Last week I talked about how I treat miles and points as a tax-free asset class in my portfolio.
That’s because they literally translate into thousands of bucks in savings. For every trip.
It’s one of the highest impact ways to boost your nest egg because those dollars stay compounding in your portfolio rather than getting spent.
That’s why for this week’s podcast, I invited Sarah Page Maxwell, a miles and points expert, to share strategies on how to maximize point redemptions specifically for free flights – especially international flights, since those have the biggest arbitrage opportunities for outsized redemption value.
Whether you’re booking long-haul economy or splurging for business class, today’s episode will train you to think strategically about award travel so you save big on your future trips…and boost your nest egg at the same time!
What you’ll learn in this episode:
- How the miles and points landscape has changed over the years and where the opportunities still are
- Strategies for maximizing your point redemptions
- What is considered a “good” redemption value (and why you shouldn’t just use the sticker price of a flight)
- How to pick the flexible point program that best matches your travel goals
- Tradeoffs for redeeming from an issuer’s own travel portal vs. transferring out to partners
- Tools for getting the latest scuttlebutt on redemption arbitrage opportunities/inefficiencies
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Links mentioned in this episode:
- MileValue and its Award Booking Service and Credit Card Consultation Service
- Credit card churning subreddit
- After our interview, Sarah also shared this resource: Where to credit. Tool to help you figure out where to best credit miles you earn when you fly. From Sarah: “Many don’t realize that just because you’re flying American doesn’t mean you have to credit the miles you earn to American. Credit them instead to a foreign frequent flyer program that hasn’t shifted to a revenue-based earning structure, but instead still awards miles based on distance flown. Simply put in what airline you’re flying and in what class, and it tells you how many miles you’d earning crediting to all the different partners.”
- HYW private Facebook community
Read this episode as a post:
My guest today is Sarah Page Maxwell.
Sarah is a self-professed miles nerd, which she says she became after moving to Buenos Aires and beginning a digital nomad lifestyle that would otherwise be too costly without miles and points. She now shares her reward travel strategies on her website MileValue to help others also save on travel around the world.
Sarah, thanks so much for joining us today to share insights and strategies about reward travel redemptions.
Sarah Page Maxwell 1:49
You’re welcome, Andrew. Thanks for having me. I’m happy to be here.
Andrew Chen 1:52
I would love to start just by learning a little bit more about your background. How did you get into becoming a miles and points expert? And what have been some of the personal experiences in terms of benefits you’ve enjoyed with miles and points?
Sarah Page Maxwell 2:04
Sure. Well, to go to the beginning, I grew up in Raleigh, North Carolina. After that, I went to college at the University of Georgia.
And not too long after graduating from UGA, I relocated to Buenos Aires, Argentina, as you said. So really a lot of the reasoning behind me getting into miles and points was starting a transient lifestyle, but being based in Buenos Aires.
Argentina is at the bottom of the world. And it’s quite expensive to fly to Argentina from the U.S., to other places from Argentina. And for a while there, it was actually quite expensive to fly within Argentina because there was really only one airline and it was nationalized.
That’s changed recently, but that’s a whole other conversation.
But I got into miles and points because it was necessary, because I wanted to be able to travel around Argentina, to travel outside of Argentina, to go back home and visit my friends and family. So that had a lot to do with it.
Also, moving to a big foreign city meant I have been surrounded by lots of international people who travel a lot. And I really started learning from them, my friends.
Monkey see, monkey do. So that’s what I did.
I also met a guy named Scott Grimmer, who was the founder of MileValue, living in Buenos Aires. [At the end of 2017, I purchased and took over MileValue from Scott.] He actually lives right around the corner from me. And he is the one who in the beginning told me to get a couple of cards.
One was the U.S. Airways Card, back when that existed, and a Citi AAdvantage Card. And I collected the bonuses from those cards. And U.S. Airways miles turned into AA miles.
And then I used that big heap of bonus miles to travel to Thailand. I flew Cathay Pacific Business Class. This was before the devaluation, 110,000 miles or something.
And I was hooked. I flew from New York to Hong Kong to Bangkok in a flying bed with bottomless champagne, and I was 26. And the rest is history.
Andrew Chen 4:32
Awesome. I’d love to get your perspective on how has the miles and points redemption landscape changed over the years?
You’ve been doing this for a while. I think it’s probably unsurprising to say that it’s gotten more difficult, but how exactly? In what ways?
And what are some trends in the near to medium future that other travel hackers like yourself should expect to come onto the scene?
