It portrays a life spent floating in first class suites in the sky, free gourmet food and drinks galore, and unlimited hotel upgrades to fancy hotel rooms complete with turn down service and a chocolate on your pillow every night - all practically free - *sigh*...
The truth is, achieving all of that is a lot of work and requires jumping through all kinds of hoops. Many beginners get put off by the crazy language barrier (hello acronyms!), the insane points strategies, and the attention to detail it takes to pull it all off.
The upside is you CAN start small and work your way up.
This guide will ease you into the points and miles game. You'll learn to earn miles faster and redeem them smarter so you can jet off on your next vacation much sooner than you ever thought possible.
Points Program Basics
There are a few things every serious points collector should know to make sure their points are safe and that they aren’t wasting their valuable time and money frivolously trying to earn points.
1) Get A Handle On Points Math
Knowing some basic points math will go a really long way to help you make smart decisions when it comes to points. Yes - using the calculator on your phone is fair game. Here’s the skinny:
Know how much points are worth
Calculating how much a single point is worth is easy. You simply take the true value of whatever reward you will be redeeming your points for in dollars, and divide it by the total number of points required to redeem for that reward. Like so:
Dollar Value of Reward ÷ Points To Get Reward = Value of 1 Point or Mile
The number of points required should be obvious, and the value of most rewards can usually be found online in a couple of minutes. Let’s use AIR MILES cash as an example. You can get a $10 cash discount at participating AIR MILES merchants for 95 miles.
$10 ÷ 95 = $0.105 = 10.5 cents per mile (CPM)
Check out my article on the value of an Aeroplan mile for a detailed example on how to do these sorts of calculations.
Know the value of bonus offers
Bonus offers are one of the quickest ways to collect miles. But, any bonus you are considering need to give you enough value to outweigh any extra money you might be paying to get it. Products with a points bonus can often be found cheaper at a different store.
To calculate your value, all you do is take your CPM number above and multiply by the number of points or miles you will be earning:
Bonus Points Earned x Value of 1 Point or Mile = Dollar Value of Bonus
Continuing our AIR MILES example, if you saw a product bonus for 50 AIR MILES at Sobeys, this is how you would do it:
50 Bonus Miles x 10.5 CPM = 525 cents = $5.25
That means you are basically saving $5.25 on your purchase so if the product is only a buck or two more expensive at Sobeys than a neighbouring store, you are still coming out ahead.
Calculate your return on spending
Now that you know how much a point is worth, you can figure out how much value you get back in rewards on the money you spend. This is called return on spending:
CPM ÷ Spending to Earn 1 Mile = Return on Spending
With AIR MILES, it is typical to earn 1 mile for every $20 spent, but it depends on the partner you are shopping at or what credit card you are using. Here’s the math:
10.5CPM ÷ $20 = 0.00525 = 0.525%
That means you get half a percent back in rewards for the money you spend. So, if you spent $100, you’d earn 50 cents in rewards.
2) Watch Your Shopping Habits
Changing your shopping habits for points is OK - but only if you’ve done the math above to prove you are coming out quite far ahead by chasing rewards.
Be vigilant against letting shiny rewards entice you to spend more money than you really should on stuff you don’t really need.
3) Use Them Or Lose Them
Points aren’t like cash, they slowly (or quickly) lose their value over time. Reward program issuers regularly review their programs and adjust them - usually making them less valuable to consumers over time.
Don’t hoard your points hoping to redeem them for a dream vacation years later. Make sure you earn and redeem them fast enough to get the reward you want quickly. Anything more than two or three years is asking for trouble.
4) Stop Points From Expiring
If you are going to put effort into collecting points, you need to make sure you don’t lose them!
Most programs have expiry policies that kick in either due to a period of inactivity on your account or an overall hard expiry date for each point you earn. Having one small transaction on all of your accounts every 12 months should ensure none of your accounts are penalized for inactivity.
Check the expiry rules on each of your programs just to be safe. One to watch out for is the 5 year expiry rule for AIR MILES that is coming into full effect at the start of 2017.
5) Track Your Points & Passwords With Ease
Once you have more than one or two rewards programs to keep track of, managing them becomes time consuming and complicated...
More passwords to track, balances to check, bonuses to track, and points that all expire on different dates.
