Perhaps the biggest way that we’re cutting down the costs of our trip is by taking advantage of airline frequent flyer miles. We’ve found that a little ingenuity has gone a long way in our quest to hoard hundreds of thousands of miles that could land us anywhere on this big grand earth.
Eric traveled a lot for work over the last five years, so he accrued many frequent flyer miles. I think when we met he was already over the 500k mark. But the majority of these little lovelies has come from churning lots and lots of credit cards and by exploiting the marketing tactics of large banks.
Getting the Miles
There are several ways to accumulate miles. If you sign up for the airlines’ free reward programs, each time you fly they’ll give you one frequent flyer mile for each actual mile that you travel. For example, the point-to-point distance from Denver to Chicago is 888 miles so that’s the number of frequent flyer miles you get each time you take a flight between those two cities.
It takes a long time to accumulate a lot of frequent flyer miles the traditional way (“butt-in-seat miles”) if you don’t fly often. Luckily, you don’t have to! Airlines also have branded credit cards that will give you frequent flyer miles each time you use the card. Most give one mile for each dollar you spend, but some give two or three for each dollar. Finally, there are companies that partner with airlines to give frequent flyer miles when you purchase goods or services from them. For example, if you rent a car from Hertz you can get a mile for each dollar spent on the car rental.
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Perhaps the best way to get a large number of frequent flyer miles quickly and without spending a lot of money is by taking advantage of credit card sign-up bonuses. Many credit cards give huge sign-up bonuses in the form of miles for just signing up and using their card for a short amount of time. You’d be surprised how many companies will try to lure you in with bonuses of up to 50,000 frequent flyer miles, and sometimes even more. Of course, these cards always come with a catch – usually in the form of annual fees, high interest rates, and a minimum spending threshold within the first few months. We pay off our credit cards in full every month, and we usually close the accounts as soon as the bonus miles become available. Otherwise, the credit card companies win. And who likes credit card companies, anyway?
Right now we both have the Chase Sapphire cards (which had 50,000 mile sign-up bonuses) and the Chase United MileagePlus Explorer cards, which we also caught during a 50,000 mile promotion. With just these two cards we got a total of 200,000 frequent flyer miles! That’s enough for both of us to fly first-class anywhere in the world.
Using All Those Miles
Different airlines have different policies for how and when miles can be used. Most of ours are with United Airlines where a round-trip domestic flight costs 25,000 miles, and a trip to Europe costs 60,000. If you’re like us and only need one-way tickets, then most airlines charge only half of those mileage requirements: 12,500 one-way domestically and 30,000 one-way to anywhere in Europe. There’s a mileage schedule available on their website that shows every possible route, so it’s relatively easy to find out how many miles you’d have to part with in order to take a flight.
You aren’t always limited to the airline you have your miles with to redeem them for free flights. Most airlines are part of what is called an airline alliance. The two largest alliances are the Star Alliance and the One World Alliance. United belongs to the Star Alliance which allows us to use our United stash on any of the 27 airlines that belong to that alliance.
Be aware, not all airlines are created equal. Some airlines still charge a hefty fee when redeeming frequent flyer miles. British Airways, for example, charges a fuel surcharge fee that can cost hundreds of dollars in addition to the miles you’re parting with. For this reason we stay far away from airlines that operate this way. Be sure to read the fine print when you start your collection.
Sometimes airfare is so affordable that it’s not worth using miles to fly. In general, you want to try to get at least $0.02 per mile – if the flight costs less than this, you’re better off holding onto them for a later flight. An example would be a flight from Denver to Boston that costs $350. $350/$.02 = 17,500, but for a round trip ticket you’d have to redeem 25,000 miles. In this case, it’s better to spend the money.
How to Find the Best Sign-Up Bonuses
Sign-up bonuses change regularly. Credit cards come and go, but there’s always a good deal to be had. The best resource we’ve found on the latest deals is Million Mile Secrets. But any Google search on sign-up bonuses will yield a fair number of results showing current offers.
Isn’t Your Credit a Mess?
Many people have reservations about applying for too much credit and consequently damaging their rating. Thankfully we have no reason to apply for loans or jobs in the near future, so we aren’t concerned if our scores drop a few points. But truthfully, we haven’t had any problems applying for new cards since we make it a point never to carry a balance or have too many open at one time. Creditors like to see that you have a low credit-to-debt ratio since it proves that you’re a responsible borrower, so sometimes it’s good to keep accounts open without charging to them. (We’ll see how this works when we’re unemployed!).
Did we miss anything? Let us know if you’ve used other methods to collect miles!