Sarah Page Maxwell 5:01
The biggest, most industry-changing shifts that we’ve seen started back when Delta, who tends to lead these big industry ships, switched to a more revenue-based loyalty program.
So they started on the earning side of the equation. And by that, I mean when you pay cash to fly, you earn miles. You used to earn miles based on how many miles that you flew.
What Delta changed back in the day was, instead of earning miles based on the distance that you flew, you earn miles based on how much your ticket cost.
Eventually, American and United followed suit, as they always do, and I believe they will always do.
And now what we’re seeing is that revenue-based model being shifted to the redemption side of things.
So Delta again made the first move there. And this was actually quite a while ago, years ago, when they eradicated their award charts and started basing their mileage prices on the cash price of the ticket.
Very recently in mid-November, United followed suit and American is showing very solid signs of following suit in the near future.
This is the reality that we live in. And it sucks, on one hand, because it’s much harder to get outsized value from redemptions this way.
First, I should speak to the earning side of the equation. To me, those shifts to a revenue-based earning system didn’t matter as much. It still doesn’t matter as much because I’m not the kind of person who earns miles and points from flying.
I don’t have tons of money. And I don’t fly for business and get reimbursed by my boss. I run my own small business, that is, this blog MileValue.
So I earn all my miles and points from signing up for credit cards and cashing in on bonuses, so I have a really high rate of return on all my spending. I’m almost always spending towards a minimum spending requirement for a signup bonus. If not, I am highly maximizing category bonuses on credit cards.
That’s how I earn all my miles and points. That’s how I teach all my readers to earn miles and points. I don’t write or really give advice for the kind of people that are earning their miles by flying.
So therefore, the earning side of things and that shift, it didn’t matter to me as much.
But of course, on the redemption side, it does matter because a large part of what I have learned about and try to teach others about is how to spend your miles wisely.
And now we’re shifting to this revenue-based model instead of having award charts where there’s a published price of how much it is to fly from North America to Japan and North America to Southern South America. We have prices that are starting to reflect the actual cash price of the ticket.
And then you lose this opportunity for outsized value because it was those award chart sweet spots is the industry jargon. An award chart sweet spot means a cheap award price where you’d spend a lot less miles using AA miles than United miles or Singapore miles than United miles, etc.
And when we lose especially that transparency, which is a whole other but related issue, that’s a problem. It’s harder to save, to have the correct amount of miles. You don’t know if the programs are just going to change their prices whenever.
But it’s hard. The positive side of this shift towards the revenue-based redemption, and this is certainly the way that the airlines are spinning it, and I believe that it probably is true, is that it’s a positive for a lot of travelers.
They say that the majority of people spend their miles on domestic travel. And I haven’t looked up stats on that recently, but I believe that’s true. It logically makes sense.
People don’t always have the opportunity to fly around the world like I do because they have jobs that require them to go to offices and they can’t just take their computer with them, etc. So it makes sense.
So if they are flying domestically, these domestic tickets are cheap, much cheaper than international and premium cabin tickets where those tickets tend to be very expensive and were the ones that were getting outsized value from programs where you have award charts.
If these domestic tickets are cheaper, then following that logic, the mileage prices for the domestic awards are going to be cheaper. And that is how they’re spending it.
And that is somewhat true. And we’re already seeing that. The proof is in the pudding.
There are award prices now for domestic tickets within the U.S. that are cheaper than the average standard domestic one-way award used to be, and still is, often 12,500 miles.
But maybe that ticket only costs $70. And why would you want to spend 12,500 miles on a ticket that costs $70 when you could spend 30,000 miles to fly to Southern South America for a ticket that probably costs $600 or $700? So I get it.
So it’s going to be good for a lot of people, but it’s going to be bad for the people who really liked using their miles for those high value awards, meaning where we can get outsized value on paying 40,000 miles to fly business class somewhere, because those awards are going up in price because the airline tickets cost more.
And the big strategy there and the shift that the whole miles and points world is moving towards, and the experts have been doing it for a while and now everyone is going to need to shift, is utilizing foreign programs because foreign loyalty programs, which now we have a lot of access to, thanks to transferable credit card points, they are not based on the revenue prices of tickets.
So they’re still using award charts and pricing their awards on region to region. And so you can still get that outsized value. So there’s still tons of opportunity.
And that’s why I don’t think this game is over, or will be for a while. It’s still quite exciting.
I think it just requires a little more learning, a little more strategy. Or if you don’t feel like putting in that learning, hire me to consult you on which cards to get for your travel goals, and then hire an award booking service, which we also offer, to book your awards for you wisely, because there’s plenty of those out there.
