Transcription
You might be sitting on a gold mine of value with your credit card points and not even realize it. While most people settle for cash back and gift cards, I've used those same points to unlock far more value, saving tens of thousands of dollars on experiences like these and these. And by the end of this video, you'll know how to do the exact same, 'cause we'll break down the secrets to maximizing your points, uncover how much value you're leaving on the table, and walk through step-by-step my actual trips to help you get started.
Okay, so when redeeming points, whether for cashback, gift cards, or even using them on Amazon and PayPal, those methods are convenient but rarely give you great value, with some exceptions. But first, let's say you like gift cards. So you take a look at the $100 Best Buy gift card, which will charge you a whopping 4,826 American Express Membership Points. Dividing the value you're getting by the points needed gives you a value of 0.7 cents per point, a unit of measurement we'll keep referencing throughout the video to highlight just how much more value you'll get from redemptions later on. Spoiler: you're getting at least four to five times more value, and sometimes even more.
Okay, what about cash back or statement credit? Well, you want to avoid AMEX completely here, 'cause they give you a really sad rate of 0.6 cents per point. Chase, on the other hand, does give you 1 cent per point for cash back, which means 10,000 points will give you $100, and that's kind of decent. Keep in mind, though, that many of these cash back cards, like the Chase Freedom cards or the Citi Double Cash and Custom Cash, will actually earn you points instead, like Chase Ultimate Rewards points and Citi ThankYou Points, which you can then convert back to the cash back rewards. But that is actually a good thing, 'cause it gives you more options for better redemptions. We'll see later.
Now, what about redeeming points through these issuers' travel portal? Every major issuer has their own search engine where you can find flights, hotels, and car rentals and book through there with your apps. Typically, they'll give you about 1 cent per point, which is again, similar to the cashback. Then there's Amazon and PayPal, which might seem tempting, where you can get your order without spending any money. But unfortunately, like with Chase, they're only giving you a rate of 0.8 cents per point, so you'd much rather just go through regular cash back. Except, well, everything has exceptions, and there are a couple of reasons why these lower value redemptions might still be worth it. Sometimes Amazon targets people with significant discounts by spending some points during checkout. For example, right now I'm targeted for 40% off my order up to $40, and with Amazon's wide selection, this is an easy value unlock if you're targeted.
And with travel portals, the one exception here is with Chase. Having one of the Chase Sapphire cards, they'll give you a boost in value for your points, either a 25% boost or a 50% boost, depending on the card you have. That means instead of needing 100,000 points to redeem for a $1,000 flight, you're only going to need 80,000 or 67,000 points. A respectable discount, especially through an engine that's easy to use, just like another search portal. I would just double-check to make sure the prices are comparable to other sites. That said, the absolute best way to use these points is for travel. Well, not travel portals, but going through travel partners. This is where you can unlock some outsized value, like flying business class on tickets worth thousands of dollars for just 50 to 60,000 points. Sometimes, in terms of that cents per point value, you're getting upwards of 3 to 4 cents per point or more. And the best part is, you can do this with pretty much any major issuer: AMEX, Chase, Capital One (the three that I have the most points in), or others like Citi and even Bilt. Just know that some issuers will require you to have certain cards within their ecosystem to transfer points: AMEX cards, Bilt, Chase Freedom cards when paired with a Chase Sapphire card, Capital One Quicksilver and Savor cards when paired with a Venture card, the Citi Double Cash and Custom Cash cards paired with the Strata Premier. Overall, these travel partners is where the magic really begins.
