Yes, it’s a ridiculous clickbait title, and not a very good one at that. But the thing is, many self-evident truths that are elementary to us seasoned hobbyists are not so elementary to normal folks.
What do you mean you don’t know that British Airways Avios currency is redeemable on American Airlines? You see a card called Chase British Airways Signature Visa and it’s not immediately obvious that you can use the miles for flights within United States?
So, I wanted to highlight some of the most common questions, objections and fears I’ve heard from my friends so far. I’m sure many of you will be able to relate.
1) How hard is it to transfer flexible points to loyalty programs?
It’s actually very easy. You go to airline program’s website, sign up for a free membership, log in to your credit card profile and then transfer your points. Voila! Few months ago I got an email from our good friend Nate (he said I could use his name) and he wanted to transfer some UR points to Southwest. I sent him simple instructions and he was so proud that he was able to pull it off.
Imagine that: a highly intelligent hospital IT manager can figure out (mostly) on his own how to transfer UR points to Southwest! But people are absolutely baffled by this hobby and its perceived complexity. To be fair, I would never say that ANYONE can do it. I realize that certain amount of intelligence is required. But if you can manage IT systems at a hospital, I think, call me crazy, you can figure out various airline programs and partnerships.
BTW, here is Nate. I asked him to be my black stock photo model and pose with his Chase Sapphire Preferred. He cheerfully agreed. This guy is always happy and smiling. It’s disgusting…
2) This sign-up bonus sounds perfect. The only problem is, I don’t want to renew the credit card and pay next year’s annual fee in order to keep the miles safe. Your thoughts?
You don’t have to renew your card unless we are talking about flexible points, specifically Chase Ultimate Rewards, Amex Membership Rewards or Citi Thank You points. You do have to have an active card in the first two programs in order to preserve flexibility and retain the points.
Citi is a bit different in that your points will expire few months after canceling the card that earned them. It can be tough to decide what to do with the flexible points-earning card, but you can always redeem your stash on gift cards. I have done it before because I didn’t want to pay the annual fee.
But if it’s an individual mile/point such as AAdvantage or Southwest Rapid Rewards, you don’t have to have the co-branded card open in order to preserve your points. The key is to have some activity in your account.
The rules vary, but in general, you have to earn or burn miles every 18 months. With Southwest, the rules are a bit different. You have to earn points every 24 months. It’s very easy to do because most programs partner with shopping portals and even 1 mile (earned or redeemed) will preserve your stash. So go ahead, cancel that co-branded card if you must. Well, wait at least six months or so after you get the sign-up bonus.
3) I’m short on money. How can I cash out my AAdvantage/United/Delta miles?
You can’t. Well, unless you go against the terms of the program and sell it to a broker, which I do not recommend. Seriously, don’t. If you get busted, you’ll lose your entire stash of miles.
Anyway, miles and hotel points are not your emergency fund, so don’t get them for that purpose. They are meant to help you travel more affordably, not put food on your table.
Travel isn’t free, you will still have out-of-pocket expenses you need to take into account. If you are short on cash, forget miles/hotel points and focus on cash back bonuses for the time being. You may also look into flexible points and possibly Chase Southwest credit cards. You can redeem Rapid Rewards for Walmart gift cards as long as your card is open.
Saving money, not travel, should be your priority right now.
4) Are you sure this hobby won’t destroy my credit and I won’t end up living under a bridge?
This hobby (and bloggers, while we are at it) can’t do any of those things to you. But you can. If you have a spending problem, it would be best to forget you ever came across this information and no, I’m not kidding.
If, however, you are fairly disciplined and somewhat organized, check out my Beginner’s Guide Short version: I’ve been getting 4-6 new cards each year for the last 13 years, and my credit score is still excellent.
How much or how little you participate in this hobby is up to you. Just one credit card bonus can potentially offset the cost of airfare and hotel when it comes to family vacation. Don’t believe me? I’ll prove it. Take Chase Sapphire Preferred, the most underrated sign-up bonus in the hobby. I’m kidding, everyone and their pet knows about it. But if you don’t, read about it here (scroll to the bottom).
So, let’s say you sign up for it and get 60,000 Ultimate Rewards points once you complete your minimum spending. If you transfer 40,000 points to Southwest, you should be able to book 4 roundtrip tickets to Buffalo, a gateway to Niagara Falls. The cost of airfare varies, of course, but this price should be fairly accurate if you live in the Eastern part of the US.
You can then transfer remaining 20,000 UR points to Hyatt program 1:1 and book Hyatt Place Buffalo/Amherst for four nights. It’s a category 1, so it costs 5,000 points per night and comes with complimentary breakfast. Have four kids and a spouse? You will all fit in one room. There you go: one card=vacation. Retail value of this trip? At least $1,000.
5) I don’t understand. I have to spend $4,000 in order to get 55,000 UR points on Chase Sapphire Preferred, worth $550. How can paying $4,000 for $550 be a good deal?
I told you the last question will shock you! Nope, I’m not making it up. I’ve heard several of my husband’s relatives come up with this little gem. And no, they are very smart individuals.
At the risk of sounding like Captain Obvious, you are not paying anything. You are (hopefully) spending money you would otherwise spend anyway. Can’t easily put $4,000 on credit cards in 3 months? Find an offer with lower requirements. Alternatively, look into getting a good long-term card or two and call it a day.
And it’s a wrap! Readers, can you share some of the gems you’ve heard from friends and relatives?
P.S. Nancy and I will be out of town during the first half of next week, so posting will be light. I did schedule a trip report from my cousin-in-law on Monday. Hope you’ll enjoy it!
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