Andrew Chen 13:21
Okay. A lot of good stuff there. I want to probe into that a lot more deeply here in a moment.
But you mentioned these flexible point programs because that’s maybe the pathway into still getting outsized reward redemptions. What are the main flexible currency point programs, branded programs that serious travel hackers, at least in the U.S., should know about? And if you could comment a little bit on their key differences and pros and cons, that would be helpful.
Sarah Page Maxwell 13:51
Sure. All of the major credit card issuing banks have these flexible travel points.
Chase has Ultimate Rewards. Citi has ThankYou points. American Express has Membership Rewards.
Capital One now has points that transfer to airlines as well instead of just having to redeem them for one cent each.
So I would consider the first three that I said (Chase Ultimate Rewards, Citi ThankYou points, and Amex Membership Rewards) to be the three major currencies because all of those points transfer at a one to one rate to various domestic and international loyalty programs as well as some hotel partners for hotel points.
Capital One, I’d say, has somewhat joined the ranks. Their earning rates aren’t quite as good because they don’t transfer one to one. They transfer either 2:1.5 or 2:1, that is, Capital One mile to airline mile.
So those are the top four.
And then Marriott Rewards, which recently acquired SPG, I would also consider them up there because, yes, they are hotel points, but they actually transfer to almost every single airline loyalty program that exists.
Again, transfer rate is not so great, 3:1. But if you are simply opening those cards for their bonuses and not focusing your spending on them, so you have a higher rate of return just working towards that bonus, then those points can be useful.
But their everyday earning rates aren’t good. But it is valuable that they transfer to almost any loyalty program, so they’re nice to top off an account if you need something like that.
But these points are really going to be the key, I think, moving forward. And it’s really what I encourage everyone and have for a very long time now.
And it’s what anyone in my shoes, any miles and points blogger would also recommend, is that if you’re a traveler, you should be putting your credit card spend on a card that earns one of these flexible point currencies instead of just a card that earns purely AA miles or United miles basically because of the whole issue that I just explained.
Unless you’re a domestic, especially economy flyer, then maybe it makes sense to put your spending on an AA or a United card. Maybe all their perks, like the free checked bags and whatnot, are worth it, and you only fly AA for work on the same routes or whatever.
But in general, we need to be focusing our shift towards understanding and learning about these foreign programs, which all of these transferable points offer us access to. Every single one of those point currencies I just mentioned, at least they cover every alliance.
So Ultimate Rewards transfer to Singapore Airlines, which is in the Star Alliance. And they transfer to Flying Blue, which is in SkyTeam Alliance. And they transfer to British Airways Avios, which is in the Oneworld Alliance.
And you’ll find that holds true with each of these point currencies. So you’ve got to get on these point card trains because that’s where all the value is going to be, especially moving forward.
Andrew Chen 18:02
Is that the key to these flexible currency program redemptions? That as long as they have one airline in each of the major alliances, that’s what you’re looking for?
And also, if folks are going to concentrate their energy on just one or two of the flexible currency programs, how would you stack rank them?
Sarah Page Maxwell 18:27
That depends. I think that you need to look at yourself and evaluate yourself as far as what kind of travel you plan on doing.
For example, the Sapphire Reserve Card, which is Chase’s most premium travel credit card that earns Ultimate Rewards. Ultimate Rewards transfer to I think 10 different airline partners that cover all three alliances.
But also, a really nice perk of the Sapphire Reserve is that you can spend your points through their travel portal for 1.5 cents each.
And this is going to dive into how do we value points here, but this is a good segue.
You have your transferable points that can transfer to 10 airlines.
Say we’re talking about Ultimate Rewards. Let’s say we want to buy a ticket to Buenos Aires.
So we look and we see the flight that we want. What airline is it on? What miles can I spend for that flight? Which some people don’t realize: It’s a United flight, but that doesn’t mean you have to spend United miles on it.
You can spend Singapore miles on it because they’re in the same alliance. That’s the key. And Ultimate Rewards transfer to Singapore miles.
So we find out how many miles we would need to spend on this flight. Ultimate Rewards transfer one to one. So that tells you how many points you would need.
And that takes a little bit of knowledge right there, being able to look at your different options, your different loyalty programs, and say, “Which program am I going to spend the least amount of miles on using for this flight?”
So then let’s say we come to that conclusion. We find out that we’re going to use Singapore because we’re going to spend less miles using Singapore than United. So we have that number of points in one hand.
