Episode Transcript
Matt: Have you ever heard of compound interest, Travis? In 50 years, that $80 is going to be worth $200.
Bryce: Welcome everyone to episode two of Takeoff, a points and miles podcast by 10xTravel. Bryce Conway here. I'm joined with my friends. I'm going to let you introduce yourselves.
Travis: I'm Travis.
Emily: I'm Emily.
Matt: I'm Matt.
Bryce: We are going to be going through much of the material from our free course in a much lighter, more casual conversational way on today's podcast. The way that we envision you using this is (1) learn the hobby, of course. Great alternative way to pick up on some of the basics, building off the course. (2) Actually, send this to your friends who will tell you, I don't have time to take a course, or I don't want to sit down and read. This is, in a way, the audio version, and probably a much more fun version.
We're going to pull from our own experiences, recent redemptions, and points and miles, just make this more of a conversational way to learn. But do know that everything we're going to talk about today is going to build all of the free material that's on our course. It's entirely free, and anyone is able to access it at 10xtravel.com/course. With that said, everyone ready to get into the fundamentals of the points and miles hobby?
Emily: Let's do it.
Matt: Let's do it.
Travis: Let's do it.
Bryce: Okay, we talked a little bit about this in the last episode. We introduced you to who we are and a little bit about our use of points, travel styles, et cetera. Today's going to go a little bit more toward the technical side of things, trying to teach you the basics of this hobby so that you can start your own journey. Who knows? Maybe someday you have a podcast yourself, where you tell the people about how you've been using points and miles.
Let's start with the very, very basics, the fundamentals of the points and miles hobby. What is it? At least from my perspective, and I'm going to ask around the group here in a moment, there’s three key things to try to optimize for in the points and miles hobby, also called travel hacking. I'm not a huge fan of that term.
Three primary goals, (1) earn as many points in miles as you possibly can. When I say that, I'm referring to value, not actual number of points and miles, because as you're going to hear about later in the podcast, these things are not always the same. (2) Redeem those points in miles as best as you possibly can for your circumstance. Some would say for maximum value, but that's not necessarily the case because there are ways you can redeem for maximum value and travel in places that you have no desire to go. I would just say, redeem them in a way that works best for you.
(3) Do both of those things, one and two, without otherwise compromising your financial life. Don't spend more money. You can go out and earn a million points by spending a million dollars on a credit card, but probably not the best idea. You want this to fit throughout the rest of your financial life, not having any other negative outcomes or consequences from those three things.
Earn as many points in miles as you possibly can, redeem them in a way that's best for you, and do all this without otherwise jeopardizing your financial life. Did I get that right? Anything else that you would tell people, the happy hour?
Emily: I think you nailed it.
Bryce: Awesome. Fantastic. Let's talk about earning points here. That's group number one. There's quite a few ways that you can do this. But by far, the most common one, the easiest one, and the one's going to earn you the most points and miles the fastest, is by using credit cards.
This is the thing that scares most people away from our hobby. When you say, hey, I'm really into credit cards, most people are going to look at you like, whoa, what's wrong with you? Have you absolutely destroyed your financial life? What would Dave Ramsey say if he heard you say that? But credit cards are a key component of what we do here.
In particular, credit card bonuses are what make up the bulk of our points earnings. The reason for that is really just math. If you look at most credit card bonuses out there, they might have 50,000 points, 70,000 points, upwards of 150,000, sometimes 200,000 points and more, generally just for signing up for the card and spending a set amount of money in the first usually about three months called a minimum spend requirement.
If you compare the numbers that you earn from opening a card, hitting the minimum spend, earning that bonus, they are drastically more than you earn from just ongoing spend or really any other type of earning activity of which we're going to cover quite a few of them here. But credit cards are the bulk of it. We're going to dedicate time to many ways to earning points, but I want to make sure that we set that baseline first. We're going to talk an equal amount of time about flying, doing shopping portals and stuff, and credit cards, but do know that the bulk of this builds off of credit cards.
