By The Pointer
After a lot of research, Rob and Elena have a preferred loyalty program to earn points with for their trip to France: American Airlines AAdvantage. Now, they have to earn 60,000 miles each, even though neither of them have any American Airlines miles. This is another complex step where lots of people give up because they don’t know how to earn that many miles. It’s actually a lot simpler than most people think. Let’s look at a few ways to earn miles.
Most people are familiar with the most basic way to earn miles: butt-in-seat miles. In other words, when you buy a ticket to fly on airline or its partners, you earn miles/points based on different factors like the cost of the ticket, the distance flown, your status with the airline, etc. This is not the recommended route for earning significant amounts of miles because it is very expensive and takes a long time. For example, if Rob and Elena had no American Airlines status and paid $412 each for American Airlines flights to New York and back, they’d earn 2,060 miles each (5 miles per dollar spent). At that rate, they’d only need to fly this route about 30 times each and spend $12,360 each to earn enough miles for their “free” trip! I wouldn’t call that a great deal, but there are some exceptions where butt-in-seat miles are a good way to earn miles:
- Someone else is paying – If you fly for work, and your employer is paying for the ticket, add your frequent flier number to the ticket to earn miles on your personal account. The same idea applies in any other situation where someone else is paying for your ticket.
- Unbelievable deals – Some people go on “mileage runs” when the right deal comes along. For example, if there’s an airline that credits miles based on the distance flown (not the price paid for the ticket), and that ticket is heavily discounted, you could effectively “buy” miles at an extremely low price. Personally, I think this is a huge waste when you factor in the time you have to invest. You can’t just buy the ticket; you have to check in and fly as well.
I would say that credit cards are unequivocally the best way to earn large quantities of miles and points at little to no cost. Rob and Elena’s trip is a great example. You saw how expensive and time consuming it would be to earn 60,000 butt-in-seat miles per person. With one credit card, the Citi AAdvantage Platinum Select World Elite Mastercard, you can earn 60,000 miles just through the sign up bonus. The annual fee is waived for the first year so if you choose to cancel the card at the end of the year, you won’t even have to pay an annual fee. Since credit cards are so effective for earning miles, the next article in this series is entirely devoted to them.
Most chain hotels with loyalty programs offer you the option to earn points with that chain or with one of their airline partners. Let’s try another example to see how powerful this option is. If Rob and Elena spent $100 to stay at a Holiday Inn (part of the IHG Rewards Club), and they chose to earn miles with American Airlines, they’d get 200 miles (2 miles/dollar spent). That’s not much, and personally, I’d take 10 IHG points/dollar (IHG's standard earning rate) over 2 American Airlines miles/dollar, but it’s another way to earn.
As with hotels, many rental car companies with loyalty programs also partner with airlines for earning miles. If Rob and Elena spent $100 on a Hertz car rental through Hertz.com, they’d earn 100 American Airlines miles. This also isn’t much, but it’s better than not earning any miles on their rental.
The next time you’re going to purchase something online, you shouldn’t buy directly from the company’s website until you check whether or not you can get a reward for going through a shopping portal. Many people have heard of shopping portals like eBates.com, but I personally check a site called cashbackmonitor.com. They display the earning rates for multiple portals across the internet, and they also include the earnings rates for points portals. If Rob and Elena were going to spend $100 at BestBuy.com, they could search for Best Buy on Cash Back Monitor’s site. They’d quickly learn that they could earn 1 American Airlines mile per dollar (or 100 American Airlines miles) if they click through American Airlines’ rewards portal before purchasing on BestBuy.com.
Before I go into this, I have to say: please do not make investment decisions based on the miles you can earn. However, there are ways to earn miles for decisions you would have made anyway. For instance, if you were going to invest through Betterment, you can click through the offer link on American Airlines’ website to sign up, and you’d be eligible to earn up to 30,000 miles.
You could also open up a checking account with Bank Direct, and earn over 20,000 AA miles for signing up (and completing a few requirements – see below). Opening a checking account isn’t a major investment decision like take out a home mortgage. If you’re willing to go through the effort, there are some easy miles to be earned.
Eat at Restaurants
Rewards Network partners with a number of different airline and hotel loyalty programs plus restaurants all over the United States. You register your credit card with them, and when you dine at one of their partner restaurants, you earn miles (on top of any miles or points you earn from your credit card). With American Airlines, you can earn 1 to 5 miles per dollar spent depending on whether you agree to receive emails from them and how frequently you dine with them.
When you sign up for an airline’s frequent flier program and agree to receive promotional emails from them, you’ll get all sorts of offers. I regularly get emails offering miles in exchange for taking online surveys. There are also offers for switching energy providers, getting identify fraud protection and lots of other promotions.
Keep Opportunity Cost in Mind
We just talked about several ways to earn miles, but it’s always worth thinking beyond the miles and seeing if what you’re doing is truly worthwhile. Some people get excited if someone offers them 250 miles to fill out a survey, and they won’t hesitate to spend an hour taking that survey. In another reality, if the email said you’d earn $3.50 (assuming AA miles are worth about 1.4 cents each) for spending an hour on a survey, that same person is likely to say, “No way.”
At the same time, people will say, “Signing up for a credit card is annoying. I have to track my spending to make sure I’m meeting the minimum spend requirement, and then I have to remember to close the card before I owe an annual fee.” I’d say, “Really?” A 60,000-mile sign up bonus is worth at least $840 (even more for Rob and Elena). How much time does it take to track your spending (which credit card companies already do for you online and through your statement)? Avoiding an annual fee is also easy. You get your statement, you see the fee, you spend 5 minutes calling the credit card company, and then they reverse the fee and close the card. That was at least $840 worth of points for maybe 2 hours of work. Unless you’re Oprah, it would be hard to beat that hourly rate. In our next article, we’ll go into more detail on earning points with credit cards so you learn the ins and outs of the most efficient route to free travel.