Your approach to travel awards

[RosieQ]

I try and get more than 2 cents per point value for any awards point that I'm using. Since I usually have the cash to buy the product if I need to I break it down mathematically.

1) Shop for your ticket on Google Flights, Kayak, Orbitz etc and get the cash price for the product you would purchase.

2) Check for availability on an awards partner (ie United) and then take the total price of the ticket in cash (see #1 above) divided by the (number of miles needed plus price in fees/0.02).

For example I want to fly from my small town in CA to Lisbon Portugal next year. Cash price for an economy ticket is $1346. United miles would cost 60k miles and $168 in fees. To check and see if it's worth it I would do 1346/(60,000+168/0.02) = 0.019. So about 1.9 cents per mile or more or less a wash. That's usually the case for domestic fares these days. Getting above 2.1 cents usually takes a business class award which I likely wouldn't have paid cash for anyways. I do consciously avoid using miles when they are down in the 1.5 or 1 cent per point range though.

I find that points are more valuable for getting to obscure locations with smaller flights that would have higher ticket prices but are still within a geographic zone that doesn't cost much in points. For example it's only 25k miles to get to Kodiak Island, Alaska which usually has substantially higher cash prices due to multiple connections on small regional flights. Easter Island. Palau.

I did the travel hacking all the time to travel during residency and had some great adventures but now I usually pay cash for economy tickets and then when I get a large enough stash redeem for a nice business class flight once in a while.

[SwanSong]

I use Alaska Miles and the BoA card, which I have settled on as being the right program for us.  They fly into our small airport, and they go the places we want to go and are flexible in redeeming miles, which, for instance, American Airlines simply is not.  For now, you can re-apply frequently for their rewards cards.  It only takes 35k miles to get a round trip to Hawaii, and their rewards card also offers a companion ticket annually, which is really nice.  For us, flights to Hawaii for a family of 4 involve the purchase of a single airline ticket and then $122 for a companion fees and tax.  Minimal work.  Good return.  Convenient.  Am I optimized?  No.  But it works for me.

[u500_insulin]

I do not look at the fact that reward miles might not be as good as cash back in terms of value. With MD burnout so high, it is nice to look forward to a vacation, and having travel miles forces you to do that. If you get cash back then you might use that money for coffee. It has been shown that experiences lead to more happiness and not "stuff"

 

Use the miles to enjoy your life, do not look at it purely from a mathematical perspective

 

 

[treesrock]

Vagabond MD wrote:

Thanks for all of the responses.

I do use a cash back card (Fidelity) for the majority of my regular credit card functions. The cash reward (2%) gets automatically credited to my Fidelity brokerage account on a monthly basis.

I use Ally credit card (2.2% cash back for gas and groceries) and the Chase Amazon (5% back toward future Amazon purchases).

I was using the Chase Freedom card for the rotating (but limited) 5% back categories, but keeping track of all of this has gotten out of hand and particularly annoying for my wife, who always seemed to be using the wrong card at the wrong time. I have left her with two cards, Ally (Gas and groceries, written in Sharpie on the card ) and Fidelity (everything else).

I have been using the Chase Sapphire Reserve card, primarily for travel and occasionally for dining, and have accumulated nearly 300,000 or so points. Based on what I am reading here, I will probably use the points to purchase two RT flights to London over spring break ($3000 value, based on current pricing) and should have some points left over for other stuff.

I also have Marriott points (over 300,000) which I have been saving/hoarding for a special vacation, but I might as well start spending those down, too, when the occasion arises.

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Vagabond I suggest you check prices on your flight using points on United and British Airways, might be a better deal, might not be.  But worth a look.

[hightower]

I take advantage of new card bonus offers like the Chase Sapphire rewards card I got earlier this year (I got the big 100k bonus points and it paid for a big chunk of our trip to Hawaii).  I always take the cash back option for that card if I use it because it pays 1.5%.  My wife is going to use a new sapphire card to pay for our house painting project this month.  We'll get $500 cash back for using it one time and then we'll never use it again.  So, I try to look for opportunities like that.

However, the majority of my credit card usage comes from our Delta Skymiles American Express.  Even though technically the card pays 1% in bonus points, we feel we get a lot in return for those points.  We've been bumped up to first class status several times.  We almost always get free upgrades to Delta Comfort.  We get 2 checked bags free each (so we usually walk on to the plane not carrying anything which I love). We have also flown many completely free flights by redeeming those points.  We use the card to book hotels and car rentals as well which often pay double or more in points. So, I feel it is a valuable program and that's why we keep using the card.  We fly a lot so we prefer a card that pays us flight benefits.

[Zaphod]

With chase reserve you can also transfer to AA and SW and some hotel partners as well. They are very simple to use, literally just a click of a single button that says pay in cash vs. points.

I dont worry too much about hacking per se, but will transfer to AA sometimes if I am using door to door regionals as they have a fixed points per travel system vs. a total cost elsewhere.

Just use the points, you probably have a lot of free travel ahead of you. I have been traveling extensively for non fun stuffs this year but luckily have been using points the whole time, it helps a lot.

As far as whats more valuable, obviously it is going to depend on what you value. Most travel cards are 1% on most things, 2-3% in select categories. However, what sets apart travel cards is the lucrative sign up bonuses. After that, cash back (if not points based) is far more versatile. Its just very easy to get a new card every year or so and get a big dose of free travel.

[StarTrekDoc]

@Vagabond - KIS and you're doing it right.  Cashback for the majority and specific Catergories for the Freedom card and the Amazon card.

Reserve card - if you don't travel much or spend $300 on 'travel' categories for the credit, then move back to the Preferred before the next year cycle. -- You can't cancel and bonus points back the Preferred because chase considers them both the same card bucket unfortunately, so just move back to it.  Remember to get the Global Entry for you and all the family (have to get Authorized User cards for each of them first on that account and then Global entry).  That will save bundles of time to London at customs.

