The Value of Travel Rewards Programs and Credit Card Points

[JDARNELL]

For the last year I have been keeping track of how much I spend on travel using travel rewards programs and credit card points. While I have worked at this I am by no means 100% efficient in maximizing every point or promotion $.

Here were my travel parameters for the year

- All Domestic Flights on Southwest or United
- No budget hotels but rather what I would consider comfortable (Hilton, Marriott, or IHG properties)
- Rental cars Full size

Total Number of R/T tickets - 14.5
Total Number of Hotel Nights – 42
Total Number of Car Rental Days – 24

Total Cash Spent $4,861.00
Total Value of Travel $11,122.00
Savings 66.3%

NOTE: The value of retail travel is determined by the best discount I could get on flights, hotels, and rental cars as I shop for the best deal. It does not include the amount of time I did researching my options. Also all trips were trips that I would have taken anyway.

Not too shabby!
JDARNELL

 

[ProspectiveBum]

I enjoy travel, but with 2 school-age kids, it's pricey to fly anywhere. DW is talking about taking an Alaskan cruise in the next year or two, which won't be cheap, either.

I've just recently started trying to rack up points to help pay for some of these adventures. I'd love to hear more details on how you got so much "free" travel.

 

[JDARNELL]

I enjoy travel, but with 2 school-age kids, it's pricey to fly anywhere. DW is talking about taking an Alaskan cruise in the next year or two, which won't be cheap, either.

I've just recently started trying to rack up points to help pay for some of these adventures. I'd love to hear more details on how you got so much "free" travel.

Not free but great reduced by taking advantage of hotel reward programs, bonus offers from credit cards, etc. Check out some of the "Travel Hack" blogs. These guys have it down and use their points for luxurious travel. Since I still have School Age kids mine is more simple.

 

[whatnot]

I use Southwest for domestic & United for Int'l. Just signed up for the Marriott card so have a lot of points I can use. It really does ease the travel budget.

 

[Danmar]

Just booked 4 business class tickets back from Paris to Toronto on points. Would have cost at least $20k. Probably a normal yearly savings for us.

 

[euro]

Just booked 4 business class tickets back from Paris to Toronto on points. Would have cost at least $20k. Probably a normal yearly savings for us.

That's very impressive Danmar!

 

[daylatedollarshort]

Not too shabby!
JDARNELL

Great job. We've just started learning how to play the credit card games and the possibilities are very intriguing.

 

[JDARNELL]

I use Southwest for domestic & United for Int'l. Just signed up for the Marriott card so have a lot of points I can use. It really does ease the travel budget.

The southwest travel companion is a good deal. My wife and I rotate getting the cards every two years so we have that as an option. Of the 14.5 RT tickets only 3 were travel companion.

I too have the Marriott card and the free night covers more than the annual fee. I used mine last year on a $275 room. I was jammed on a travel visit and it saved me. The IHG card is pretty good.

I prefer the credit card reward points instead of specific program credit cards because of the ease of transferring them if needed and the extra value gained by booking thru their system. Much more flexibility. From what I can tell there are 3 main banks that issues cards to support their own points program. I only use one of them.

Also check out the MS threads.

 

[Chuckanut]

People are really talking about the new Chase card with 100,000 miles just for getting the card, and a $300 travel credit each year. But, the fee is $450 a year and is not waved for the first year.

 

[Chuckanut]

If you live in the Greater Seattle area you can get a free coffee and doughnut from Top Pot during the month of October if you have the Delta Amex card. It helps to defray the yearly fee. And the doughnuts aren't bad.

Terms & Conditions
*Card Member and a guest may enjoy one complimentary doughnut and 12-ounce coffee beverage each from any Top Pot location in the Seattle area. Limit one (1) per Card Member and guest per day. Offer based on first come, first served while supplies last. Delta and American Express reserve the right to cancel the offer in their sole discretion and without prior customer notice due to any unforeseen circumstance.

This offer is non-transferable and good only for use by Delta SkyMiles Credit Card Members and his/her guest from October 1 through October 31, 2016. Offer valid at any Top Pot location in the Seattle area. Limit one (1) guest per Card Member. Guest must be present with the Card Member at time of redemption. Delta SkyMiles Credit Card must be presented to service representative upon ordering.