And then we go to the travel portal and we look up how much it’s going to cost to fly to South America with cash. And that’s actually a quite simple process that everyone can do. That’s literally just looking up the price of a ticket.
So we look and we see how many points we’re going to have to spend on that cash ticket, which depends. With the Sapphire Reserve, like I said, you get 1.5 cents of value per point.
Some of the cards only offer one. Amex, I’m pretty sure, just gives one cent per point for their travel portal redemptions on cash flights.
But anyways, we have how many points we would need to spend if we bought through the travel portal on a cash flight. We have how many points we’re going to spend on a flight using miles. And then we just choose which one are we going to spend less points on.
So to circle back to your original question, picking which card is good for you as far as which transferable point currency card, you might not know that at first, honestly. I think it takes some trial and error because you’re going to need to make redemptions.
And maybe there are those nerds out there, and maybe that happens to be your readership in particular, who want to just learn from the beginning, “Which programs are going to really suit my travel needs?” But I think the majority of people are going to have the incentive in the moment as time goes on and you want to book a trip.
And so you don’t have to figure out what your travel patterns are, whether that is you’re flying domestically, internationally, where you’re going internationally, and which miles are going to suit you because of those places that you go. You can figure out in retrospect which card is going to work for you long term for everyday spending.
That being said, bonuses are great for everybody, as long as you’re not afraid to open up various credit cards and you do it in a calculated fashion that doesn’t hurt your credit score and that doesn’t get you denied.
Because the banks are onto us in that sense. It’s called credit card churning, opening up lots of cards for bonuses.
They have rules, some that are published, some that are not, that have all been hammered out by bloggers like myself over time. So as long as you follow these rules, then you’ll be good. But it’s a science.
Andrew Chen 23:53
Yeah, totally. So even if there’s not one definitive flexible currency program that you can say right now, it sounds like, if I’m understanding correctly, at least the high level process that one might help somebody think through this is to first think about what are the kinds of destinations and the kinds of flights you will likely take.
What suits your personality? Are you going to be traveling to South America, Europe, Asia? Are you going to travel mostly domestically?
Then figure out what airlines actually will get you there, taking into consideration the partner airlines that you might be able to transfer from.
And then with those airlines, go look at the flexible currency programs to see which programs actually have the best coverage over those airlines.
Is that the big picture process?
Sarah Page Maxwell 24:39
Yeah. I would say on a high level, that’s a good way to put it.
There are other things to consider as well with these transferable points, like transfer times, for example. They don’t always transfer instantaneously from the point program to the frequent flyer program.
For example, Ultimate Rewards, Chase’s points, they actually almost all transfer instantaneously, except to Singapore Airlines, which can take a day or two. Membership Rewards, mostly instant, with the exception of a few foreign partners. ThankYou points, about half of them transfer instantly.
So I’m starting with, as far as if you want those instantaneous transfers, which is important for booking scarce awards like premium cabins, then Ultimate Rewards might be especially advantageous because they almost always transfer instantaneously.
Membership Rewards, most of them do, too. ThankYou points, not as quickly.
And then Capital One is about the same as ThankYou points. About half of them are instant.
The max that it usually takes, and this is usually the case for transferring to foreign loyalty programs, is a couple of days, maybe two or three days. Sometimes there can be oddball situations where it’s a week.
I’ve had a terrible situation transferring Marriott points to Etihad, which took months. It was awful. It was god-awful, and I don’t recommend transferring Marriott points to foreign programs for that very reason.
Also, Marriott has been through a hell of a lot recently, a really massive merger. And they changed their whole rewards program, so their tech stuff is all kinds of turned around.
But point being, it’s important to pay attention to those transfer times, especially if you want to book scarce awards. But there’s also strategies to take to protect yourself from that.
Some programs will let you put their awards on hold. Some for free. More and more these days, they’re starting to charge because they realize this is a nice perk and they don’t make money from it.
Andrew Chen 26:57
What does that mean to put it on hold? Is that like to take an advance or something?
Sarah Page Maxwell 27:01
It can mean different things. But in general, it means that they save it. The airline program saves those seats for you.
No one else can book it. And you have 24 hours to a week to book.
United makes you pay for, I think it’s called fare lock.
And AAdvantage actually still lets you put stuff on hold for a week for free, which is great, although that doesn’t matter so much in the context of this conversation because actually, interestingly, there is no transferable point currency that transfers to AAdvantage.
But a lot of programs now let you put things on hold. So take advantage of that if you can, especially with international and premium cabin awards. It’s very important because that stuff is very fickle.
