I often hear the complaint that it's not worth collecting airline points because, unless you take regular flights, it simply takes too long to earn enough points to actually get a free flight.
It's a fair point if, like most people, you assume that the way to earn points and miles is by taking revenue flights (flights in which you pay cash for your ticket). In that case, you buy a ticket, take the flight and the airline awards you some amount of miles or points if you are a member of the airline's frequent flyer program or an affiliate program. That is certainly one way to earn miles. If you are a road warrior, like PointsPals' Ladi, you can rack up a lot of points (and earn elite status with airlines in the process) by taking revenue flights.
Let’s face it though, most of us aren’t road warriors where a company pays us to travel around the world for work and then reimburses us for our flights while we collect all the frequent flyer points. The reality is that the average person doesn’t take enough revenue flights to earn a substantial amount of points in a reasonable period of time. Perhaps you take a couple of flights a year. The result may be that it takes you several years to earn enough points to book an award flight. It’s hard to get excited about waiting years to finally earn enough points for a short haul flight in North America. It also makes an international trip, particularly one in business class, seem like an impossible dream involving years and years of saving up points.
Making matters worse is that the airlines occasionally devalue the value of the points and miles in their frequent flyer programs by increasing the number of miles it takes to book a trip or reducing the points you earn from a revenue flight. The end result is that after years of saving miles, at the end of the day, you still might not be even close to booking that dream flight to Europe or Asia.
So, how do we get around the problem of earning sufficient airline points and miles in a reasonable period of time?
a. Credit Card Sign-ups
There are numerous credit cards available in Canada which are directly affiliated with frequent flyer programs where every dollar spent earns you airline points (for example, Aeroplan and Alask Airlines branded cards). In addition, there are other credit cards that allow holders to earn a flexible points currency that can then be converted, among other things, to various frequent flyer programs (For Example the American Express Platinum card and the RBC Avion card).
Credit cards sign-ups can dramatically boost your airline points balance. When you sign up for a credit card it typically comes with a "Welcome Bonus". There are usually certain conditions you must meet to earn the Welcome Bonus, such as spending a certain amount of money on the card within a defined period of time. If you meet those conditions, the credit card issuer will provide you with a lump sum of bonus points. Depending on the card offer, that Welcome Bonus can provide you with tens of thousands of points in very short order.
b. Credit Card Referrals
Some credit card providers will provide you with bonus points for referring others to sign up for a card. In Canada, the credit card provider that provides referral bonuses is American Express. There are a couple of ways that referral points can help you add to your balance. First, when you refer someone to a card, you will receive a bonus, generally being thousands of points. A referral is simple, you send someone a link to your referral and they sign up from that link. If they sign up and are approved for the card, you get points for the successful referral.
The benefit to the person that you referred is that often the referral link provides a more generous Welcome Bonus than the regular card sign-up. So, it’s generally a win-win proposition for both parties.
In addition, often you can refer someone to a particular family of cards such that the person you are referring to does not have to actually take the exact same card that you have but may have a choice among a few cards in the same family of cards that are available through the referral link. This provides greater flexibility in card referrals.
If you can get your spouse or partner involved and refer cards back and forth (typically referred to as “2 Player mode” or “P2”), you can keep both the referral bonuses and increased Welcome Bonuses within the family and quickly accrue points. This can result in thousands of additional points.
If you don't have a P2, there is also the prospect of a “self referral”. That's when you send yourself a referral link and then you sign up for a different card within the same family of cards available from the referral link. The result being that upon approval you get the referral bonus (because the person you referred to, being you, has signed up through the referral link) and you also get the increased Welcome Bonus for signing up for the card via the referral link. It should be noted, however, that there are some instances where people have been refused the welcome bonus on a self referral, so P2 mode is certainly the safer way to earn the welcome bonus and the referral bonus.
c. Credit Card Spend
Another means of increasing your points is to put all of your spend on your credit cards. Forget. About. Cash. Forget about your debit card. To the extent possible put everything on your credit card. When you don’t pay with your credit card, you are missing out on points. If you think about how much money you might currently be spending in cash, debit card or cheques (yes, that’s still a thing for some people) and, instead, transfer that spend to a credit card, you will likely be earning thousands of more points.