You can make all of that so much easier by the use of two free services:
AwardWallet let’s you monitor all your points accounts balances, status, and expiry dates all in one spot. You simply press one button and all your balances are updated in real time. All major programs are supported.
You’ll also get weekly status updates by email letting you know the change in your balances along with expiry notifications if your points are about to expire.
There is even an auto login feature that will allow you to jump right into your accounts without having to re-enter your password from the Award Wallet dashboard. This works for some, but not all, points programs.
LastPass is the solution to your password nightmare. Simply install an easy plugin in your web browser and now you only ever have one password to remember.
Any website you visit where you’ve had LastPass encrypt and save the password will automatically have the username and password fields filled in so you can log in with a single button click.
Not only does this let you log into your rewards accounts with ease, but you can use it for ANY online account. Personally, I don’t use it for highly secure accounts like banking and investing just to be safe, but all other accounts are fine with me.
It even allows you to share your accounts with other people WITHOUT giving them your password. You can grant access to any other LastPass user by entering their email address. This is great if you want to pool points under one family member’s account but still give everyone easy access.
The Top 3 Travel Rewards Programs For Canadians
The key to not getting overwhelmed is learning a couple of points programs at a time and starting with the ones most accessible to you. In Canada, we do have limited choice when it comes to travel focused programs.
Here’s where you should start:
People love to hate Aeroplan for high taxes and fees, limited availability, and a slew of other reasons - but the fact remains that it is an incredibly valuable rewards program when used correctly.
I have demonstrated that Aeroplan miles are worth at least 3 cents per mile, even when use for pretty typical economy class flights. That means if you are earning 1-2 miles per dollar spent you are getting a 3-6% return on spending. If you focus on maximizing your rewards, you can eclipse a 10% return on spending in some cases.
The reason Aeroplan is the top program you should get started with is a combination of high value and ease of earning and redemption in Canada. Nearly everything you need to know to conquer Aeroplan can be found in my 3-page guide to Aeroplan here.
Normally focusing on a rewards program offered by a financial institution is a bad idea because there is limited opportunities to earn points. American Express Membership Rewards is the exception. Here’s why:
- Their points are incredibly valuable and flexible. They and can be redeemed for any travel purchase from any travel provider and now even for statement credits for everyday purchases.
- You can transfer to both Aeroplan and Avios 1 to 1 which increases the value of your points by 300%. Plenty of other valuable transfer partners are available, like Starwood Preferred Guest, but at slightly reduced rates.
- They offer multiple Canadian credit cards with huge sign up bonuses and low minimum income requirements. For example, the American Express Gold Rewards card that gives 25,000 bonus points and a waived annual fee in the first year.
- You can earn points fast with Amex Gold Rewards because you get double points on gas, grocery, drugstore, and travel purchases.
- Earn more bonus points by referring friends and family members to the same credit card.
Why? Because their points are so valuable, there have multiple Canadian credit cards with huge sign-up bonuses available and low minimum income requirements, and they are extremely flexible to redeem.
3) AIR MILES
AIR MILES is more of a retail rewards program like Shoppers Optimum than it is a travel rewards program. You earn and redeem miles primarily at participating stores and the program is not associated with an airline in any way.
That said, AIR MILES, is everywhere giving you lots of opportunity to accumulate them. Unfortunately, they have a terrible return on spending value. Our math above showed it is roughly 0.5%. You can double that to 1% with the top AIR MILES credit card. When compared to Aeroplan’s minimum 3%, it isn’t great.
The new 5 year expiry rule is another reason to be careful...
But, if you can get past all of that, focus on big bonus opportunities for earning them, and find a flight route with decent availability and value - you can still do well.
Earning Points - Rules Of Thumb
To succeed in the points game you have to focus your energy on earning points the right way. Don’t waste your time chasing one point here and another point there - look for serious opportunities that will pad your points balances fast.
1) Focus On Big Bonuses
This is your guiding light when it comes to earning points - always look for the big bonuses. If you can snag a 25,000 Aeroplan bonus for example, using our points math from above you can see that’s an instant $750 value.
2) Let Others Find Your Points For You
Tracking down points is hard - especially big bonus points and promotions. That’s why you need to enlist the online community to help you out.