To talk about one in particular like the go-to starter card in this hobby is the Chase Sapphire Preferred. I would venture to guess that 95% or more people who are starting out in points and miles, that's the first step. That's the obvious step, opening that card, earning the bonus.
I think there's a certain percentage of people who come into the hobby and they overthink that first step. At least to me, that's a no brainer. I want to ask the group here. You've seen a lot of other people come into the hobby and overthink that first step. What's the first thing you tell someone when they're eyeing their first card? And what sorts of reactions do you get?
Emily: I think it's easy to say that the Chase Sapphire Preferred is just such a great starter card. It's got a pretty low annual fee for the value that you get out of it. Whenever anyone asks me that, it's just a real quick like this is the winter.
Matt: Annual fees are such a hurdle for people that are just diving into this. They're coming in with a preconceived notion that, no, I don't want any annual fees. That's one hurdle we have to cross. That way, the Sapphire Preferred is a nice entry point into understanding how flexible currencies and some of the stuff work for $95.
Travis: There are plenty of great cards out there. When I'm talking to people and recommending a first card, a lot of times, people will start name-dropping cards like the Capital One Venture Card, which is a good card, but they spend a lot of money marketing that card. That's why it comes to mind first for people.
Keeping it simple, going with the Sapphire Preferred is just an almost foolproof way to get started. There's a time later when the Venture Card makes tons of sense for people, but I think pretty much everyone here, the Sapphire Preferred was probably one of, if not everyone here's first card that they got.
Emily: I was going to ask, what was everyone's first card?
Bryce: Southwest card.
Matt: When I was in college, I thought I was investing in my future very strongly. I got the Fidelity credit card, that you can get the 2% cashback as your Roth IRA contribution, and I thought I was just going to be a trillionaire by age 50 because 2% of all my spending was going to go into my Roth IRA. That was my first one.
Travis: My first one was a Citi AAdvantage credit card to earn American Airlines miles. I'll send it back the other way. Who wishes they would have gotten the Sapphire Preferred as their first if they didn't? I know I would have.
Bryce: I'm trying to think if it was even out when I started this hobby. I'm getting a little long in the tooth, as they say.
Matt: My first points and miles card, I consider the Sapphire Preferred. I got the Fidelity when I was in college and then a couple years later, I did get a Capital One Venture Card, but I was just using the cashback, not even statement credits, but just redeeming it for cashback. Once I finally entered the hobby, Sapphire Preferred was my first one.
Emily: Thankfully, I found you guys before I applied for anything dumb.
Bryce: Yes, success story.
Travis: The one with no regrets.
Bryce: Anyway, let's focus real quick on Sapphire Preferred. But just to set the framing of this here, we're going to outline how this card works, why we start with it, and what that process looks like, as an example to show how this can be repeated. We mentioned that credit cards and credit card bonuses are really a huge part of this game. If you're playing the game correctly, if there is even one correctly, you're strategically opening new credit cards on a somewhat regular basis.
When I say that, usually the email or question I get back is, okay, what's the exact cadence? There isn’t. Go at a pace that feels good for you, but there is just simply no faster way in the entire world to earn points and miles than to open new credit cards. Whenever it feels convenient. Earn a bonus. Let's walk quickly through the math as to why that is.
Looking at the Sapphire Preferred in particular, the one that we're all talking about here, and I don't mean to turn this into a Chase commercial, but that card generally offered bonus historically in the range of 60,000-80,000, occasionally up to 100,000 points after you spend $4000 in the first three months, which is referred to as the minimum spending requirement. Just looking at the math of that, think about if you have your current credit card or debit card, whatever you have in slot number one in your wallet, how much benefit or how much value you're going to get out of the next $4000 you spend on that card? I guess if you're math in college, who was the most financially responsible college student in the world, it sounds like, what was that? You said 2% back?
