Beginners Guide To Miles and Points: Types of Miles and Points
Beginners Guide To Miles & Points
There is a ton of vocabulary and jargon in the frequent flyer world, which can be quite intimidating. You’ll pick up more of the terms as you go along, but at the beginning it’s important to distinguish between a few different types of miles and points.
Airline Miles / Hotel Points
Flexible / Transferable Points
Airline Miles and Hotel Points
Most of us are familiar with at least the concept of airline miles and hotel points – those are essentially a rebate offered by a specific brand in exchange for loyalty to their company. Those companies set the earnings rates, redemption values, and all the other terms and conditions.
Not only are there airline miles to consider, but you likely have (or have heard of) rewards points with a bank or credit card as well. These typically come in two varieties: fixed-value and transferable.
As the name might suggest, fixed-value points can be redeemed towards a specific dollar amount of travel. The amounts vary by program, but you’ll typically receive 1¢-2¢ per point towards travel.
These include (but are certainly not limited to):
Citi ThankYou points
Bank of America Worldpoints
US Bank FlexPerks Rewards
Wells Fargo Rewards
Capital One No Hassle Rewards
Barclaycard Arrival Miles
Some programs require you to redeem through the bank portal, while others will issue a statement credit.
In general, however, you are redeeming fixed-value points for tickets that could otherwise be purchased with cash.
So if a given airline ticket was selling for $100, and you had a fixed-value currency that gave you 1¢ per point towards travel, you would need 10,000 points for that ticket.
That’s why these programs advertise as having “no blackout dates” or having the ability to “choose any airline” – your bank is essentially purchasing a retail airfare for you, in exchange for points you’ve accumulated with their program. Because these tickets are typically revenue fares, you will typically earn miles when you fly on a ticket procured with a fixed-value currency!
So why even bother with miles? Fixed-value points sound great!
Fixed-value points are fantastic if you want to travel on domestic economy tickets! Domestic tickets (especially in the US) can be surprisingly difficult to redeem airline miles for, so fixed-value currencies are a great alternative.
However, if you’re looking at traveling internationally, particularly in premium cabins, fixed-value points just won’t get you very far. An international business class ticket might require 100,000 airline miles, but since the retail price is likely upwards of $5000, you’d need over 500,000 Capital One points, for example. And that’s a cheap premium cabin ticket. Some first class tickets would cost as much as a new car if paying cash.
So what are the other options?
Flexible / Transferable Points
One of the major perks to bank points, as opposed to airline miles, is that as a consumer you’re a bit insulated from dramatic changes or unannounced devaluations from a particular airline. So for many people it makes sense to focus on a flexible points currency, with transferable rewards.
These programs typically allow you to transfer points directly to their airline or hotel partners. This gives you lots of options when it’s time to redeem your airline miles, as you have the opportunity to search for award availability across alliances prior to committing to a certain mileage currency.
The main flexible points currencies are American Express Membership Rewards, Chase Ultimate Rewards, and Starwood Preferred Guest Starpoints.
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