So, what are travel partners? Overall, these are airlines and hotel chains that partner with these major issuers and then allow you to convert those points into the points on these loyalty programs. Once transferred, you can then redeem those points through that program for flights and hotels, not only for the single airline, for example, but also their network or alliance of partners as well, dramatically expanding your options and potential value. Take Aeroplan, for example. Chase, American Express, Capital One, and Bilt all transfer to Aeroplan at a favorable one:one rate. From there, you can book flights directly with Air Canada, but also the Star Alliance network, like ANA, Singapore Airlines, Asiana, EVA, and more. If we choose one specific example, let's say we want to fly from SF over to Singapore on the amazing Singapore Airlines. A one-way flight would cost you $3,659. That's taking the roundtrip price, dividing by two. Using Aeroplan points, that exact same flight would only cost you 87,500 points plus $56 in fees. Doing the math, that's getting you a value of 4.1 cents per point. That's over four times the value compared to regular cash back. And it's not just Aeroplan; the same applies for other issuers too. I just personally really like Aeroplan because of the amazing partners in their network, as well as the ease of earning their points, transferring from so many different issuers. Others may be more limited. Say you want to book within the ANA ecosystem? Well, the only transfer partner that's reasonable there is with American Express. On the other hand, if you want to book with Alaska points, then you either have to go through American Express, through Hawaiian, or the Bilt card. It really depends on which airlines you want to fly with and what networks they're available in, and then backtrack to see which issuers' points transfer into those programs in order to decide on which cards to focus on. With Aeroplan being one of my focuses, it's one of the big reasons why my setup centers around Chase, American Express, and Capital One.
That said, and here's a pro tip, there is another reason why it's great to diversify your points across so many different programs, and that's with transfer bonuses. You see, every month or so, different issuers will have bonuses when you're converting their points over to some of their travel partners. For instance, last month Chase had a whopping 40% bonus when transferring to Virgin Atlantic. This month, as of the time of this recording, there's a 20% bonus over to Aeroplan or Flying Blue, both programs I've personally booked through. That means last month you could have booked a business class ticket from JFK over to London Heathrow for 29,000 points and $250 in fees, a flight that would have costed you $1,558. Doing the math, that's a value of 4.51 cents per point, and that's before the bonus. With the 40% bonus, you only need 20,715 points, bringing the value up to a whopping 6.31 cents per point. That's over six times the value of regular cash back. And I know we've been talking a lot about business and upper class, but great value can be had flying economy too. Say you want to fly from LA to London. That flight could be booked for 9,000 points and $78 for a flight that would have cost $360 each way. That gives you a value of 3.13 cents per point. Factoring the bonus, that brings it down to 6,429 points and the value up to 4.39 cents per point. Both amazing redemptions, especially in economy. The key takeaway here: by understanding where you want to fly and what airlines fly those routes, you can backtrack to see which programs are best suited for you so you can find some sweet spots for some amazing value, four, five, six times or more the value of those basic redemption options.
That said, it's not as easy as just choosing your destinations, booking your flight, and packing your bags. I wish. There are some key steps you need to follow to properly and efficiently book these award flights, which I'll walk you through step-by-step using some of the trips I've actually taken over the last few years and a trip booked for early next year.
First, a pretty basic flight here in North America, both to show you the more basic steps, but also that you can still get great value without flying too far. This was a return flight from Montreal to Vancouver after a wedding. And so, because the plans were pretty set, I knew the exact cities and the exact dates that I wanted to fly on. Now, there are two main ways to do these searches. One is using the loyalty program's own website. This is kind of iffy because not all programs have great modern UI. Fortunately, Aeroplan does, and so at least with Aeroplan, you're able to bookmark a pretty simple search, which will show you about a week at a time in terms of availability. The other way, which is my preferred way, is using third-party sites like Seat.aero, which are much more powerful, letting you search multiple cities across a wider time range. Though these services aren't without some downsides. For example, in order to serve so much traffic, a lot of the results are cached, meaning they pull from popular routes every few hours and then serve those to you if your query is too heavy. So some of the results can be a bit outdated. They also don't have every single loyalty program out there, just mainly the popular ones. That said, it's still a great way to scan a lot of things at once and to start your search journey, and I'll have a link down below if you're interested. Not sponsored, but that's the exact same tool I used finding Air Canada business class seats flying from Montreal to Vancouver for just 24,000 points and $38. When compared to the cash price of $730, that's a value of about 2.88 cents per point, almost three times the value of those cashback redemptions for a 5 to 6-hour flight, and flying lie-flat, that's pretty worth it. And if this trip were happening right now with Chase's 20% bonus transferring over to Aeroplan, the points required gets lowered down to just 20,000 points, bumping up the value to 3.46 cents per point, which is great for these within North America flights.
So, what are the main steps I took here? First, know your cities and dates. Second, set up your searches, either through the program or with third-party sites. I like the latter. Third, through your credit card reward portal, go through transferring points and make sure your accounts are linked properly. First pro tip here: make sure your names actually match across your accounts, 'cause I've had friends who weren't able to transfer because of certain middle names or different given names. And fourth, if something matches, transfer your points, which sometimes can be instant, like with Aeroplan, or up to a couple days with other programs. Then book your flight and enjoy.