If you spent $4000 on a car that earns 2%, effectively cashback, which is actually a pretty good earning rate, that's $80. Not bad, right? $80 is good. No one's going to walk past out on the street and not pick it up. But if we look at Sapphire, the value of that we're going to talk about in a bit. But most would consider Chase points to be worth somewhere in the range of at least 1.25¢ each upwards of about 2¢ of points.
If you get 60,000 bonus points for spending $4000, that's going to be somewhere in the range of mid $700 up to $1200 or more of value. Comparing that to the $80, for those of you who are watching here on video, I'm holding up my hands during this. You have the little tiny $80 benefit that you get from spending $4000. Whereas on Sapphire Preferred, those points would be upwards of $1200. There's no comparison or whatsoever.
I find many times it helps to reframe the signup bonuses as if it's a limited time spending opportunity. A lot of people, their eyes glaze over you and say, oh, you're in at 60,000 points after you spend $400, and that doesn't hit. But if you say, hey, you're going to earn 12x points per dollar spent on the next $4000 you spend this card, their eyes will open up like whoa. That totally changes things. That's how I encourage you to view credit card bonuses, to view how those fit into the total scheme of earning points. Again, those are the biggest piece here.
Let's talk real quick about that Sapphire bonus. Let's talk about what each of us would use that for. I guess I'll generally ask and answer in the order that you like. How would you redeem 60,000-80,000 Chase ultimate rewards?
Travis: If I had recently earned it, I would focus on keeping it somewhere close in terms of my trip. The reason for that is because I feel like getting that first trip booked is usually one of the hardest things for people to do. That's when you really see the value in points and miles.
With one bonus from the Sapphire Preferred, you could go down to Costa Rica, a really popular destination. Hyatt has a property down there called the Andaz, Papagayo. I haven't been yet. I might be going later this year, but it gets fantastic reviews from everyone who goes there. With the bonus from the Sapphire Preferred, you could easily do a long weekend, three or four nights, potentially with flights depending on how much flights cost and what tier of the bonus you got.
Bryce: Excellent choice. Emily and Matt, how about you?
Emily: I would use it to take a trip I'm actually taking this year. I found it through Flying Blue. I booked an Air France flight from Denver to Paris for 15,000 points per person, an economy. Round trip, it's 30,000 points per person. There’s two of us, there's your 60,000 points, and now you're in Europe.
Matt: Now you're getting way more than $600, $700, $800 out of that signup bonus for just those two flights alone.
Emily: Yeah. I think it was over $1000 round trip for one ticket. I feel pretty good about that one.
Matt: That's pretty good. If you know me, this is no surprise. I'm going to one place and one place only, and that's Turks and Caicos. Emily and I are taking a little bit more intermediate redemption strategy with our options to where we transfer Chase points to a partner. You'll learn about that in upcoming episodes. It's not that complicated, but it is a little bit more difficult of a concept to learn initially. But then once you get the hang of it, it's not bad.
I live in North Carolina. You can fly from Charlotte to Turks and Caicos on American Airlines. They charge anywhere from 12,500 miles up to 50,000, 60,000, or 70,000 miles one way just depending on time of year, which is absurd. Cash prices are usually $700 or $800 round trip per person. I'm going to transfer 11,000 points over from Chase to British Airways to book those same exact seats.
I can only book them when they're priced at under 15,000 miles per person each way for this particular redemption. But either way, I'm going to get a ton of value. That's three round trip tickets, essentially, from that one signup bonus, potentially for depending on where it nets out.
Bryce: For me, I'm going to follow Emily's lead. You mentioned something or a booking that I've actually done myself recently. I did transfer 72,500 Chase off and reward points to Emirates. I booked a one way business class flight on the way home, so from Milan to JFK. I'm taking the family to Europe this summer.