 

[JDARNELL]

People are really talking about the new Chase card with 100,000 miles just for getting the card, and a $300 travel credit each year. But, the fee is $450 a year and is not waved for the first year.

True. The card will actually give you $600 in travel credit the first calendar year. I just got my $300 for CY16. The 100K in points is a good deal. For my simple calculation I am viewing the cost of each point at .0045 cents per mile. my typical cost per mile is .007 cents. I anticipate that I will get over $2300 of benefit out of the points alone.

 

[Sunset]

People are really talking about the new Chase card with 100,000 miles just for getting the card, and a $300 travel credit each year. But, the fee is $450 a year and is not waved for the first year.

I felt that $450 fee was a bit steep, since I had no firm plans to use the points, so I went with the Chase card that gives 50K points , and no fee for the first year. Just completed my $4K spending in 3 months

 

[ExFlyBoy5]

People are really talking about the new Chase card with 100,000 miles just for getting the card, and a $300 travel credit each year. But, the fee is $450 a year and is not waved for the first year.

I got this card and think it's pretty sweet. Sure, it's $450, but the 100,000 points are actually worth 150,000 ($1,500) if you redeem for travel on the Ultimate Rewards page..which has lots and lots of stuff on there. There hasn't been a location or an airline or a hotel that I have searched for and isn't on there and they do tend to have some good sales at times. Also, if you get the card NOW you can get the $300 travel credit this year (has to post by the close of the Dec statement) and then get it again come January, then cancel the card before it renews. So...$600 in credits, $1,500 towards travel on UR's page and also *unlimited* guests at Priority Lounges and they will reimburse for Global Entry.

Long story short, my $450 has gotten me $1650 of free money.

 

[JDARNELL]

I got this card and think it's pretty sweet. Sure, it's $450, but the 100,000 points are actually worth 150,000 ($1,500) if you redeem for travel on the Ultimate Rewards page..which has lots and lots of stuff on there. There hasn't been a location or an airline or a hotel that I have searched for and isn't on there and they do tend to have some good sales at times. Also, if you get the card NOW you can get the $300 travel credit this year (has to post by the close of the Dec statement) and then get it again come January, then cancel the card before it renews. So...$600 in credits, $1,500 towards travel on UR's page and also *unlimited* guests at Priority Lounges and they will reimburse for Global Entry.

Long story short, my $450 has gotten me $1650 of free money.

Keep in mind you can do better than that in some places. For example you can transfer 5,000 points to Hyatt which cost you (5000 *.0045) $22.50 and get a room that would normally cost you $150. I just did this for three nights in Mesa AZ and it saved me a lot.

I do book thru the UR site if the deal is better that way vs transferring to a travel partner. I find that car rentals are especially good thru UR even on deep discounted weekends plus you pay non of the taxes and airport fees.

 

[Another Reader]

Keep in mind you can do better than that in some places. For example you can transfer 5,000 points to Hyatt which cost you (5000 *.0045) $22.50 and get a room that would normally cost you $150. I just did this for three nights in Mesa AZ and it saved me a lot.

I do book thru the UR site if the deal is better that way vs transferring to a travel partner. I find that car rentals are especially good thru UR even on deep discounted weekends plus you pay non of the taxes and airport fees.

Are you sure you can avoid all the add-on taxes and fees? When shopping for a rental car in Phoenix recently, the price at the UR site was similar to the rental agencies' sites. Although taxes and fees are not charged by the UR partner, the small print says you may be charged taxes and fees by the rental agency.

 

[ExFlyBoy5]

Are you sure you can avoid all the add-on taxes and fees? When shopping for a rental car in Phoenix recently, the price at the UR site was similar to the rental agencies' sites. Although taxes and fees are not charged by the UR partner, the small print says you may be charged taxes and fees by the rental agency.

This is apples and oranges. I don't think there is much of a way to skip out of fees and taxes. BUT...I booked a resort for next May through the UR website and the points DID cover the fees that were tacked on.