There are plenty of resources out there, but to date I haven’t found a more consistent and reliable source of bonus offers for Canadians than Rewards Canada. It’s always up to date and new offers are being added all the time.
These pages in particular I find to be valuable:
(Advanced) If you are willing to invest more time, forums are also very valuable:
3) Maximize Targeted Offers
Technology has advanced so companies can target individual consumers with special bonus offers - there is a big shift in this direction. To make sure you get all the best offers, you need to make sure you signed up for email offers from all your favourite points programs.
I know what you’re thinking - I can’t handle any more spam in my inbox! It’s true, you will have to put up with some useless emails, but the key is filtering those emails out of your inbox into a folder so you can review them when you want.
Gmail has a “promotions” tab built in now that dumps anything promotional in nature in one spot. I prefer to turn that off and tell Gmail what is a promotion case-by-case. You only need to use the last part of the email address after the @ to make sure everything from that company/brand gets filtered. Here’s how:
4) Choose The Right Credit Cards For Everyday Spending
Earning through everyday spending on your credit card is by far the easiest way to earn points and miles.
First, funnel ALL your purchases through your credit card no matter how big or small. Next, contact all the companies that bill you monthly, and see if you can get them to charge your credit card instead of debiting your bank account. Some will say no, but some will say yes.
Always pay your balance in full every month - NO exceptions - otherwise your rewards might as well be worthless.
5) Apply For A Few Credit Cards Per Year
You’re going to want to apply for a few credit cards a year to get those massive 20,000+ point sign up bonuses. Don’t go overboard though because you need to protect your credit score (find out how).
Try to apply for cards in clusters at the same time and wait until there are increased sign up bonus promotions with waived annual fees. I track sign up bonuses in real dollar values for travel credit cards here - updated monthly.
6) Use Shopping Portals When Shopping Online
Shopping portals and cash back websites help you earn extra rewards on top of other bonuses and credit card earnings when making everyday purchases online.
Another great tactic is to wait until these portals have special bonuses during peak shopping times.
AirMileShops used to be famous for offering 25 to 100 mile bonuses for making a single $20 purchase a few times a year. I think they’ve mostly stopped doing that, but right now they are offering a 5x bonus at quite a few stores.
7) Boost Your Points When Flying
Flying is a great way to earn miles if you aren’t too busy redeeming them. Use points math to figure out if paying a little bit more for a flexible ticket that gives you additional miles. For example, Air Canada only gives you 25% the normal Aeroplan miles if you book the cheapest fares.
Save your miles for shorter expensive flights and trying to pay for - and earn miles on - longer inexpensive flights. Reason: miles are usually awarded based on distance traveled, not ticket cost.
Finally, before you depart on any trip, check the Rewards Canada pages linked above to see if the airline you are flying and hotel you are staying at is having any bonuses you need to register for. I’ve earned thousands of extra miles by doing this one simple check and registering.
8) Get Status If You Can
Chasing status is only for elite travel hackers - but getting a little bit of status can boost the miles you earn. Both Aeroplan and AIR MILES have their own types of status that can help you earn more miles or get discounted rewards.
These are different than true airline status (see Air Canada’s program here) that gives you free upgrades and lots of other perks - you’re going to have to fly A LOT to get those.
Redeeming Points - Rules of Thumb
Getting good value for your points is key to being successful in the travel hacking game. It’s similar to getting good value for your money - it just makes them stretch so much further. Here’s what you do:
1) Always Redeem For Travel
The golden rule with points related to travel in any way, is to always redeem them for travel - that usually means flights. That gift card to your favourite store and fancy blender sure look enticing - DON’T do it.
Remember your points math from above, and you should be able to keep the golden rule just fine.
2) Keep Travel Plans Flexible
Don’t book your honeymoon on points unless you are super experienced. Don’t rely on points to fund that last minute trip you decided to take either. It could work... but it probably won’t… and you’ll be frustrated.
Just find the lowest price you can and earn the most points you can when booking last minute trips and save your rewards for when you can maximize them most. I recommend booking 6 months out if you can. For the most popular routes and peak times, nearly 1 year ahead can be necessary.