That business class flight, Milan, JFK, you can go either way. You actually can get it for as little as 90,000 points round trip. You've probably seen pictures of this flight before. It's the one that has an actual bar and lounge in the plane, a little tiny horseshoe shaped bar. Everything's gold and ornate.
I'm going to be there with a family of five. We have enough points to do all of us flying home. It would be for roughly one Chase Sapphire bonus per person. We'll talk about later how you can play this game with other people, but that's what I would do. Cash price to book, that's generally in the range of $3000-$6000 per ticket. Again, it's from one bonus.
I want to take a moment to just zoom back out because I think a lot of you who are listening to this are probably relatively new to points and miles. Here we are, 15 minutes into our podcast talking about, all right, here's how you transfer this to an airline that you may or may not have even heard of and book this on the same flight. The key takeaway here is one credit card signup bonus can do all of these things, incredible value from just one. Points and miles have value. Earning them through credit card bonuses allows you to take trips like this over and over again.
Matt: I think this also drives home the point very quickly for you, especially new listeners that you didn't hear any of us talk about redeeming the points via, in this case, the Chase travel portal or cashback like statement credits or anything like that. It shows you that those aren't the best redemptions, probably 90% some odd of the time.
While it may sound intimidating, learning how to utilize them, which will guide you via Transfer Partners and more. It's what most people probably think of as an advanced technique and strategy. It's the best way to do it. At the end of the day, it isn't that difficult.
Travis: I really want to highlight bringing it full circle to Matt's 2% Fidelity card. With that $4000 in spend, he got $80 back in college, which I'm sure felt wonderful when you were in college.
Matt: Have you ever heard of compound interest, Travis? In 50 years, that $80 is going to be worth $200.
Travis: Congratulations, Matt. The point I want to hit home is Bryce talked about how, at a minimum, the points are worth $800-$1200 on the Sapphire Preferred. In each of our examples, which none of these are hard to achieve examples, we're all using those points to actually get even more value than that.
The real power is that the value of the points when we often talk about them is a minimum amount. It's a minimum value that they're worth, but it doesn't mean you can't get more. Matt's $80, it'll get more due to compound interest. But let's say it's just a standard cashback card. The cashback amount you get, that's fixed.
If you get 2% cashback for every dollar you spend, all you're getting is 2¢ for every dollar you spend. You're always getting that fixed amount. But with points and miles, in learning to navigate the ecosystem, you can even get more than the minimum value that you'll often hear us talk about.
Bryce: I think just to zoom way out on that point, one of the first key psychological barriers that people encounter in the points and miles world is you have to feel that points and miles have value. They're currency. To a lot of folks, it's just arbitrary numbers, almost like cryptocurrency or something. Hey, there’s 200,000 of these type of points. That doesn't trigger the same thinking as that. That's money, that's a type of value, but they're really any other type of loyalty currency out there.
They're not directly cash. You generally can't pay your mortgage with points or go to Chipotle and buy something with points. I guess there’s ways you can, but you shouldn't. But they have value, which is why in the last episode, we talked about, what's your one piece of advice for new people into this hobby? Mine was to get to the first redemption as fast as you can because that triggers that feeling of like, oh, this arbitrary number thing in the sky can actually create real world value That's what we're driving home here.
We've talked about the Chase points and how there's lots of different ways you can use them for maximum value. I want to talk about the different types of points and miles that are out there because as we discussed, the first goal of points and miles hobby is to earn as many points and miles as you can, as much value. This is where things get tricky because there are so many different types of points and miles.
We're going to talk about really the three main types of them and talk a little bit about subprograms in each one. It hopefully helps you choose to earn the right type of points to get max value so that you don't end up with $80 in college or $25 in Kohl's Cash.
The first type of points and miles, the most valuable, and the one that we are all constantly chasing, are what are called transferable points. There are four major programs of those. Chase, Chase Ultimate Rewards, American Express, which has membership rewards, Citi ThankYou points, Capital One, they call them miles, which makes a lot of this confusing. These are really the four main transferable points programs.