And let me tell you, it is so frustrating when you put in all the work to find your perfect dream award and then it disappears while your points are transferring. So pay attention to the transfer times and just understand that there’s a lot of balls in the air with this process.
Andrew Chen 28:07
Is there somewhere where folks can actually see, for each flexible currency program, what are the transfer times to each of their programs? Where can people see that?
Sarah Page Maxwell 28:16
Yes, indeed. I have those all listed in charts on my website. They are various blog posts.
I believe they all have the title of “How long does it take Ultimate Rewards to transfer?” “How long does it take Membership Rewards to transfer?” or “Transfer times of X points.”
So I have charts that show all these transfer times that I update periodically.
Andrew Chen 28:45
Gotcha. Okay, cool.
A while back, you were talking about how to value points. And I was curious, especially for premium or international travel, maybe especially for premium cabin international travel, do you tend to think about the value of points in terms of the sticker price of the ticket or your personal willingness to pay? What’s your rule of thumb for that?
Because even though a point redemption may be on the more expensive side for a premium cabin international award, should that matter if you yourself were not going to be willing to pay cash for that anyway? Should those things be decoupled?
Sarah Page Maxwell 29:40
I think that you should absolutely pay attention to that.
And from my perspective, when I’m figuring out the value of an award, I am going to take the true value of an award, which I do not think is necessarily the sticker price. I think it’s going to be the lesser of either the true cost or your perceived value.
So with a premium international cabin award, like you were talking about a second ago, that’s often going to be the perceived subjective value.
Because I’m not going to spend $10,000 on a first class flight. Absolutely not. Maybe somebody else would.
And this is a key thing to circle back to, too. The value of a mile is so incredibly personal.
And you can use bloggers. We all have our estimated values.
But I think if you’re really going to dive into this game, it’s very crucial that you hammer out your own valuations over time, because value is so subjective. So I take the lesser of either the sticker price or the perceived value. And the way that it could work on the other end of things, which people don’t really think about.
I think the obvious example is the first class flight example of it costing $10,000, but I think I would really more likely value that at about $2000 or $3000.
The other end is, because you always have to balance things out, there’s a $200 economy flight and it happens to only cost $200. But this flight is really important to you because you need to fly across the country to propose to your girlfriend.
And the perceived value there is $4000 because you got to get there for this moment that’s so important. But the sticker price is $200.
So it works on both ends. It makes more sense thinking about it from the first class example. But you have to take the lesser of either the sticker price or the perceived value.
Andrew Chen 31:57
Yeah. I think that’s really good advice and something important to keep in mind because I think it can be easy to just robotically think, “That’s the sticker price,” and not really just take a moment to think about what it’s actually worth to you.
Sarah Page Maxwell 32:12
Sure. Yeah. I think people, especially some miles nerds, really get off on “I got 20 cents of value per mile.”
And I’m sorry. I just don’t believe them when they say that because all of us that are in this hobby, a lot of us do it because we’re cheap. And I’m not going to pay $2000 for a first class flight because I value value.
Andrew Chen 32:38
I love it.
The other thing I was curious to get your thoughts on are let’s say you have it in your mind that you want to fly from New York to Buenos Aires or something like that. And there’s many ways you can get there in terms of the redemption part.
You can look up on a travel portal to see what the price of the ticket is. But then the next step is to figure out whether partner airlines or the actual metal you’re flying is going to be the best value in terms of the redemption.
Is there some tool folks can use to make those apples to apples comparisons, to say, “I want to go to Buenos Aires. What is going to be the highest value or lowest cost redemption in terms of award bookings?”
Is there some resource that folks can use for that?
Sarah Page Maxwell 33:28
Yes, there is. And I’m looking it up right now. I’m pretty sure it’s milez.biz or something along those lines.
The Global Frequent Flyer Miles Calculator. I can send you the link after this.
Andrew Chen 34:03
Okay. That would be great. I’d love to link to that.
Sarah Page Maxwell 34:05
And I think there’s probably other tools like this out there. Maybe there’s one even better.
I wouldn’t put all your eggs in that basket. I think it’s a really great tool to start off with to see your options, especially when you’re trying to compare.
You have these transferable points and you’re not sure about the programs and you need a little help. I think it’s somewhere to start.
But these tools are not always considering the intricacies and nuances of award programs, which are really hard to build into algorithms and software when these programs are constantly changing. That’s why miles blogs exist.
So it’s a good place to start, but I would take what you find and then research it further or use an award booking service.
