• What are miles?
Miles used to be synonymous with flying a certain distance and then earning that amount of miles. That is no longer the case with most airlines. Most airlines now give you points/miles based on the cost of the ticket, not how far the flight actually is. Generally speaking, a mile or a point is a form of currency to which you can use towards free travel.
• What do credit cards have to do with frequent flyer miles?
Credit card companies have teamed up (co-branded) with airlines and hotels to provide loyalty programs and incentives to travelers. By using their credit card, they are forcing you to redeem your points/miles on a specific airline or hotel chain. (There are exceptions to this like the Chase Sapphire card) Credit card sign up bonuses are one of the quickest ways to earn points/miles which is why you will see many posts containing the best current credit card offers.
• Are all frequent flyer programs the same?
No they are not. Some airlines call their currency points while others call them miles. Regardless of the name, they are referring to the same thing, currency. Some FF programs have strict rules about redeeming your points while others are very lax and offer great redemption options. American Airlines, for example, will charge you a $75 fee if you redeem your points within 21 days of the flight, that is lame! The same logic applies to hotel loyalty programs, they all vary based on earning and redemption rates.
• What is the fastest way to earn free flights and hotel stays?
The fastest way is to sign up for credit cards with a hefty sign up bonus. Most credit cards offer 25k-50k points/miles, which are usually redeemable for about $400-600 in free flights or hotel stays. This value you can get out of the points varies by company so it is best to read my posts and stay current on the best offers. Peak seasons also bleed into the point/miles world. If you want to go to Hawaii at Christmas time, good luck finding availability, that is one of the busiest times of the year. My golden rule when maximizing travel is to be flexible. If you pick your destination and date first, you are going to forced to pay for whatever is available. If you can agree on a month window and three destination options, you should be able to stretch your points farther.
• I have a credit card that already earns me miles/points, why should I sign up for another card?
Let’s say you have a 2% card that gives you 2 points per every dollar spent. You would need to spend $25,000 before you hit 50,000 points. That means you would have to spend over $2,000 a month for one year in order to receive 50k points, worth about $500 in free travel. Signing up for one credit card can earn you the same amount of points and you will only have to spend $1,000-$3,000 dollars to receive the bonus.
• Can the credit card company get me in trouble for signing up just to get the points?
Absolutely not. There is nothing illegal about signing up for a credit card with the sole intention of receiving the sign up bonus and then cutting up the card. Some credit card companies will only allow you to receive the same offer every few years so be sure to read the fine print before applying again. To confirm, there is nothing unethical or illegal about signing up, meeting the requirements, and cutting the card in half. Of course you will want to retain some cards to use for everyday expenses, that is why credit cards offer spending bonuses, such as 3% points on groceries. Do your research and figure out which of your cards will earn you the most points for each transaction you make. Keep your oldest credit cards open and balance free to help boost your credit history and utilization.
• When you say free travel, do you really mean free?
There are always going to be small fees here and there, but I commonly take trips that only cost me $20 for the flights and hotels. For flights, you always have to pay the $5.60 security fee each way, every time. Hotels do not charge any fees or tax when using your points for free nights, with the exception of a ‘resort fee’. (IE: Las Vegas). Some credit cards have annual fees (most are waived the first year) but I commonly call the credit card company and ask that they waive the fee upon renewal. Your mileage my vary, but many companies want to keep your business so they will sometimes find ways to offset your annual fee.
• Okay, this is a lot to take in, where do I start?
I will answer your question with a question, where do you want to go? You first need to see what airlines fly to your destination and what hotel options you have there. Once you have that nailed down you can start looking for credit cards that will allow you to travel there for next-to free. Check out AirfareWatchDog for links to where each airlines flies. For hotels, check out AwardMapper to see what hotel options are available and how many points it requires per night.
• I want to travel somewhere overseas, what credit cards should I get?
Almost every major airline is apart of an alliance. Check out this wiki on the different airlines and what parent alliance they are apart of. Most domestic airline credit cards, United for example, will allow you to redeem your miles on many of the airlines in their alliance, Star Alliance. Airlines use code shares which can even allow you to fly two different airlines on the same itinerary, as long as the airlines are under the same alliance. (and have code share routes to where you are heading)
• Are there any airlines that I should avoid?
I will let you decide that, however I will give some pointers. Spirit Airlines, Frontier, and Allegiant are some of the worst rated airlines. Spirit, along with Allegiant and Frontier, are fee based “low cost carriers”. They make most of their money by charging you for everything along the way. $2 for water on the plane, $30 for a carry on bag, $35 for a checked bag, $8 to get a seat assignment. Even worse, they charge you almost double for your bags once you get to the airport since they have you right where they want you. Don’t be fooled by extremely low ticket prices from these airlines, they have very low rated customer service, and they have many cancelled flights along with frequent delays. The biggest reason for cancelled flights is that they don’t have large infrastructure like the other big players. If a plane is taken out of service for maintenance, there is a good chance they don’t have a back up aircraft to take its place. You may be thinking, “That’s fine, I will just take the next flight”. Well that is a problem too. You see, these airlines usually only fly once or twice a day on the same route. Some, like Allegiant, only fly certain routes twice a week, good luck waiting on standby for the next flight out.
Of the big players, United has the lowest customer satisfaction, they seem to be stuck in the old days. On the flip-side, Southwest, Alaska, and JetBlue are the highest in terms of customer satisfaction.