There are other smaller ones you could call Bilt. Bilt is absolutely a transferable program and harder in their points, so I do not talk about it as much. Marriott, in some ways, you can transfer them to a bunch of airlines and such, but the ratios of the transfers are so bad that you probably shouldn't do that. Marriott is a transferable points program in the same sense that your 401(k) is a checking account. Technically yes, but you shouldn't do that.
We're going to focus on the big four, Amex, Chase Citi, Capital One. With these types of points, they are tied to your actual card or cards if you have multiple with the bank. We talked about the Chase Sapphire Preferred that earns Chase ultimate reward points. You could also open a business card, the Chase Ink Preferred, it earns the same points.
All those points go into the same account per individual. You can generally move points between cards relatively easily, instantly, freely. That just creates this ecosystem, if you will, where you have one or multiple cards earning the same types of points.
Generally speaking, all of these transferable points can be redeemed in multiple ways. First, you can generally get them as cashback, and you shouldn't do that because the value is quite low, often one cent per point or lower. What happens is you might end up taking $500 cashback that could have booked $2500 of travel. But that option is there, so do know that.
Second is that you can generally redeem them through what is often called a travel portal or a travel website. Each of these major banks have their own travel site. It looks just like any other travel site you've ever seen in your life, where you can book just about any flight, hotel, rental car, sometimes cruises and excursions. It's generally going to be at a fixed value per point.
Chase, for example, Chase Ultimate Rewards, it depends on the card. Let's stick with Sapphire Preferred. Fixed value of 1.25¢ per point. That's, again, any flight. If you want to book a flight from New York to JFK, if you want to book a hotel in Indianapolis, if you want to book a rental car in Hawaii, the same value per point gives you the ultimate flexibility because you're not tied to a particular airline or hotel.
There’s some cases when you use that. I'd put it in the group. Have any of you ever redeemed points via a travel portal, and do you have to remember when and why? Travis is raising his hand.
Travis: Yeah, I actually did last year. We went to Indonesia. There was a great discounted business class fare. It was about a $1200 round trip in business class from New York to Jakarta, Indonesia. Booking that through the portal, I couldn't book it for less points with a transfer partner. Going through the portal and that instance definitely made the most sense for me.
Bryce: I once did a portal booking. Hi, I'm Bryce, and I need a portal booking. I've done a few, actually. I think I did a hotel in Disney like some domestic flights. I live in Columbus, Ohio. When I'm flying to New York, it's hard to find great points redemptions, but the cash price is really cheap, so I've done it there.
Generally, it's not something that a lot of points and miles "pros" do because you can get the most value out of these transferable points and miles by going with option number three, which is to transfer them to one of the travel partners of these different programs. These Transfer Partners are going to be airlines and hotels, many of which are going to be brands you're familiar with, but they're going to be different per program.
Chase, for example, can transfer your points one to one for free, generally almost instantly, to about a dozen different airlines and hotels. Notable names would include Southwest, United, Marriott, Hyatt, British Airways, Aer Lingus. I should have these memorized given what I do, but I don't, candidly.
What that effectively allows you to do is it's as if you have a Southwest credit card, a United credit card, a Hyatt credit card, a Marriott credit card, and on and on and on, all smashed together into one single card because any points you earn on that in that transferable points program can become any of those other types of points. It gives you a ton of different flexibility.
We covered this in the course and the analogy that I ultimately settled on. It was one of Uno wildcards. I guess you have to know how to play Uno to understand this, but maybe not. Let's try.
In the game of Uno, there are four different color types of cards. Your goal is to play all of your cards and run out of them. You can only play a card on the same color. They also have numbers on. If I'm holding a red seven, Emily plays the red four, and I could play the red seven. That's great. Problem is what if Emily plays a blue three? You can't play that card. There are situations in which you can't use those.