Andrew Chen 34:55
By researching it further, do you mean actually going to verify on the airline’s website or the partner airline’s website to actually see that that point amount is still the same?
Sarah Page Maxwell 35:08
Yes, I would definitely do that as a means of double checking it.
And if you’re trying to do anything a little bit more complicated as far as stopovers or an interesting routing, then you need to start diving into the terms of the loyalty programs. Just Googling. Just good old-fashioned Googling.
And then also looking through the information that we as miles bloggers write about, that I write about on MileValue, that other miles bloggers write about, and that people share information about on sources like, I would say, Reddit is probably the best one.
Andrew Chen 35:45
Are there particular subreddits you recommend?
Sarah Page Maxwell 35:49
Churning is a good one for people that want advice about credit card strategies as far as, like I was talking about before, applying and opening cards in a calculated way that will more likely grant you approvals and more cards and bonuses over time and not hurt your credit score, because we don’t want to do that.
And let me just say a small disclaimer while I have the opportunity. People don’t get into this game if you can’t pay your credit card bills every month. This game is not meant for you.
And no shame on you whatsoever. I do not judge. But this hobby is for people who can pay their bills every month, because if you don’t, then the fees and interest that you pay will far outweigh the value that you’re getting from your rewards.
Andrew Chen 36:42
All right. Noted.
So, flexible currency programs. One other thing I wanted to ask is some programs like Chase’s program, they have a portal directly on their website where you could redeem there.
You could redeem for flights. You could redeem for an iPad or whatever.
And I was curious. What are some of the tradeoffs that somebody should think about when deciding whether to transfer flexible points out to partner airlines versus redeeming directly in the issuer’s own portal?
Are there situations where redeeming in the portal actually makes more sense? And what’s the best way to think about that?
Sarah Page Maxwell 37:22
Yes. Sometimes there are situations in which redeeming through the portal is going to make more sense.
I honestly think that is only going to be the case if you’re redeeming from the Ultimate Rewards portal from the Chase Sapphire Reserve Card because they offer 1.5 cents.
It’s going to come down to math. But just as a generality, to make things easier, I will say, if you don’t have that card, I wouldn’t even bother looking at the portal if you’re actually concerned with maximizing your miles.
But it comes back down to the situation I was talking about earlier of figuring out first how many points you’re going to spend through the portal, looking that up. Easy search. Point A to Point B.
And then you need to find out how many miles you could spend, which transfer partner you’re going to use the least amount of miles with for that same flight that you want.
Compare which one you’re going to spend less points with, and transfer that way accordingly.
The times when it will be worth booking through the portal are going to be most likely for domestic economy flights because those are the cheap flights. That being said, what you really need to consider is the potential value of your points in this situation.
Going back to the example I was speaking of earlier, you find a flight that is $70.
Using United miles, it costs 12,500 miles. It’s a one-way economy flight across the U.S. Well, it’s probably not $70 to get across the U.S., but let’s say $70 gets you across four states. And it only costs 8000 points through the travel portal.
So if someone just looked at that without thinking about the potential value of your points, then you would say, “Oh, hey, let’s use my points through the travel portal. 8000 points is way less than 12,500. Great.”
And that’s nice to have that option, for sure. I think it’s great.
But what you need to consider is you could save those 8000 points and really get more like a two-cent per point value if you wait and spend them on that trip to China that you’ve been wanting to take, or to Europe where you’re going to be able to use 30,000 of your points, or let’s say 70,000 or 60,000 to get to Europe in business.
And that flight costs so much money. And it’s also just the value of the experience.
And if your cash flow isn’t a problem, which I assume it’s probably not if you’re the kind of person who was even considering this as a hobby, then don’t spend your points on cheap domestic economy flights.
I’m not going to lie. I’ve done it. We all do it sometimes because it seems free.
But think about the opportunity cost of doing that.
Andrew Chen 41:04
Yeah. That’s really great advice.
Sarah Page Maxwell 41:06
That’s the way I think about it.
Andrew Chen 41:09
When you transfer out flexible points to a partner, are there any tips or strategies that folks should be aware of?
Certainly the time it takes for the points to post is something that you should be paying a lot of attention to, precisely to save the heartache and frustration that you were explaining earlier.
Are there any other things that folks should keep in mind?
Sarah Page Maxwell 41:36
Transfer bonuses is a big thing.
What I mean by that is, occasionally, and with some programs, it’s even regularly, periodically, programs will offer an incentive to transfer Membership Rewards to, for example, British Airways Avios.
