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Our Beginner's Guide

Updated: Apr 29, 2020

Travel points can be really confusing when you sit down and try to decide how to get started. If you’ve decided that traveling for a fraction of the cost, or even free, is something you want to do, start here with this article and learn the basics of the ins and outs of the points game!

1. What are Travel Points: Travel points consist of three types of points; hotel, airline, and bank points. Hotel and airlines points (often called “miles” for airlines) are used to redeem free or discounted stays and flights. Bank points can be used to book any kind of travel; hotels, flights, rental cars, and even cruises. Bank points can also be transferred to partner airlines and hotels. This ability to transfer these points opens up a world of possibilities. If you’d like to learn more about travel points, click here.

It's important to remember that not putting all of your expenses on a travel card is throwing away free travel.

2. Earning Points: Points can be earned three ways. Stays, flights, and spending on credit cards. The best way to earn these points is through daily spend on credit cards and the card’s signup bonus. No matter what card you get, the important thing to remember is that if you use your debit card or pay with cash, you are throwing away points aka free travel!

a. Signup bonuses are the easiest way to get a lot of points fast. They are a set amount of points that you will earn if you spend a certain amount of money in a defined amount of time. Such as 60,000 points if you spend $4000 in the first 3 months of having the card. $4,000 may seem lot of money, but if you plan ahead and get your new cards around the time that you know you’ll be making big purchases. For college students, that time is the beginning of each semester. Tuition and books are large expenses and instead of paying for them with checks or debit cards, you can put them on a credit cards to help you reach your signup bonus. Other great spots to help hit your spending goal are insurance, and utility bills. The point here is to spend the money you were already going to spend, not to spend recklessly just to earn the points. This means you need to be careful to track your spending and spend responsibly. If you don’t, you could really hurt your credit and future ability to get loans. While that sounds scary, credit cards can really work to your advantage if you use them carefully. If you’re worried about keeping on top of things with your credit cards, go check out Staying Out of Trouble with Credit Cards.

b. The most consistent way to earn points is to put everything you can on your travel credit card instead of a debit card or paying with cash. Even with your everyday spending, you can earn 1-5 points per dollar, which adds up quickly! Not putting your expenses on a travel card is throwing away free travel. The most important thing to keep in mind here if you have more than one card, is that some cards give extra points in specific categories. For example, the Chase Freedom Unlimited gives you 1.5x points on everything and the Chase Sapphire Preferred gives you 2x points on travel related purchases and restaurants. If you really want to get in to the points game, you will have to have more than one card, and you’ll need to learn what cards to use on what!

c. Lastly, points can be earned the traditional way of paying for stays or flights. This will earn you points/miles at the hotel chain, or airline. When paying for stays or flights, always use a travel card to earn additional points. This allows you to essentially “double dip”. You earn points for your purchase (ex. 100 points for $100), and you also earn points for putting that purchase on your card (here you would get another 100 points for the same $100). Here is another situation where using the right card can also get you more points; if you use certain brand’s card to purchase something from them, you can sometimes get 3 or 4 times the points. For example, you earn 5x points per dollar spent at Hyatt properties. Using the World of Hyatt card you earn an additional 4x points per dollar at Hyatt properties, or the Chase Sapphire Preferred earns 2x Ultimate Reward points per dollar at any hotel. So, a $100 one-night stay would earn you 900 Hyatt points, or 500 Hyatt points and 200 Ultimate Reward points! If you have more than one card, it is important that you use the card earns you most points/value. Depending on the scenario that could be a co-branded card (Hyatt, Hilton, Delta, Southwest) or a bank card (Chase Ultimate Rewards, American Express, Citi)

3. Different Points, Different Values? Not all points are created equal. Each points/loyalty program determines the value of their points and how they can be used. Understanding this is key to knowing what programs to target first. For example, Hotel A may offer you 100,000 points signup bonus, and Hotel B offers 50,000. Now a free night at a 5-star property at Hotel A will cost you 90,000 points. At Hotel B a free night at a 5-star property cost 30,000 points. Hotel B has the better bang for your buck, even though the signup bonus was half the size! This is where transferring points becomes important and can earn you more value. If 20,000 points in Program A is equivalent to $200 but it’s equivalent to $400 in Program B, it is better to transfer your 20,000 points to Program B and pay out of pocket for a flight or stay at Program A because it isn’t as great of a value for your points. However, you should always check the value of your points when you’re deciding whether to pay out of pocket or not because sometimes programs will randomly have a great deal with points (kinda like if a ticket or room were to go on sale, except the sale only applies to points… the ticket is still the same cost if you pay out of pocket!)

4. Time to get Started! The best program to start with is Chase Ultimate Rewards (UR). Chase’s Ultimate Rewards program provides great value per point, strong transfer partners, fantastic signup bonuses and points earned on daily spending. Another important reason to start with Chase UR is they have the 5/24 rule. This basically means that even if your credit is perfect, they will not approve you for a card if you have had 5 cards (Chase or otherwise) in the last 24 months. If you start with Chase cards, you will keep from wasting one of your five spots on a less valuable card. (Plus you can still get those other cards later!) Chase Ultimate Rewards is currently the highest valued points program on face value and also has some of the best transfer partners to increase your redemption value. Hyatt and Southwest are two of our favorite transfer partners. The Chase Ultimate Rewards program has four personal cards (Sapphire Preferred, Sapphire Reserve, Freedom, and Freedom Unlimited) and three Business Cards (Ink Preferred, Ink Cash, and Ink Unlimited)

The point here is to spend the money you were already going to spend and earn points on that, not to spend recklessly just to earn the points.

Once you understand the basics of how travel points can benefit you, you need to pick your first card. I would highly recommend that you start with the Chase Sapphire Preferred. Right now you get 60,000 points for the signup bonus instead of 50,000, and while it does have an annual fee, it’s one of the lowest at $95. As mentioned before, Chase has one of the strongest programs, so that 60,000 in points is valued at $1,200 for your future trips! It also earns 2 points per dollar on all dining and travel expenses, so you continue earning for future trips every time you travel! If you want to see all of the details about the Chase Sapphire Preferred, click here. As a travel card, it provides a lot of different types of travel insurances, and many other benefits that will help you earn points for trips and protect you while you’re on them!

If you’d like to get started now, you can apply for the Sapphire Preferred here!

Disclaimer: This article contains referral links from which chasingAnna may benefit. These links take you to Chase Bank’s secure application, and chasingAnna does not store or receive any of your personal information from this process.

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