Transferable points and miles are like wildcards in this analogy. They can become any of a number of different colors. Emily plays a red two. I'm sitting there, I don't have any red cards, but I have a wild card transferable points in this analogy. I can say, hey, I want this to be red, I'm going to play this now. That's how that type of flexibility works.
Just think of it as if there are all these different types of airline and hotel cards smashed into one single card. That's where you're going to get that incredible outsized value that you've heard us all describe at the beginning of this episode, booking those business class flights to Italy, or booking round trip flights on one bonus from Denver to Paris. That comes from the Transfer Partners.
Travis: The only thing I want to add to that is if you're listening to this and you're thinking, wow, that's such a great way, I'm going to go transfer all my points now, put a little pause on that because once you transfer them, you can't transfer them back. It's just like playing that wildcard. You don't want to play that wildcard just because you've got it. You want to wait and do it strategically, when you know it's going to give you the best opportunity to win the game.
Bryce: Emily and Matt, anything else to add about transferable points?
Matt: The Uno example is a great analogy. The only other best one that I could come up with was the currency exchange desks at airports and stuff that you see all over the place, except those are where you go to exchange it for a really bad deal. It's basically the opposite of those same services, except in most cases, a really good exchange that you'll feel good about.
Bryce: The bottom line of transfer points is they give you both flexibility and the ability to book any travel through their portal, as well as the upside of specific airline and hotel miles and also, I guess, cashback. They do it all. There's very rarely a situation with transferable points where like, wow, I'd like to use my points for that. I literally can't. That's what makes them so great.
For visualizing this or for watching this on your favorite video streaming platform, I always think of transferable points as being at the top, like, up high on top of a hill. Pick your favorite visualization. They can transfer down to airline and hotel miles, which is the next two we're going to talk about. These are your conventional frequent flyer miles. If you have your friend who used to travel for work, who's bragging about having a million miles with United, that's what they're talking about, airline specific miles.
The upside of these miles, of course, is they can be redeemed for travel. The downside is that they're generally going to be tied to a particular airline or hotel. If you have a bunch of United miles, and you want to book a flight on United that's reasonably priced mileage wise, that's fantastic. You can do that.
If you have a million United miles and you want to go with Travis on his trip to the Andaz, Papagayo in Costa Rica, Hyatt property, you can't do that, or at least not in a way that you'd ever want to do. That's the downside of airline and hotel specific miles points. They're tied to a particular brand. They have much more limited functionality in terms of what you can redeem them for.
Taking that back to a card standpoint, if you have a credit card that earns airline or hotel miles, and generally almost always, it's going to have the name of an airline hotel on it. You have the Hyatt credit card, you have the United credit card, Southwest credit card. You are earning that type of limited points and miles. That doesn't do nearly as much as a transferable point, especially when there are transferable points that can transfer to the miles that you're earning.
Chase points transfer to Southwest. Why would you ever use a Southwest card and earn Southwest miles, when you can earn Chase points and it's the same thing? This is somewhat difficult to explain on a podcast type format, so I would encourage you to go through the course. I'm seeing smiles around here.
I guess the bottom line thing to know. Airline and hotel points are generally tied to that brand or that brand's partners, which gives you limited ability to redeem them. It makes them a little bit less valuable, less desirable in our mind, but that doesn't mean that you shouldn't earn them at all. If you're doing points and miles right, you're going to be earning all different types. You're going to have transferable points, you're going to have hotel points, you're going to have airline points. The important thing is just to keep in mind which ones are the most valuable.
If you're given the choice to earn a roughly equivalent amount of transferable points with American Express or Hilton points, transferable points are going to be the better one almost every single time. On that same note, if you or someone that you love is using an airline or hotel credit card, if it's their go-to card and I put all my spending on this, they are almost certainly missing out on value because of that choice. Transferable points are better, both are fantastic.