The more flexible you are with dates (try mid-week or Sunday), times (early morning and late night), splitting your traveling party across multiple flights, and considering alternate airports - the better off you will be.
3) Increase Reward Value
It’s pretty easy to do a few basic things to increase the value of your reward when flying. Try these:
- Go to the limit - fly as far as you can within a reward zone without increase the mileage cost. Or book the most expensive hotel within a points bracket.
- Choose location wisely - With flying or hotel stays, location matters greatly. Fly to remote or destinations or on popular routes increases flight cost substantially while points stay the same. A category 3 hotel in hot city might cost way more than an average one.
- Book creatively - Use stopovers, layovers, and open jaw airline rules to help you visit more places to increase both ticket and personal satisfaction value.
- High demand = high price - peak flying times like Christmas and March Break are super expensive, but if you book early enough you don’t pay more with miles. Same goes for hotel prices.
- Upgraded service gives big value - upgrading to business class jacks up the ticket price by a bigger multiple than the points cost. Some hotel chains allow you to upgrade your paid basic room to the club floor or a suite for relatively few points.
4) Book Early, Check Often
There is often limited award availability on any flight or hotel - so you want to book as early as possible to snag the limited inventory.
However, there seems to be a trend in spreading inventory out a bit throughout the year. If a flight or hotel isn’t selling well, they might also open up extra seats so they don’t go empty. Check back often to see what opens up - cancellations do happen as well.
5) Avoid Taxes And Fees
This mostly only applies to flights, but sometimes certain airlines charge less taxes and fees when redeeming an award ticket. Look at all the partner airlines where you can use your points and you might be able to take a $700 tax and fee bill down to $100 or less - especially in Europe.
For example, Air Canada (Aeroplan) is part of the Star Alliance and you can use your miles to fly on any other airline that is part of the alliance. Depending on the airline, they may also have non-alliance partners.
6) Use The Call Centre
It usually costs extra to book your reward flight through the call center instead of online, but calling to ask them questions and find availability costs nothing.
If you have a difficult itinerary to book or need to find flights with lower taxes and fees on partner airlines, make sure you use this service. Once they have found what you need, ask them if you are able to book the same thing online if you really want to save the booking fee.
Keep in mind, that some partners may not be available through online interfaces, so it can pay to call just for that reason alone.
7) Use Transfer Partners To Save Points
Airline rewards programs all have unique reward charts. The cost in miles is often quite similar for equivalent destinations, but not always.
For example British Airways Avios is known for giving good value on short flights to nearby cities. Aeroplan was known for their cheap business class flights - although that has changed some recently. American Airlines AAdvantage has off-peak points rates that can be quite a bargain in economy class.
If you have American Express Membership Rewards (MR) points you can transfer to several airlines directly - or you can transfer first to Starwood Preferred Guest (SPG) - and then on to the more than 30 airlines they partner with.
You get 750 (SPG) points for every 1,000 MR points you transfer, but then when you transfer from SPG to an airline, you actually get a 25% bonus if you transfer in 20,000 point buckets. That bonus makes up for almost all the points lost from the first transfer not being 1 to 1.
I did this when I went to Paris with my wife on miles - I booked our trip at the tail end of the off season so the weather would still be good with AAdvantage. I believe at the time I only needed 40,000 AAdvantage miles and much less taxes and fees than if I went with Aeroplan that would have cost me 60,000 miles.
8) Get Help If Needed
I know you are starting to get overwhelmed and maybe this guide isn’t feeling a newbie friendly as you’d hoped - don’t worry - there are experts out there who can help.
Take your time to soak it all in and focus on starting to earn points. Then, when it comes time to redeem there are award booking services that will help you maximize your reward value and help make your experience unforgettable.
They do cost money - but they are pretty much guaranteed to provide more than their fee in value to you - especially for beginners.
Here are 3 good ones I heard of but haven’t used personally:
Travel Hacking Should Be Fun
Remember, travel hacking is a game - and it should be fun. It makes a nice lucrative hobby that will allow you to explore the world for much less money than you could have ever dreamed of.
So, take it slow, ramp it up over time, and you’ll be flying to new heights before you know it. But - if it starts being more chore than fun - take a step back. Consider traveling the old fashioned way now and then.
Yes - that means actually paying real money to travel!