REWARDS PROGRAM	CREDIT CARD
American Express Membership Rewards®	The Platinum Card® from American Express American Express® Gold Card Amex EveryDay® Credit Card Amex EveryDay® Preferred Credit Card American Express® Green Card
Capital One® Rewards	Capital One® Venture® Rewards Credit Card
Chase Ultimate Rewards®*	Chase Sapphire Reserve® Chase Sapphire Preferred® Card
Citi ThankYou® Rewards	Citi Premier® Card

*In order to qualify for a Chase card, you can’t have opened five cards or more in the last 24 months. For more on the “Chase 5/24 rule,” click here.

You might have noticed that all the cards we mentioned above have one thing in common: they earn transferable points. That means you can convert the points you earned on these cards into airline miles and – depending on the bank – hotel points.

Having a network of transfer partners increases the value of points because you can use them to book award flights across all airline alliances (more on that later) as well as free hotel stays at luxurious properties.

If you often fly with a particular airline or you frequently stay with a specific hotel chain, then you might want to consider a co-branded credit card. But keep in mind, these are limiting because you can only redeem your rewards with one specific airline or hotel chain.

Our favorite co-branded airline credit cards include:

And our favorite co-branded hotel credit cards include:

Earning Points & Miles

WELCOME BONUSESSHOPPING PORTALSBUY/FLY/STAY

The easiest way to earn points and miles is through welcome bonuses offered by the credit card. In most cases, you’ll get a large number of points if you spend a certain amount of money within a certain time frame.

The time it takes for the introductory offer to hit your account depends on the issuer. Officially, the timelines are:

BANK	BONUS TIMELINE*
American Express	8 to 12 weeks
Capital One	2 billing cycles
Chase	6 to 8 weeks
Citi	8 to 10 weeks

*The bonus timeline was independently collected by MoneysMyLife. Check the fine print of the issuers get the most accurate information.

Another way to earn points and miles easily is to shop online using the card’s shopping portal. Instead of going directly to Apple.com to buy the latest iPhone, for example, head to the shopping portal first. It will take you straight to Apple.com. You’re still buying the iPhone from Apple, but you’ll also earn points, miles or cash back while you’re at it.

If there’s a certain rewards currency you want to earn, check to see if it has a shopping portal. Using online shopping portals combined with the right credit card (that earns bonus points or miles on the purchase) results in “double dipping.” This technique is something seasoned rewards hackers do on a regular basis.

You’ll also earn rewards for buying, flying or staying with your rewards card. Rack up points or miles when you make purchases within bonus categories. That means frequent flyer bonus miles for flying with a specific airline, hotel loyalty bonus points when you stay at a participating property, and more.

While buying, flying and staying aren’t the fastest way to earn rewards, these small purchases will add up in the long run.

Frequent Flyer Programs

Each airline (or airline group) has its own frequent flyer program with its own rewards system and currency. If you join a frequent flyer program, you’ll earn miles every time you travel with the carrier. These rewards will add up over time until, eventually, you’ll be able to redeem them for a free flight.

There are 10 major airlines in the United States:

The four biggest airlines – in terms of size and passenger volume – are American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.

Elite Status

Frequent flyer programs reward their most loyal customers with elite status, which unlocks additional VIP benefits to make their travel more smooth and comfortable. The value of elite status is different from airline to airline.

Airline Alliances

Now that we’ve gone over frequent flyer program basics, let’s get into airline alliances. There are three major airline alliances: Oneworld, SkyTeam and Star Alliance.

The carriers within each alliance “play nice” with each other, letting frequent flyer members use their miles from one program to book award flights on another airline. These partnerships allows each carrier to broaden their reach and offer award destinations around the world.

ONEWORLDSKYTEAMSTAR ALLIANCE

Fiji Airways is affiliated with Oneworld, but the carrier is not a full member.

Click here for the most up-to-date list of oneworld members.

Aeroflot
Aerolineas Argentinas
Aeromexico
AirEuropa
Air France
Alitalia
China Airlines
China Eastern
Czech Airlines
Delta Air Lines

Garuda Indonesia
Kenya Airways
KLM
Korean Air
MEA
SAUDIA
TAROM
Vietnam Airlines
XiamenAir

Click here for the most up-to-date list of SkyTeam members.

Click here for the most up-to-date list of Star Alliance members.

Points & Miles Tips

LOYALTY LANGUAGETRAVEL GOALS & STRATEGYGETTING STARTED

There are certain terms in the points and miles world you need to be familiar with, including:

Award redemption. When you use your points or miles to book a free flight or hotel stay.
Award availability. The seats on a specific flight, or the rooms at a hotel property on a specific night, that can be “paid for” with points or miles. No award availability means they’re sold out.
Transfer ratio. The number of points or miles you transferred compared to the number of points or miles you’ll get after the conversion.

What are your travel goals? Do you want to save your rewards for a first-class seat on an award flight? Or would you rather forego luxury travel for plenty of free flights in economy? Once you determine what you want to do with your points or miles, you can start strategizing your redemptions. If you need help, check out our guides on:

Best ways to use airline miles:

Best ways to use hotel points:

So how do you start earning rewards on credit cards? Follow our steps below:

Check your credit score.
Apply for a rewards credit card that suits you and your spending habits.
Sign up for frequent flyer programs with airlines you often travel with.
Sign up for loyalty programs with hotels you often stay with.

Bottom Line

Joining a loyalty program gives you a way to earn rewards for spending with a particular airline, hotel chain or credit card. Having a rewards card in your wallet makes it easy to earn points or miles quickly with its welcome offer and bonuses on spending. But as with any credit card, you’ll want to be cautious with your financial habits.

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