Let's talk about similar credit card offers, comparing them, and showing you why there might be such a dramatic difference in these. Again, to quickly zoom out and refocus here, we're talking about that goal number one. You want to earn as many points and miles as possible. We're walking you through how those points and miles can be different in different values and why not all points and miles are quite what they seem.
The analogy that we often make at 10xTravel is that you want to think about different points and miles as if they're different types of international currencies. Most people get this. If I say, hey, Matt, I have 10,000 pesos, you have $10,000, those are the same value. Most people pause a bit, no, not even close. That can go in comparing any different type of international currency.
For some reason, when it comes to points and miles, people just default and assume that they're all the same value. If I say 100,000 Hilton points compared to 100,000 Chase ultimate reward points, those are not even close to the same value. We're going to go through around here and give some specific examples of cards that cause people to fall for that trap. But when we're zooming out, we're earning as many points and miles as possible.
We're focusing on getting as much value out of those as we possibly can. Doing that requires that you know that points and miles are very different values from one to the next and just understanding how and why that works. In order to do that, let's talk about some credit card offers that you see folks often jump at that might not be as good as they initially seem.
Emily: I think one of the most common examples of people just jumping at a credit card offer because it's a high point value is the Delta cards. Right now, I think they have a pretty historically low offer. But typically, they will be higher. It will be 100,000 points, and that makes people go nuts. You have to think about what that value can actually get you.
If you run a sample search on the Delta website to see how much it's going to cost you for a flight from New York to Paris, you might find that it's going to cost you more points than the signup bonus is even offering, in which case you're not going to get the same value that you might add of 60,000 or 80,000 Chase ultimate rewards points, even if the Delta card is offering 100,000 Delta SkyMiles.
Bryce: Great choice. Definitely one of those common ones we see people ask about, particularly beginners. Travis, how about you?
Travis: I'll say that I'm sorry that I'm changing mine because I realized Emily gave the exact same example above that I was thinking of, so I changed my last minute now. All right, this is my go on it. Similarly in that vein of the Delta cards, another popular choice is any of the Marriott cards. I call it Marriott, it's Marriott. You probably heard that in our last episode.
Bryce: Do they serve Moet there?
Travis: Only if you say it correctly. Similarly, the Marriott cards, people tend to be attracted to them. People are very familiar with the brand. Even if you're someone who stays at a Marriott property a lot, they can be a trap just like the Delta cards. Even if the card's offering 100,000 Marriott points, which sounds like a lot, that's not nearly as many as it seems.
I like to redeem my points for properties, hotels, and experiences that I normally wouldn't be able to just afford to pay cash for, which means I'm usually looking towards higher end properties. Marriott has completely gotten rid of their award chart. Now their top end properties often are costing 100,000-150,000 points per night. Whereas by having transferable points, going back to Chase, I could transfer those to Hyatt whose top tier properties generally cost in the 30,000-40,000 points per night range.
The Marriott card might not even be enough points for one night at one of the top tier properties where I would normally stay. Whereas with the transferable points, I could get, sometimes two or three.
Matt: For me, it's similar. The only difference would be the Hilton program. Hilton was the first program a couple of years ago to more or less ditch the award chart and just ramp up across the board, both the redemption costs, but at the same time, their earning rate is higher. It just skewed one way or the other. Marriott is trying as fast as they can to catch up to Hilton, it seems, and they've closed the gap significantly in recent years.
In a similar fashion to what Travis was saying about Marriott, Hilton is the same way. You can get 150,000 points on some of the Hilton cards very regularly for a bonus. That can be good for five or six nights at some of their lowest properties, I think, at the very bottom of their award chart that might be in the 25,000-30,000 points per night range. Nothing glamorous about pretty much all of those, but it can be a necessity depending on your travel.