All right, but what about those even higher value redemptions? One of my favorite trips was one a couple years ago, going for 4 weeks to Asia, starting with Singapore. I used a different tool back then, AwardTool, which has been shut down ever since, but tools like Seat.aero are pretty much the same, if not much more powerful. So I did my search from YVR to Singapore across a pretty wide range of dates. Fortunately, I was able to find four business class seats flying Vancouver to Singapore through LAX for just 87,500 points at $56 per person. For some programs like Aeroplan, they actually publish these award charts, so you can see that flying Vancouver to Singapore falls into this distance bucket, which will cost you the given 87,500 points. The price of this ticket around the same time next year would cost you $3,800, giving us a value of $4.29 cents per point before any transfer bonuses. Tack on that with 20%, that bumps the value up to 5.13 cents per point. Now we're really talking.
But here's the best part: the trip didn't just end there. After Singapore, I wanted to show my parents around Japan and Korea, two countries they've never been to. And so I took advantage of something very special to Aeroplan, and that's the ability to tack on another flight, like a stopover, for just 5,000 more points. This allowed me to go to both of these countries on one ticket. The order really doesn't matter as much as long as there is award space, but I flew over from Singapore to Korea on Singapore Airlines business class, and then from Korea over to Japan on Ethiopian business class. The distance, according to that award chart, is 45,000 points, add on 5,000 points for the stopover, totaling 50,000 points. That kind of journey today would cost you about $1,500, which is approximately 3 cents per point, again, before any bonuses. And the steps I took to book this trip is pretty similar to the last. I knew which cities I wanted to visit, but in this case, having a wider date range, I set up searches and looked a couple minutes every day. I had my accounts already linked and had the number of points needed to transfer at a moment's notice, and I understood the details of the loyalty program, in this case, using their stopover rule.
And those exact same steps is what I did booking a future trip next year to Thailand, but flying to Taiwan first. This is actually a flight that has quite a bit of availability. This is showing just some available dates when searching on Seat.aero. But to fly from Vancouver to Taipei on China Airlines business class, that will cost you 67,500 Flying Blue miles and $110 in fees for a flight costing around $2,186. That gives us a value of 3.09 cents per point. But again, remember transfer bonuses, bringing the requirement down to just 56,250 miles and bumping the value to 3.71. And yes, I mentioned China Airlines with Flying Blue, because remember, it's not just about that single airline, in this case, Air France or KLM, but their broader network. With these airlines, they all belong to the SkyTeam Alliance. So that's a lot of information, but it's all to show you the vast possibilities and value you can get in this space. It's not a walk in the park, but for most people, it's well worth it to try out these incredible travel experiences without paying the ticket cost, and maybe not just for you, but your loved ones around you too.
So, if I were to break it all down for someone just getting started, here's what I would say: First, get your credit card habits in order. Pay your bill off in full and on time, every single time. Use cards responsibly and build a strong credit score. Second, start with flexible point cards. That's Chase Freedom cards with Chase Sapphire, Capital One Quicksilver and Savor cards with their Venture cards, Citi, American Express, and Bilt cards. Third, learn. Learn about where you want to travel to, what airports you want to connect through, and what airlines fly those routes. From there, you can backtrack to see which loyalty programs you should be looking out for, and therefore, also which issuers and which cards. From my experience flying to Asia a lot, I personally really like Aeroplan. Fourth, practice searching and using the tools, maybe with some random dummy dates. It takes some time to get used to, but you can boil it down to just checking for maybe one or two minutes a day. Fifth, from that, you should be able to know how many points you need, so make sure you have those points ready, and again, have your accounts linked. Sixth, look out for transfer bonuses, but don't transfer unless you have an immediate use for those points, 'cause you can't go back. The other win: Seventh, book your trip. I like to do so in different segments, like two one-ways instead of a round trip if the price is the same, because it allows you to make adjustments and changes more easily. And eighth, look out for unique tips that can save you even more money, like how for my Montreal return flight, I was supposed to fly on premium economy but swapped over to business class for pretty much the same number of points. That, and even more trips to really maximize your points and travel experiences, over in this video here, and I'll see you over there.