And this is a good example because this is a regular one that happens every year. And it’s happened every year for the last five or six years and definitely for the last three years. It happens in the last six months of the year where they’ll give you 40% more miles if you transfer during this certain period of time.
And they’ll announce it. They’ll publicize it and say, “If you transfer your Membership Rewards between now and a month from now, you’ll get 40% more points.”
And you can spend less of your points overall. You’re getting much higher, in the end, cents per mile value. So that’s great.
Andrew Chen 42:43
Is the credit card company underwriting that or is BA underwriting that?
Sarah Page Maxwell 42:48
It depends. Sometimes it’s coming from the loyalty program. Sometimes it’s coming from the credit card company. Sometimes it’s, I think, coming from both or some sort of mutual agreement.
But they’re nice to pay attention to because, especially the ones that have more of a schedule to their transfer bonuses, they’ll do it during a certain time of year or annually.
And especially if you can be flexible with your travel and have a little patience and wait to transfer your points at that time, then you’re going to save a lot.
And I also have blog posts about this very thing that have recorded all the last transfer bonuses from Ultimate Rewards to all their partners, Membership Rewards to all their partners, ThankYou points, etc. And the regularity with which they happen, when they happen, how much the percentage bonus was.
But by far, Membership Rewards, I’m pretty sure, offers the most transfer bonuses.
And I’ll just go ahead and say, too: In general, I think these days, the Membership Rewards transfer partners are the most valuable. They have more of them than Ultimate Rewards.
Sorry, I’m digressing from your question a little bit, but I think it’s a good opportunity to touch on this.
Ultimate Rewards recently have lost some key partners like Korean Air. And Membership Rewards has a solid list. And they have some really great foreign programs that offer some really amazing sweet spots.
That being said, Amex cards are a little bit harder to earn points through if you are just like me and try to earn a lot of your points by collecting a lot of bonuses because that doesn’t seem to be their marketing scheme.
They do have some big bonuses and they will occasionally offer, for example, on the Amex Platinum Card, they’ll offer 100,000 points for the Amex Platinum Personal Card and whatnot.
But it’s easier to earn big batches of points through Ultimate Rewards.
But anyways, I think for the long term, for people who just want to spend on one or two cards and are really interested in maximizing their miles, I think Membership Rewards is the way to go for the future.
But one last thing I’ll say about that is that if you’re really trying to get into this game and churn credit cards and maximize your potential bonuses you can earn over time, start with the Chase cards before anything else.
I don’t care what kind of traveler you are, where you live, where you want to travel to. This is actually the easiest and most simple direct advice I can give to people starting off that aren’t afraid of opening credit cards in numbers.
Start with the Chase cards because Chase caught on to all of us way before any of the other banks did. And they are the strictest with approvals.
So once you’ve opened five personal credit cards from any bank, not just Chase, they will stop approving you for their offers for their cards. And they have a lot of lucrative travel cards and a lot of lucrative bonus offers.
So from that perspective to maximize, start with five Chase cards. Business cards don’t count. And that’s what’s called a 5/24 count in our lingo, so you don’t have to count the business cards in that amount.
But start with the Chase cards.
And I have a series of posts that directs beginners on that too, on MileValue. Just don’t forget that because you can leave a lot of value on the table if you just start applying willy-nilly and don’t start with the Chase cards.
Andrew Chen 47:02
All right. Good tip. Are there efficient ways for folks to stay up-to-date or stay informed: you were mentioning earlier, there are still these opportunities for outsized rewards, but you probably have to dig a little deeper, work a little harder, because you’re going to have to basically be doing hops across different partner airlines.
Are there efficient ways to stay informed about these redemption arbitrage opportunities and inefficiencies that arise? Which I guess is because these airlines are not constantly all talking to each other every day, so these pockets of inefficiency can arise.
How can folks stay abreast of where those inefficiencies arise?
Sarah Page Maxwell 47:47
I don’t want to sound so much of a self-promotion, but it’s honestly true. And I don’t just mean follow me. Follow me and follow various miles bloggers because we all have different niches and different voices and personal incentives, which I personally think is a really big drive behind all of our writing.
We all have newsletters that go out either every day or whenever there’s new content published. Subscribe to our newsletters.
Follow us on Twitter, which tends to be the primary space for miles and points news.
And I mentioned Reddit earlier. I think Reddit is a huge source of information for following these sweet spots and changes in the programs. They close one loophole and we find another.
When I say we, I don’t just mean bloggers. I mean the whole community of writers, readers, all the travel hackers. And Reddit is a big place where we talk about it.