It’s not just good enough to put all your spend on a credit card, though. You need to put in the effort to understand the bonus categories your credit card may have for different categories of spend. Some credit cards have different points multipliers for spend at the grocery store, on travel (hotels, airlines, etc), gas stations, pharmacies, streaming companies (Netflix, Spotify), etc. You can easily double, triple or 5X your points (I’m talking about you Amex Cobalt with your 5X grocery/dining spend).
When you have multiple credit cards, it can take some effort to keep clear what card to use for what category of spend in order to maximize your points. Personally, I tend to have a list of the various types of spend on my phone with the corresponding credit cards that I should use for that spend. I actually created the list because my wife was tired of being harassed by me to use the correct credit card for groceries, the gas station, the pharmacy, etc. Lucky for me, rather than simply visiting a divorce lawyer, she rolled her eyes and told me to create a list of which credit card she should use at different times (bless her soul for putting up with me and my hobby).
d. Shopping Portals
Another means of earning points is to buy things you planned to buy anyways through a points program shopping portal. For example, in Canada, Aeroplan has an online shopping portal as does Air Miles. By simply clicking through the portal and letting the portal direct you to the affiliated retailer’s website, you will earn points on the purchases you already planned to make anyways. For example, practically everyone shops online on Amazon. You should be sure to always visit Amazon via the Aeroplan e-store link so that you will, at a minimum, earn 1 Aeroplan point per dollar spent. Better yet, the shopping portals often offer promotions where you get multipliers per dollar spent – so, perhaps you could earn 5X Aeroplan points per dollar spent at Amazon.
By way of example, recently I was in the market for a new Apple Mac laptop and so I waited for the Aeroplan e-store to have a 10X point promotion for the Apple store on the shopping portal. As a result of that purchase, which I was going to make in any event, I ended up with 15,000 Aeroplan points for that one purchase, which is enough for an economy round-trip short haul flight on Air Canada or a one way economy long haul flight. I paid no more for the laptop than I would have had I purchased the laptop at the Apple Store or went directly to the Apple website.
Bottom line: Using a shopping portal is an easy way to significantly increase your points balance when you purchase items you intended to purchase anyways.
e. Some Caveats
Hopefully the above tips have changed the way you look at collecting points and miles. They do, however, come with some caveats.
Many of the top credit cards in terms of points earning power come with annual fees. In many cases, that annual fee can be quite hefty. Generally those cards will come with a myriad of perks, perhaps medical and travel insurance, purchase protection, free bags on a carrier, airport lounge access, discounts on gas, etc. Your job is to assess whether you are getting sufficient value from the card taking into consideration the points you will earn from a Welcome Bonus, what the card offers for a return on your spending, the perks the card offers and the amount of the annual fee. In many cases, the value of the points from the sign-up Welcome Bonus alone will more than off-set the annual fee. Also, in some cases a credit card issuer will offer a “first year free” (FYF) to allow you to test drive the credit card for one year and you will only be charged the annual fee in the second year (in which case you can cancel the card at the end of your first year before the annual fee is imposed). My point is simply this, there are some costs related to earning these points. If done right, the value of the Welcome Bonus and the particular perks offered by a card should be greater than any annual fee.
Now for the big WARNING – you should absolutely NEVER, EVER, sign up for credit cards and incur expenses chasing minimum spending requirements in order to obtain Welcome Bonuses on cards if you don’t have the financial ability to pay off those cards in full, on time, every time. You don’t want to be one of those poor souls who rack up debt on credit cards and can only manage to pay the minimum monthly payment. When you are borrowing money on credit cards at 20 – 30% interest rates, that is incredibly poor money management. Trust me, you would be far better off saving your money for a flight than paying exorbitant interest costs on credit card debt just chasing points. Just don’t do it. If you don’t have the discipline to only spend what you can afford on a credit card and can’t pay off your credit card on a monthly basis, this game is not for you.
f. Conclusion
Using the above strategies, you will be able to earn points far quicker than you ever expected. It is quite feasible to earn 100,000 - 200,000 points, or more, per year just following these techniques.
Now that we have an idea on how to maximize our earning of points, our next post will look at the next oft-cited criticism of points: "It's impossible to find award space".
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