As @treesrock mentioned, the power of Sapphire is ability to move to points and book on upgraded tickets or high value hotels -  we routinely use for 3-5% value for urban Hyatt, United upgraded seats, and Southwest coupled with the Companion Pass.  Does take a little effort, but quite easy to do.

The Marriott points is a good opportunity to double dip with Hotel+Airline Points LINK  Too bad they ended the companion pass triple benefit  Choose your preferred airline and it'll get you mostly there.  Couple that transfer with some additional Sapphire transfers to United you have definitely a special vacation memory on hand with a week Ritz, First Class United (or any of its partners -- even better), and Park Hyatt (via Chase points) to add a quick  Paris trip from London.

 

[Craigy]

Right now I use my USAA 2.5% cashback card for everything I can.  Zero annual fee.  If you are eligible, you should definitely look into it.

The miles are a PIA for me.  In my experience with both Southwest and Delta, sometimes using points on a flight is a good deal, and sometimes it's not.  Adds another layer of complexity that's not worth it for me.  After my bonus 50,000 mile offer or whatever, I usually cancel the card before they hit me with the annual fee (seems like all of these airline cards have pretty steep annual fees).  And I usually exchange the miles for things like amazon or restaurant gift cards.

Perhaps if I started flying a lot it would be worthwhile to maintain a card and save on baggage fees and whatnot, but personally I hate having annual fee cards that I rarely use.

[VagabondMD]

Thanks for all of the responses.

I do use a cash back card (Fidelity) for the majority of my regular credit card functions. The cash reward (2%) gets automatically credited to my Fidelity brokerage account on a monthly basis.

I use Ally credit card (2.2% cash back for gas and groceries) and the Chase Amazon (5% back toward future Amazon purchases).

I was using the Chase Freedom card for the rotating (but limited) 5% back categories, but keeping track of all of this has gotten out of hand and particularly annoying for my wife, who always seemed to be using the wrong card at the wrong time. I have left her with two cards, Ally (Gas and groceries, written in Sharpie on the card ) and Fidelity (everything else).

I have been using the Chase Sapphire Reserve card, primarily for travel and occasionally for dining, and have accumulated nearly 300,000 or so points. Based on what I am reading here, I will probably use the points to purchase two RT flights to London over spring break ($3000 value, based on current pricing) and should have some points left over for other stuff.

I also have Marriott points (over 300,000) which I have been saving/hoarding for a special vacation, but I might as well start spending those down, too, when the occasion arises.

[G]

I transfer all awards to my delta skymiles account.  Then use this for gift cards (less often, now that they are so devalued), upgrades, apply to new ticket (still get miles for travel), or award travel for family (no miles are earned).  Once, I used miles for a montblanc pen; not a good use economically (terrible conversion rate), but I love that pen and the fact that I "earned" it from traveling!

I tend to keep a balance of 1-200k miles;  I guess that could be considered part of my e-fund -- it would cover a ticket or two in a pinch with no money needed.

[treesrock]

Chase Reserve user here, was previously using a Chase Sapphire Preferred prior to the Reserve coming out.  I'm surprised to hear people using this card's points to book through the Chase portal, I've always found that the points are worth much more when transferring to Chase travel partners, particularly United and Southwest.

The point transfer one-to-one, and occur instantly, so if you see a flight that is cheap on the points you can immediately transfer the points and book.  Takes a little more work but you save WAY more money this way.  But then again, the Chase portal is super easy, plus you then have Chase travel support in case anything goes wrong.  But I personally transfer to the travel partners.  I've paid for numerous round trip flights with points alone using this method.

But to respond to the OP, based on your current use of points, I think you would be MUCH better off using a cash back card, since you don't seem motivated to "travel-hack".  It takes a lot of effort and unless you enjoy it, its not worth it and you might as well make things easy on yourself and mindlessly get cash back.

[Hatton]

I will admit that I have never understood how to travel hack and have just paid for flights because my timing was usually inflexible.  I also like to stay at the same hotel where a meeting is being held.  I use cash back credit cards.  They are simple to understand and use.  My husband accumulated some points from his business that were going to expire so I got a free purse and makeup travel bag.

[adventure]

Neuro-doc wrote:

Where ever possible, I have switched my credit cards etc. to cash-back rewards rather than travel points. The reward ratio may not be quite as favorable, but getting cash back is much more flexible, and can be used immediately.

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In every card I've checked out, I've found the reward ratio for cash back to always be better than points.

Vagabond MD wrote:

(Is this OP too long?)

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No.

I have small piles of miles on 10 airlines. However, they are constantly being devalued, and (even for work), I can't bring myself to always fly 1 airline, it's just too expensive. We use a cashback card, so our spending doesn't really generate points.

Miss Bonnie MD wrote:

free rt flight to Hawaii

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However, we went to a CME conference on miles this spring for the first time. I found I had just enough on one airline to get the ticket that was on sale. Woo! First time I'd used the miles for anything significant. I do use them to buy magazines, and send those as gifts to folks. Silly, but 200 miles buys a lots silly reading and coffee table clutter for folks.

[q-school]

i am too old to remember to do this, but when i see people get all these miles, i usually discover later that they had both spouses independently apply for a card so each would get the 50,000 mile sign up kicker.  don't forget to do that.

i too am sitting on approximately 600,000 points of airline miles across three different airlines.   ops:

 

[WallStreetPhysician]

There is a philosophy in the travel rewards space to "earn and burn". Airlines and credit card programs are always devaluing their points. Inflation in the world of miles and points is high, and you can't invest your miles in any sort of travel rewards stock market.

-WSP