 

[Lsbcal]

Are you sure you can avoid all the add-on taxes and fees? When shopping for a rental car in Phoenix recently, the price at the UR site was similar to the rental agencies' sites. Although taxes and fees are not charged by the UR partner, the small print says you may be charged taxes and fees by the rental agency.

Do you have to pay the rental car costs up front? That is what happened to us for a Dollar rental in Hawaii through UR. I wondered what would happen if we didn't like the rental car they had for us (although the car worked out fine).

 

[JDARNELL]

Just looked and no tax on my rental for next week. Rate quoted was the same rate as on car rentals.com before the tax. When I get a car the balance at the counter is always 0 and they say that everything is taken care of. As for not liking the cars with full size I get a pretty good selection to include Dodge Chargers.

 

[Katiek]

I've got a bunch of Ultimate Rewards points that I've never used. Question for those people who have used them to book airfare - can you purchase some of the airline extras (like "coach comfort seats") if you book through UR? I usually like to book travel directly with the provider to avoid complications if there are any problems with the reservations or travel delays but I compared a few ticket prices for trips I'm planning and UR seemed to have better rates.

 

[Souschef]

BA VISA card

We have been using the heck out of this card. Our last 3 International flights have been in Business Class. If I spend more than a certain amount, I get a free companion ticket. That reduces the miles required to almost a coach ticket each.
The other benefit is the ability to use the lounges, where we would arrive early and relax before our flight.

 

[flyingaway]

I just want to voice a slightly different opinion. Unless you really like to travel, the credit card reward business could actually push you to spend more money in order to meet the spending requirements, and to spend the reward miles which will have other expenses associated. I would seriously doubt that would help early savers and low income earners to reach their FIRE goals.

 

[daylatedollarshort]

I just want to voice a slightly different opinion. Unless you really like to travel, the credit card reward business could actually push you to spend more money in order to meet the spending requirements, and to spend the reward miles which will have other expenses associated. I would seriously doubt that would help early savers and low income earners to reach their FIRE goals.

That is why there are so many blogs and forums devoted to manufactured spending. Also, you do not have to use the points for travel. Last year we used some for travel but mainly got statements credits or Home Depot gift cards. I'm still in the novice category and don't do manufactured spending but I think last year our family total was over $2K in sign up bonuses alone plus 1 - 2% back on all our purchases for very little work, and our credit scores went up. Another plus is the income is generally not taxable.

 

[brett]

We are early savers, early retirees, and frequent travelers.

We have used airline points (I earned many from business travel), credit card points, and hotel rewards extensively. The programs have not encouraged us to spend on items that we otherwise would not have. It has changed how we pay. Always by credit card-we want the points or the rebate whatever the case may be.

We have traveled to many countries/continents on reward travel. In early Jan we head to South America and Central America thanks to reward travel. Same for hotel and credit card card.

 

[Chuckanut]

I just want to voice a slightly different opinion. Unless you really like to travel, the credit card reward business could actually push you to spend more money in order to meet the spending requirements, and to spend the reward miles which will have other expenses associated. I would seriously doubt that would help early savers and low income earners to reach their FIRE goals.

The writer makes a good point. If you find yourself spending more just to earn points, that defeats the purpose of the reward plans (from your point of view, not the banks and retailers). But, if you spend a lot using credit cards and can get the benefits, why not?

 

[ExFlyBoy5]

I just want to voice a slightly different opinion. Unless you really like to travel, the credit card reward business could actually push you to spend more money in order to meet the spending requirements, and to spend the reward miles which will have other expenses associated. I would seriously doubt that would help early savers and low income earners to reach their FIRE goals.

It *could* do that, but [-]many[/-] most of the folks here are a little too savvy to be picked alive by the CC companies. I have used CCs extensively to get all the rewards I can get...and I don't spend "extra" to get the rewards. As an example...the Chase card I discussed had a $4,000 spend in 90 days provision. Under normal circumstances, there would be no "regular" way to spend that amount. Ah...but "lucky" me, I was able to put my property taxes on the card and that wiped out about $2,500 of the minimum spending amount.

Also, the CC rewards may not have "helped early savers to reach their FIRE goals" but I sure take advantage of free money!