@nachoslibres wrote:
@notfancy wrote:I'm planning to do a bit of traveling over the next couple years. I don't understand cards that offer "points" or "miles" though. In doing some research what it sounds like is that with certain cards, I'd have to pay the full fee... lets say $500 to be an even number. Now, once I do that, I can cash in some of my "points" or "miles" not to get a free flight or anything, but to get a dollar amount off of the $500 once I purchase the tickets.
Am I misunderstanding? I thought I've read where people have used points exclusively to book and buy tickets, but it appears from my reading that this is not the case? Can someone educate me? I could really use some clarity as well as suggestions for good points or miles cards. Cash back I like and understand because it's very basic and simple.. the other things... not so much.
Thank you, Fico Family!
I'll start with the Arrival Plus card. I personally think of it as a "cash back" card - but for the full redemption value you need to redeem the "miles" against travel. Here's how it works - you earn 2 miles for every $1 you spend. So if you spend $500 you get 1000 miles. Now, you can redeem those 1000 miles for cash back you only get $0.005 for those miles (so $5). However, if you bought a plane ticket for $500 you could redeem those miles against the $500 charge for $0.01 per mile (so $10). The only difference is that you had a travel charge to redeem it against - but either way you are effectively getting cash back - since you do get charged for the travel purchase - but you can immediately redeem whatever miles you have on hand to receive an immediate credit on it.
Next, the Chase Ultimate Reward system (URs). These are basically points that can be converted to miles at many different travel partners where you can earn between $0.01 to well over $0.02 per UR - depending on how you use the transfer partners. The big bonus on the UR system is that with the Freedem card you can earn up to 5.5 URs/$ and on the Chase Ink premium cards 5 URs/$ depending on what categories you spend. If you can get $0.02 per UR (which I have found to be easily doable) you are earning between 10-11% back on your purchases that are in the bonus categories. The upside is that you don't have to purchase travel to redeem miles against - you just transfer the miles and then use them to book your travel. The downside is that you have to do your research, and unlike the Arrival Plus card, there will be restrictions on how you can use the miles.
So on the Arrival Plus, if I spend $1000 and get 2000 miles, what does that mean when I buy a plane ticket? $20 off is insignificant to me. Does "2000 miles" actually mean I can have a free roundtrip ticket from Sacramento to Los Angeles (800 miles)? I've never used a miles card in my life, have no idea what they do
@notfancy wrote:
@nachoslibres wrote:
@notfancy wrote:I'm planning to do a bit of traveling over the next couple years. I don't understand cards that offer "points" or "miles" though. In doing some research what it sounds like is that with certain cards, I'd have to pay the full fee... lets say $500 to be an even number. Now, once I do that, I can cash in some of my "points" or "miles" not to get a free flight or anything, but to get a dollar amount off of the $500 once I purchase the tickets.
Am I misunderstanding? I thought I've read where people have used points exclusively to book and buy tickets, but it appears from my reading that this is not the case? Can someone educate me? I could really use some clarity as well as suggestions for good points or miles cards. Cash back I like and understand because it's very basic and simple.. the other things... not so much.
Thank you, Fico Family!
I'll start with the Arrival Plus card. I personally think of it as a "cash back" card - but for the full redemption value you need to redeem the "miles" against travel. Here's how it works - you earn 2 miles for every $1 you spend. So if you spend $500 you get 1000 miles. Now, you can redeem those 1000 miles for cash back but you only get $0.005 for those miles (so $5). However, if you bought a plane ticket for $500 you could redeem those miles against the $500 charge for $0.01 per mile (so $10). The only difference is that you had a travel charge to redeem it against - but either way you are effectively getting cash back - since you do get charged for the travel purchase - but you can immediately redeem whatever miles you have on hand to receive an immediate credit on it.
Next, the Chase Ultimate Reward system (URs). These are basically points that can be converted to miles at many different travel partners where you can earn between $0.01 to well over $0.02 per UR - depending on how you use the transfer partners. The big bonus on the UR system is that with the Freedom card you can earn up to 5.5 URs/$ and on the Chase Ink premium cards 5 URs/$ depending on what categories you spend. If you can get $0.02 per UR (which I have found to be easily doable) you are earning between 10-11% back on your purchases that are in the bonus categories. The upside is that you don't have to purchase travel to redeem miles against - you just transfer the miles and then use them to book your travel. The downside is that you have to do your research, and unlike the Arrival Plus card, there will be restrictions on how you can use the miles.
