N.B. This post was published recently for an international audience at triptipedia.com, you can see that version here. Some amendments have been made here to to give UK based examples.
If you’re looking to travel the world on a budget, then collecting points and miles can be a good way to reduce your costs. Surprisingly this can be true even if you’re not a frequent flyer or regular hotel guest.
Points and miles schemes effectively provide an opportunity to build up travel credit, sometimes with specific brands (e.g. Hilton Honors points) and sometimes with the potential to transfer across multiple partners (e.g. American Express reward points). You collect points/miles, on spending and/or travel bookings, and once you have enough, you can then exchange them for reward flights or hotel nights. However, there are a lot of different schemes, with different set ups, which can make it seem complicated, and depending how you redeem points their value can vary significantly.
Here are some quick beginners tips for earning and redeeming points to use for travel…
Tips for Earning Points
1) Find a good rewards card and earn points on your everyday spending.
This is my favourite way to earn points, because it doesn’t have to cost you anything more than your usual spending. With a reward credit card, you earn points for every £ spent and often a decent points bonus on top, for meeting a spend target. As long as this spend target is consistent with what you’d normally spend anyway, then you’ll get points for just putting your money through a different card. Schemes with current UK rewards cards include American Express Rewards, Avios, Starwood Preferred Guest, IHG and Nectar.
For me, the best reward credit cards are those which allow you the flexibility to transfer points to multiple partners. In the UK, the cards with the most flexible points are American Express membership cards – and that’s where I started my point collecting. With the exception of IHG, Amex points can be transferred to all of the schemes listed above. It’s also worth noting that you can earn bonuses on more than one card, and these bonuses can be quite attractive. So often people will apply for additional cards to earn one bonus after another – some caution should be applied in relation to the potential impact on credit ratings though. My advice would be to start with one card and aim to earn a flight or hotel stay and then learn about the points systems as you go.
A good example of a point earning card is the American Express Preferred Rewards Gold Credit Card, which you can read my post about here. With this card you can earn over 20,000 points on the first £2,000 you spend – which can be worth as much as £200 in flights or hotel stays.
It is also important to remember to pay your statement in full each month if you’re using a reward credit card – otherwise the interest you pay will likely outweigh the benefit of the rewards you earn.
What can you get with 20,000 American Express points?