Points and Miles Ground Rules
For those of you who are newer to the points and miles game, there are a few ground rules that are paramount to have success in this space. For those who are a bit more advanced, I still think we never graduate past these core principles, we just build upon them.
Ground Rule #1: Gone are the days when you’ll use cash or a debit card ever again.
Much of the advice that we give here at The Frugal and Free Travelers revolves around maximizing credit card rewards. If you have such a strong bias against using credit cards that you would never open one, you are welcome to keep following us, as we will present other ways to accumulate points/miles to use for travel, but I can assure you: you will likely never accumulate enough for aspirational awards. Please know this going into starting in this world and decide if you want to proceed further!
For most travel rewards credit cards, you will need a credit score of at least 700. (Don’t know your credit score? Check out Credit Karma.) If you don’t have that level of a score, spend time improving your credit score and then dive back into the points/miles world.
Caution: If you are paying down consumer debt, you should strongly consider paying those down before going all-in on points and miles.
Ground Rule #2: You must pay your credit card on time and in full each month.
Studies show that, in 2021, 66% of the U.S. population who possess credit cards didn’t pay their credit card balance off each month. It is with these individuals who the credit card companies make a large proportion of their profits through interest charges. If you have a history of not being able to pay off credit cards, are in substantial debt, or are nervous about being fiscally responsible with them, I can assure you: the money saved from earning points and miles WILL NOT make up for the burden of debt that will be added to your shoulders.
Ground Rule #3: Don’t spend more than if you were using a debit card or cash.
Again, any rewards will not make up for your increased consumption that you did not plan for or budget. This is where you need to have high self-awareness! If you have had a history of impulse buying, or “retail therapy”, and haven’t processed this with a licensed counselor and found a high degree of healing in this area, this might not be the “game” for you.
Ground Rule #4: Don’t ever redeem points for less than 1 cent per dollar
Ideally, you will never redeem points for less than 1.5 cent per dollar, but 1 cent per dollar is the bare minimum (hotel points, like Hilton and Marriott, are a bit different, as they are worth about 1/2 a cent a point). Let me give you an example. Check out this flight from Kansas City to Cancun, routing through Denver, both in cash (top) and miles (bottom).
Whether you transfer Chase Ultimate Rewards points to United MileagePlus, or you have a stash of MileagePlus miles already, by redeeming 24.4k miles for $479.10 (I’m using the $522 price, as that is the class of service that the award flight would be, subtracting the taxes and fees of $42.90 for the award flight), you are receiving 1.96 points per mile, which is great for a United MileagePlus mile!
Here’s how I got that number:
$522 (Cost of Economy seat) - $42.90 (Taxes and fees of award flight) = $479.10
$469.10/24,400 = 0.0196 (1.96 cents per mile)
It’s easy to lose yourself in the nuances of the points and miles world with things like: positioning flights, transferrable points currencies, fifth-freedom flights, open jaws and fare classes, all designated by a specific letter of the alphabet. However, none of those things are important if you don’t get these basics down first. Write these ground rules down, memorize them, internalize them and then get to earning and burning!
