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🤑 Lets Get Into Credit Card Points and Travelling With Them

🤑 Lets Get Into Credit Card Points and Travelling With Them

Chexy
June 22, 2024

In This Issue:

🔑 Credit Card Points Explained

🚨 Booking Flights with Points: Understanding the Game of Points

🗺️ Chexy Deals: Madrid, Copenhagen and Paris

The Game of Credit Card Points

We frequently discuss the best loyalty programs, redemptions, and maximizing your credit cards here at the Rundown. With many new subscribers, today we're providing a beginner-friendly overview of how to make the most of these programs, along with some general travel tips.

Traveling is expensive. No sugarcoating it—flights, hotels, meals, and those must-have gifts for family and friends can empty your wallet faster than your partner. Am I right? Most of us save up for years to get one dream trip that we honestly reconsider or feel guilty about due to the cost. 😆

Travel does NOT need to be expensive. You just need to know how to use your everyday spending—bills, rent, and even clothes shopping (brave move in this economy, by the way)—to pay for your next vacation.

But enough chit-chat. Let's dive into what your points can do for you and how you can outsmart the system designed by the ones pulling the strings. 🙌

First Stop: Understanding Points and Loyalty Programs

To understand points and jet-setting with them, you need to understand loyalty programs. They're everywhere—airlines, hotels, grocery stores, you name it. They’re designed to reward you for sticking with a particular brand. For instance, fly with Air Canada and earn Aeroplan points, stay at a Marriott and collect Bonvoy points, or shop at Safeway to stack up Scene+ points.

Earning enough points to redeem for something impactful is tough, but patience is a virtue, which we’ll get into below. For example, collecting 40,000 Aeroplan points just from flying or using your Aeroplan credit card might get you an economy flight, but it can take ages. Luckily, there’s a much faster way to rack up points: welcome bonuses. 😜

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A Simple Rule of Thumb

Don’t settle for a card that offers 1-2% cashback or points per dollar spent. This is pretty basic and honestly, the bare minimum. Look for cards that give higher returns in categories where you spend the most. 🚀

For example, some cards offer 5x points on groceries and dining like the American Express Cobalt Card. If you eat out a lot, this is a great option. If you spend more on transit and driving, cards that offer multipliers on those categories are the best bet.

Over time, these points add up. If you need to make any major purchases, put them on your credit card and pay it off right away! This way, you’ll be getting what you already need and moving that much closer to the welcome bonus and your next vacation!

Perks and Points

Speaking of welcome bonuses, these are key to getting more points and, thus, free travel. However, it’s not as easy as you might think. Banks want customers, and credit card welcome bonuses are their way of enticing you. They know that over time, they’ll make money from transaction fees and, let’s be honest, the interest from customers who carry a balance.

Welcome bonuses often come with multiple requirements, allowing you to earn a boatload of points by spending a certain amount in a specific timeframe. ⏰

For example, the sign-up bonus for the TD Aeroplan Visa Infinite Card can earn you up to 40,000 Aeroplan points. Pretty great, right? But this is broken up with the requirements below:

10,000 points when you make your first purchase with your new card.
15,000 points when you spend $7,500 within 180 days of account opening.
A one-time anniversary bonus of 15,000 points when you spend $12,000 within 12 months of account opening.

As you can tell, it’s never as easy as they make it out to be, but with some strategic planning, this can actually be to your benefit.

When you’re just starting out, look for cards with attractive welcome bonuses and manageable minimum spending requirements. If you know you have a big purchase coming up, consider looking for a credit card with a large welcome bonus.

Remember, the goal is to meet the SUB without putting yourself in a situation that might come back to haunt you (like a high balance on your credit card). Meeting the spending requirement is often as simple as using the card for your usual expenses like groceries, bills, and rent.

Maximizing the Value of Your Points

Now, let’s get into the good stuff. The value of points differs with each loyalty program, so for this example, we’ll focus on Aeroplan, which is possibly the most used throughout Canada. But for those who don’t use Aeroplan or collect Aeroplan points, click here to see the valuation of your favorite loyalty program points.

Getting back to Aeroplan. Aeroplan points are highly versatile, but their best redemption value is for flights. We value Aeroplan points at 2 cents per point. This means that for every 10,000 points, you can expect approximately $200 in travel value. This doesn’t mean that that’s the overall value of the points because, for instance, you can book a one-way trip This valuation makes flights the best way to use your Aeroplan points, ensuring you get the most bang for your buck. 💸

Expect a bit of trial and error—I've had my fair share of "oh sh*t" moments too. 🫣 But don’t worry, we’re here to provide you with the tools and guides you need to navigate this process smoothly.

Flying With Points

Time for a real-life example. Let’s say you get the card mentioned above (TD Aeroplan Visa Infinite) and pay $2,500/mo in rent. By using this card to pay your rent, you’ll not only grab the 40,000 welcome bonus but also an additional 30,000 points throughout the whole year, all by paying your rent that you already would have to.

Here’s how you can now use the points you’ve earned to book flights. I’ll use the 40,000 welcome bonus as an example.

A Step By Step Guide

Searching for Flights: Enter your departure and destination cities, travel dates, and the number of passengers. Make sure to select the option to search/book for flights using points.

💁‍♂️ Pro tip: Be flexible with your dates and destinations to find the best value. Aeroplan often has better availability on Mondays, mid-week, and during off-peak times.

Selecting Your Flights: Review the available flight options. I personally pay attention to the points required and the dates. Some dates are cheaper than others as seen below.

I, like most frequent travelers, use Aeroplan’s reward chart to determine a good deal. This can help you understand how many points are typically needed for different regions. For example:

Short-haul North America: 6,000 – 20,000 points one-way
Long-haul North America: 12,500 – 35,000 points one-way
Europe: 35,000 – 60,000 points one-way

Tip: It’s best to find reward flights below the typically required amount so that you can not only save points but also get the best deal possible.

Here’s an example of a reward flight that can be booked with the welcome bonus of 40,000 points:

As you can see, this is a very good redemption since flights from North America to Europe usually cost you 35,000 - 60,000 points. With this being 29,300 points, not only is it 5,700 points below the general cost saving you points for your next trip. With Aeroplan points being valued at 2 cents, as explained above, this trip will only cost you $589, whereas the same one would cost you $652 in cash. 💰

And the best part about this is that you used your bills, rent, and regular spending to fund your trip instead of forking up hundreds of dollars. 😬

Ready to Take Off?

After this, it’s as simple as selecting the flight and booking it. The credit card and points game might seem overwhelming at first, but starting small is the way to grow, that’s how I got started. Get a card with a good welcome bonus, use it wisely, and watch your points grow. Before you know it, you’ll be booking that dream trip, flying business class, and staying in luxury hotels—without breaking the bank.