It used to be FlyerTalk. That was the big space. It’s an old school kind of forum.
People still post there, and you can check FlyerTalk certainly. I think it should be noted as a source. But I really think that a lot of that conversation has been moved to Reddit.
And my last thing I’ll mention is pointsbuzz.com, which is basically just a website that lists a lot of the top travel bloggers, miles and points bloggers specifically. And it just has their running list of their most recently published, last 10 posts. So you can just skim the headlines from everyone and choose the ones that look interesting to you.
Andrew Chen 49:47
Sarah Page Maxwell 49:49
Andrew Chen 49:49
Okay, cool. Are there any other best practices or strategies that folks should know about when it comes to maximizing point redemptions, whether it’s seasonality or day of week or lead time or whatever it is?
Sarah Page Maxwell 50:06
Something to really acknowledge is miles aren’t going to be really usually that useful during peak travel times.
So if you’re wanting to get max value out of your miles, don’t expect to get the max value out of your miles flying your family of four to Australia in business class at Christmas. It’s not going to happen.
It might happen. I shouldn’t say it’s not going to happen. It might be a needle in a haystack sort of situation, but avoid peak travel times if you can.
And I get it. People are bound to holidays because of children, when they get time off school.
You need to book out as far as possible. So start looking at award space options as soon as they release the space or as soon as it starts appearing on their websites.
Typically, 11 months is the average, I would say. You can’t look any further ahead than that. But start looking.
And you can also just, if you’re really concerned with booking on peak travel days, look at your program that you’re trying to book with and see. The award space is released 11-12 months out.
And then set something in your calendar so that you go to look at that point, 11 months before your travel date, and say, “Okay, this is when I’m starting the investigation.” And that’s when you start keeping a pulse on it.
What were the other points you just brought up? Let’s see.
Andrew Chen 52:00
I was just curious in general. Are there other best practices that you would suggest?
Sarah Page Maxwell 52:11
I think that pretty much sums it up. Actually, there is one more thing.
Especially with first class and sometimes with business class too, but I would say especially with first class, there are airlines that will release extra seats a week or two within the travel date. So that’s only going to work for people who are really flexible.
And I get that someone wants to fly to Japan in first class. They don’t want to wait until a week or two before. They’ve been saving all their miles and this is a big deal, and to leave it to that much chance is terrifying.
But sometimes that’s the name of the game. If you really want that seat, then maybe you need to wait.
Andrew Chen 53:03
Got it. By the way, what’s generally considered good redemption value in your view?
Sarah Page Maxwell 53:10
It really depends. I try to give valuations for every loyalty program. I’m actually in the process of going through and redoing all mine at the moment.
But for the legacy carriers, United, American, and Delta, it varies between 1.2 or 1.3 and 1.6 or 1.7 cents per mile.
Foreign programs often get a higher value than that. Transferable points also get their own values because they have the added value of the option to transfer to all these different programs.
So for example, I value Ultimate Rewards around two cents per point. But I think probably more realistic is 1.8 cents per point or something like that.
And then Membership Rewards is very similar. ThankYou points is a little bit lower than that.
But it also just depends on the options you have to redeem. So again, if you have something like the Sapphire Reserve’s portal and you can get 1.5 cents, then that’s a different story.
But I would say ranging between 1.3 and 2 cents.
Andrew Chen 54:47
All right. Well, thank you so much for taking the time to share your thoughts with us, Sarah. This is incredibly helpful.
Where can people find out more about you and your work and what you’re up to?
Sarah Page Maxwell 54:56
My website blog is milevalue.com. We have a Twitter account @milevalue, a Facebook page for MileValue.
We are a blog in essence, but I also have a team of amazing award bookers who will help you maximize your miles. They’re experts, so it takes them way less time than you, and they can spend less of your miles than you would doing it. So it’s really a win-win.
So that’s more on the redemption side of things, how we can help.
On the front end, the earning side, is where I come in. And I offer credit card consultations. For a small fee over email and for a slightly larger fee over the phone, I offer both.
And then there’s the blog content which is there for you to learn and do it all on your own if you want. You don’t have to pay for our services, but our services are there for you if you feel like being lazy.
Andrew Chen 56:05
All right. Awesome. Well, we’ll link to all that stuff in the show notes, and I look forward to sharing all your wisdom with folks on the podcast.
Thank you so much again for taking the time to chat with us.
Sarah Page Maxwell 56:14
Thank you so much for having me, Andrew. I really enjoyed our time today.