Travel Rewards Points Simplified

The Guide

Airline miles are some of the most coveted credit-card rewards out there, but they’re also among the least understood. That’s simply because they’re hard to pin down. The value of the traditional reward mile is fickle, changing from one booking to the next and with each swipe of your credit card.

To get a handle on your miles and how to use them best, read on below, where we cover the basics on miles redemption. Who knows? You might be able to squeeze another summer vacation out of this.

Before we leap into the details, you should wrap your head around this concept: there are two types of miles out there, and they’re great for very different purposes (more on that below).

There’s 1) the traditional, airline-branded mile, whose value varies from booking to booking and from one day to the next. You’ll typically earn these on your airline-branded credit card. And then there’s 2) the more generalized, fixed-rate mile, which returns the same rate no matter the date. You also often have the option to redeem these for statement credit on your credit card bill.

Examples of the latter include Capital One’s No Hassle Miles, which are valued at a 1-to-1 ratio: 1-cent redemption for every mile you earn. That’s not an especially high rate – sometimes you can redeem for as many as 3 or 4 cents on each mile – but it’s a dependable one, and it can be clutch for certain types of travel.

When you book and where you go
The rule of thumb is this: during peak travel times, your miles won’t return as much as they would otherwise. It follows that holidays, when people travel the most, will give you the least flexibility with your points.

There are exceptions, but generally holidays aren’t a great time to redeem your miles – at least the traditional ones. This is the time when you’d use those fixed-rate miles, like those offered by Capital One. These are miles you’d earn on a more general travel credit card.

Other times it makes sense to book with your traditional miles, because you can redeem at crazy-high rates. You’ll usually find this is the case with international travel and on more expensive flights. There isn’t a clear breaking point in terms of price, or when miles are a good choice and when they’re not. But if a $100 ticket is asking for tens of thousands of miles, you should refrain from redeeming them, because a better deal will most certainly be around the corner for a pricier flight.

International travel won’t always be cheaper with miles, thanks to taxes and fees. Airlines will often charge you for miles redemption. And on international travel, those charges can be especially severe: as much as $1,000, and we’re not even talking about the cost of the ticket itself!

You can avoid those high taxes and fees, though, if your miles are versatile enough. Depending on the airline, you’ll have opportunities to transfer your miles to a partner, hopefully one that doesn’t gouge you for miles redemption.

Some carriers will give you more options for transfers from one airline to another. Delta is a notable winner in this arena: you can transfer to United, US Airways, American Airlines and others.

Got that? You’ve passed Miles 101. If you haven’t already picked up a credit card for rewards on travel, check out some of our favorites, namely the following:

• The Chase Sapphire Preferred: a 40,000-point signup bonus and 2 percent rewards on dining and travel – what’s not to love?

• The Capital One Venture cards: Two cards, one with an annual fee and one without. The former returns higher rewards – 2 points on every dollar you spend! – so the fee may be worth it to you.

• The British Airways card: The best signup bonus out there, with 50,000 Avios – that’s the British Airways-branded mile, redeemable on their flights as well as other carriers, like AA.

Travel Rewards Points Documentary

For the TD First Class Travel Visa Credit card

- You get 3 points for every $1 you spend

- Each point can be redeemed at $0.004 or 10 points are worth $0.048

- Thus, you have a “cash back” rate of 1.4%.

Example:

$123,000 spent giving you 369,000TD points

369,000 points = $1800 redeemable value (369000*0.0048)

$1800 / $123,000 = 1.46% ROI

 

Bonuses:

9TD points per $1 Travel spend, thus you get $0.036 as opposed to $0.012 per $1 spent

- ROI is 3.6% on Travel Expenses

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