Thank you so much for putting the math in there for me. That is where I start to get lost.
Honestly, it seems more efficient to use a cash back card. With your same math, and my Cap One card, I get 1.5% back no matter what, so on that same $500 ticket, with Barclay it sounds like I'd get $5-10 the Chase part I'm a little confused on, but I think you're saying to me that I'd get .01 to .02 for every dollar I spend which would amount to the same 5-10 dollars....I'm not sure about the 10-11 %... but on my Cap One card, that $500 ticket will get me $7.50 back which is pretty equivalent to the other cards?
The cash back cards like arrival are just that cash back. The value is fixed. The value in something like chase ultimate rewards points is you transfer them to travel partners. Then the value you get back can be much much greater than what you would get back using the arrival, but it all depends on how you redeem your points. It requires thought and some effort. With higher end hotel properties and premium airline travel (1st/business class) you will get more bang for your miles. If your looking to travel on the cheap and don't care about fancy hotels or premium air travel and don't have any specific loyalty to certain airlines/hotels then your probably better off with something like an arrival where you can shop around for the cheapest price and then redeem the cost with your points.
;
@Bman70 wrote:
@nachoslibres wrote:
@notfancy wrote:I'm planning to do a bit of traveling over the next couple years. I don't understand cards that offer "points" or "miles" though. In doing some research what it sounds like is that with certain cards, I'd have to pay the full fee... lets say $500 to be an even number. Now, once I do that, I can cash in some of my "points" or "miles" not to get a free flight or anything, but to get a dollar amount off of the $500 once I purchase the tickets.
Am I misunderstanding? I thought I've read where people have used points exclusively to book and buy tickets, but it appears from my reading that this is not the case? Can someone educate me? I could really use some clarity as well as suggestions for good points or miles cards. Cash back I like and understand because it's very basic and simple.. the other things... not so much.
Thank you, Fico Family!
I'll start with the Arrival Plus card. I personally think of it as a "cash back" card - but for the full redemption value you need to redeem the "miles" against travel. Here's how it works - you earn 2 miles for every $1 you spend. So if you spend $500 you get 1000 miles. Now, you can redeem those 1000 miles for cash back you only get $0.005 for those miles (so $5). However, if you bought a plane ticket for $500 you could redeem those miles against the $500 charge for $0.01 per mile (so $10). The only difference is that you had a travel charge to redeem it against - but either way you are effectively getting cash back - since you do get charged for the travel purchase - but you can immediately redeem whatever miles you have on hand to receive an immediate credit on it.
Next, the Chase Ultimate Reward system (URs). These are basically points that can be converted to miles at many different travel partners where you can earn between $0.01 to well over $0.02 per UR - depending on how you use the transfer partners. The big bonus on the UR system is that with the Freedem card you can earn up to 5.5 URs/$ and on the Chase Ink premium cards 5 URs/$ depending on what categories you spend. If you can get $0.02 per UR (which I have found to be easily doable) you are earning between 10-11% back on your purchases that are in the bonus categories. The upside is that you don't have to purchase travel to redeem miles against - you just transfer the miles and then use them to book your travel. The downside is that you have to do your research, and unlike the Arrival Plus card, there will be restrictions on how you can use the miles.
So on the Arrival Plus, if I spend $1000 and get 2000 miles, what does that mean when I buy a plane ticket? $20 off is insignificant to me. Does "2000 miles" actually mean I can have a free roundtrip ticket from Sacramento to Los Angeles (800 miles)? I've never used a miles card in my life, have no idea what they do
Nope. I can see why you would think that, but the reality is that with the arrival card for 2000 miles your getting $20 that you can apply to one to your purchases. Keep in mind even if you have airline miles the number of miles it costs to redeem a ticket has nothing to do with the actual distance, but instead you check the website from point A to B and they tell you how many miles are required to redeem that ticket. For example flying anywhere on AA in the 48 states would cost 20,000 airline miles for economy. Of course, there are certain times they have discounts where seats cost less etc.
