What to know about airlines miles, reward points and frequent flyer programs? – words Al Woods
Earlier we have told you how to make long flights comfortable for the whole family, and here you will get to know how you can benefit from various reward programs of the airlines if you are a frequent traveller.
The frequent flyer miles or also known as airline miles or reward points has been considered the Holy Grail for travellers who want to know as many as possible ways to travel free or without the need to pay a fortune on air tickets.
As many of you will know, as a result of the volatile oil prices and the restrictions of the routes, dramatically change the value of the tickets, even from one day to another the fare on the same route can increase or decrease many times its cost. For that reason, the utopian idea of getting free plane tickets has gained strength.
If you plan to join a frequent flyer program or gather miles with a credit card but do not precisely know what it is, we have explained it thoroughly below.
What are airline miles?
Airline miles, reward points or frequent flyer programs, are a system created by airlines and/or credit card companies to achieve customer loyalty.
This type of programs were born in the aviation boom in the 60’s when the competition of the airlines in the United States was growing. Although in those years, if certain rewards were given such as travelling in first class without paying an extra charge or the entry to exclusive lounges at airports, it was not until the late 1970s and early 80’s when it reached its peak thanks to the agreements with credit cards. The first serious loyalty program for frequent flyers was the already famous AAdvantage of American Airlines, and since then virtually all airlines have replicated this model.
Today there are many ‘frequent flyer programs’, and each has its terms and conditions. However, most of them have similar features.
How do they work?
Before explaining how they work, we must clarify that kilometres and/or miles do not equal the actual unit of measurement. In reality, they are just ‘points’ equivalent to a particular type of purchase or trip.
For example, a flight from New York to Los Angeles (2,500 real miles) can give you 15,000 miles (of the frequent flyer program) if you travel in economy class. However, if you travel in business class or first class, the point count can double. There are also promotions of the type “if you buy in ‘x’ shop, you will increase your points. We’ll explain ‘how to get miles’ more thoroughly below.
The accumulated miles can be exchanged for a variety of prizes:
- Free tickets
- Up-grades (that is, buy a ticket in economy class and use the miles to travel in executive or first)
- Part of payment of a ticket
- Give away tickets to third parties
- Hotel accommodation
- Magazine subscriptions
- Car rental
- Other services or buying merchandise
In a way, they are equal to the benefit programs of any credit card company, although one of the advantages here is that the miles usually never expire.
Do they really work?
Without a doubt, this is one of the most frequent questions related to the subject.
Do they really work or are they just a scam to get into debt with credit cards? The answer is yes, they work. As we mentioned in previous paragraphs, this type of programs rewards customers for their loyalty. Even the airlines and credit card companies compete with each other to offer the best rewards.
However, we must not forget to read and analyse the terms and conditions of each. Also, remember that many airlines have formed alliances and specific programs of one airline enable you to redeem points in any of the member airlines of the alliance.
What is the difference between ‘frequent flyer programs’ and credit card points or rewards?
It is a common question among people interested in joining an FFP or getting a particular credit card. There are three types of programs.
1. Loyalty program of the airline
All airlines offer frequent flyer programs. You can register for free from their website, and each trip will give you a certain number of miles (the number will depend on the trips you make). It is not necessary that you use a particular credit card, although the benefits are multiplied if you use cards that have an agreement with the airline.
Another advantage, specifically in companies that are a member of an ‘alliance’ such as SkyTeam, Oneworld, Star Alliance, etc. is that you can accumulate the points and redeem the benefits with different member airlines and not just one.
2. Credit card rewards program
Compared to loyalty programs of airlines, here the points are obtained every time you purchase with your credit card, apart from the benefits you can apply to practically any airline (especially if it is a big credit card company).
3. Credit cards with agreements
It can be said that this program is a mixture of the previous two. When you buy one of these cards, they give you a certain amount of courtesy miles (in most cases, equivalent to a single trip at a national level at no cost), and each time you use any of these cards in any purchase, you will automatically be credited miles to your frequent flyer account. Another advantage in some of them is the possibility of entering exclusive lounges of the airline at no cost and priority check-in.
What type of reward program is best for me?
If you are a person who travels a lot, there is no doubt that your best option will be frequent flyer programs. You can get many benefits without the need to have a specific credit card, something your pocket and credit history will appreciate.
If you use your credit card a lot and also travel regularly, credit cards with agreements with airlines are an excellent alternative because you will multiply the benefits when travelling without the need to spend more.
If you are a newbie and you want to learn more about the points and miles, the best ones for you will be the credit cards that offer reward points or cards with agreements with low or no yearly fees. If you enter this category, do not forget that when using a credit card, you are prone to get into debt if you do not have a good financial education.
How to accumulate miles?
The traditional method to accumulate miles is frequentlyflying (hence the name of ‘frequent flyer program’). According to the number of flights you make, the higher the benefits and points. For example, in American Airlines with the Sapphire category, every time you buy a ticket, you automatically upgrade to first class, and you will continue to accumulate points.
Meanwhile, the easiest way to earn miles and points is with credit card affiliate programs. They give you points every time you buy (of any kind, not necessarily airline tickets). Although the type of rewards and the number of points usually vary according to the company, you typically get one point or mile for every dollar spent.
Check the promotions of the credit card
Many times you double the points if you buy from certain shops or websites.
Another popular option, especially for frequent business travellers, is to buy the miles directly. In general, airlines offer this alternative for those who want to exchange them for some of the benefits but still do not have the necessary number of points. Commonly the price per 1,000 miles is about $15 (approximately), and they are purchased directly from the airline.
There are also alternative methods to get points, such as completing surveys or registering in bulletins via email. One of the most famous examples is e-rewards.
Things that you should take into account
Remember to pay your credit card on time – It is true that the rewards are attractive in these frequent flyer programs; however, the interests are also very high.
Check the different programs before registering – Nowadays there are many programs to travel, thus examine which one best suits your needs.
Be patient – Although when you sign up for a credit card, it is likely that you get a bonus with many points, really the real benefits you start to see until the second year.
Only spend if you have the money to pay – Most people believe that the cards are an extension of their money. However, it is best to see them as if they were a different way of using your cash. Many financial education specialists mention that it is advisable to spend up to 60% of your real income; so you will not get into debt.
You do not need to be enrolled in different plans, as one will be enough – Many think that the more programs and cards you are affiliated with, the greater the rewards. However, if you enrol yourself in a single plan or credit card, it is more than enough.