How Far Can Points and Miles Really Get You?
Well, friends, that's what I'm about to find out. You see, if I'm going to be able to continue to travel, it's going to have to be by different means that I previously did. Over the last nine months or so, I've been learning about how to acquire points and miles and then travel with them. I've dipped my toes into a few of my first point redemptions and been exceedingly blessed by them. I've enjoyed the benefits that come along with the cards I've gotten as well including: lounge access, travel insurance, and even free ice cream. Yes, you read that right, I have a credit card that gives me free ice cream every month. Now, because I am having to balance my blood sugar points as well as my credit card points, my husband has actually enjoyed the free ice cream, but he's definitely not complaining! But, beyond these things, how much actual travel can you do with points and miles?
Points (and miles, the terms are interchangeable and I'll just pick one to use going forward to simplify things) can be used to cover any form of travel. The limit is really how much value you want to get out of them. You see, with most, if not all cards, you can redeem your points for $0.01 each straight up. Just cash out your points and use them to pay for travel. So, you redeem 10,000 points and get $100 for travel. Now, you're not going to get as much value out of that strategy, but it is an option.
This gets improved slightly by those cards, and there are many of them, that allow you to "pay yourself back" for travel purchases. You see, with this option you buy the travel on the card, earning more points, then use your points to pay for the purchase. So, if you spent $100 on a travel expense and you card earns you 3x points for travel, you would earn 300 more miles. Then you would spend 10,000 points to erase that purchase, after the 300 gain that means you used 9,700 points. That gives you a redemption value of 1.031 cents per point (CPP). A little better than 1 CPP, but let's see if we can improve on that.
Chase's travel portal will allow you to pay with points at a redemption value of 1.25 CPP if you hold a Sapphire Preferred* card and 1.5 CPP if you hold a Sapphire Reserve*. This means your $100 purchase would now only cost you 8,000 points with the Preferred, or 6,666 points with the Reserve instead of 9,700 or 10,000. That's sounding more interesting, but can we do better?
Instead of booking through your bank's travel portal, some cards like the Chase Sapphire Preferred* I mentioned above, the Amex family* of travel cards and the Capital One Venture X* allow you to transfer points to other places. So, I could take those 10,000 points and transfer them to the World of Hyatt. What could I get there? Well, Hyatt uses an award chart where it sorts its different properties into tiers from 1-8 where tier 1 properties start at just 3,500 points per night in the off season and tier 8 properties start at 35,000. Let's say I was wanting to go to Saltillo, Mexico at the end of October and stay three nights over a weekend in a room with a King bed and a sofa bed at the Hyatt Place Saltillo, a tier 1 property. If I were to pay the cash price for that it would be $644.98. BUT, if I were to pay points for it, it would only be 10,500 points, just barely over the 10,000 points we've been looking at. That's a redemption rate of 6.14 CPP! More than quadrupled the 1.5 CPP of booking with the best card through the travel portal. Can it get better? Well, yes, it can.
If you earned those points on a Chase card*, they would need to be transferred to Hyatt before you could use them. Periodically, banks offer transfer bonuses to their transfer partners. You might be able to get as much as a 20% transfer bonus, making 10,000 points become 12,000. Now, the redemption above would only cost 8,750 Chase points (10,500 Hyatt points after the transfer bonus) giving you a redemption rate of 7.37 CPP. It would also allow you to stay three nights in a hotel that would have cost $644.98 for what you could have cashed out as $87.50 in points. Now that's not bad at all!
Not gonna lie, I cherry-picked this redemption by finding a more expensive tier 1 hotel, but the concept remains. Let's jump up to a more expensive tier 8 property, the Park Hyatt in New York. A two-night weekend stay here the first weekend in January 2026 would cost you $2,236.56. If you were to pay with points, it would cost 70,000 Hyatt points or 58,333 Chase points with a 20% transfer bonus. That's a redemption rate of 3.83 CPP, gnabbing you a more than $2,200 hotel stay for about $583 worth of points. A points card is going to get you way more prospective value than a cash back card EVERY TIME.
And this doesn't just work for hotels. Both Chase, Amex and Capital One have lots of airline transfer partners as well. Through their travel portals, they will let you reserve rental cars, and Chase and Amex will both let you spend points in their travel portal to book cruises. Your opportunities are limited only by your imagination!
How does one go about acquiring tens of thousands of points when you don't have tens of thousands of dollars to spend? I'll go over that in more detail in a future post, but the short version is, sign up bonuses. These banks offer you an incentive to sign up for their credit card in the form of a sign up bonus which numbers in the tens of thousands of points. Currently, you could earn 40,000 Amex Member Rewards points by signing up through my link*, 60,000 Chase Ultimate Reward points for signing up for either of the Sapphire cards through my link*, or 75,000 Capital One Points for signing up for a Venture X through my link*. Why sign up through my link? Well, because it helps me get a little closer to my travel goals and gets you a great deal at the same time. Each of the sign up bonuses will require a minimum spend on the card, you can't get something for nothing, but you do not have to spend above and beyond what you normally would. Use the card to pay your bills, pay for your groceries, buy those ridiculous shoes that your teenager is going to get anyways. You'd be surprised how quickly it adds up, and as you're spending, you're earning even more points! And remember NEVER CARRY A BALANCE! Even the best points strategies will have their redemption rates decimated by even one interest payment on a credit card. Its. Just. Not. Worth. It!
Here's the Thing: Just because I'm cutting back on my spending and re-evaluating my budget doesn't mean I'm not spending anything. What it means is that I want to get the best value out of every dollar I spend. And if continuing to sign up for credit cards will stretch my travel dollars, as well as every dollar I spend on electricity or gas or groceries, further, then I'm going to do it. Give me a hoop and just watch me jump through it!
* The links to credit cards in this post are my referral links. By using them, I receive bonus points and you get a really great offer! Here they are in case you missed them:
o Earn 60,000 bonus points with either Chase Sapphire® card. I can be rewarded if you apply here and are approved for the card.
· Amex
Comments
Post a Comment