The higher end properties, the Waldorf-Astoria is some of their properties in the Maldives or other high-end locations can top out. Depending on what rooms you book, they can literally go to a million points per night. On the surface, 150,000, 180,000. I think we might have even seen 200,000, if I remember correctly. It seems like a lot of points, but without having the knowledge of the award chart or flexible schedules, that won't go very far in some instances.
Bryce: Yup. You all mentioned all the cards that I was thinking of too. I'll just speak generally. When you're evaluating card offers like this, you just have to take that one additional half step and ask, what are these actually worth? I think a lot of the mistakes made in choosing the wrong credit cards or the wrong type of points come from just seeing a big number like 150,000 and assuming like, wow, that's a lot. Just take one half step.
Even just google like, what is the value of a Hilton point or a Delta mile? And always be on your guard and aware that the offers that look super appealing, particularly to people who are beginners or not who don't know a lot about credit cards, points and miles, are often not the best ones. The ones that look a little confusing to you because they have names that aren't written on the side of an airplane that pulls by as you're sitting at the airport like American Express membership rewards tend to be amazing.
To give ourselves a quick shout out, we can make this easy for you. We have a page on our website called our Best Cards page. You can click it straight in the nav on our homepage, where we actually rank pretty much every major credit card offer in the world, according to the value that we think the average person would get out of them. When in doubt, you can just go there. Chances are good that the highest rank card on there that you can qualify for is the one that you should get. We will also link that in the show notes as well.
Before we jump to that and leave credit cards behind, we have to answer the elephant in the room, the question that is on most people's minds when they hear us talk about how much we love opening new credit cards, credit score. Who should be doing this? Who shouldn't? Why are people so afraid of credit cards, credit stigma, et cetera. Let's briefly talk about that.
I guess the biggest and the most important thing to know there is that opening new credit cards and using them responsibly does not harm your credit score. It's just objective fact. There's a lot of misinformation that you'll see out there about how your credit score works. You'll hear half truths about, well, if you apply for a new credit card, that will ding your credit score, and therefore that's bad. The half of that truth is true. We'll get into the more depth on this in a later podcast.
On the surface now, topical opening more credit, new credit cards, using them responsibly, is simply not bad for your score. This is just math, and you know that. But that doesn't mean that everyone should go out there and start opening a bunch of credit cards. There are other things to watch out for.
I think I would generally say that this points and miles hobby is good for folks who are really into three buckets or have three attributes about them. The first is that you have good credit. If you've had credit problems in the past or you really have never had any credit history of your own, you're generally not going to be approved for most credit cards that are at least worthwhile at all, so you have to have good credit.
That's something we can help with at 10xTravel. There's a common limiting belief in the points and miles hobby of like, my credit isn't fixable, or this is an aspect of me that just makes this not work for me at all. It's not true. Every single credit situation is fixable. It's often easier than you think. We can help you with that. We have a ton of free materials. Our course covers that as well, but you're going to have to have good credit to make this work.
The second is people with what we would call a solid financial or budgeting foundation. You feel like you have control over the money you're spending. You know about how much you're spending each month. You trust yourself that a credit card is not going to suddenly make you spend a bunch more money. You feel in control of your finances and generally have sound financial habits.
The last one, and this might be the most important one, people without credit card debt. A lot of people have credit card debt. That's totally fine. Lots of reasons why that happens. You got to clean that up first before you do the points and miles hobby. Otherwise, you're risking, potentially losing more value than you're creating as you try to shuffle the idea of new cards and trying to earn points with credit card debt. That's just going to weigh you down.
Take care of that first. I would almost say no exceptions to that. Just wipe that out completely before you get started in the hobby. Anything I missed? Have you seen any other situations where it's like, hey, you should not do points and miles for this reason?
Matt: One of the building on the second one of solid financial budgeting and foundation notes you'd mentioned, Megan and her group has a good line that she says all the time to people. Credit cards are a source of payment, not a method of funds.
This goes along the mindset that I'm not getting into credit cards because I'm going to immediately go into debt, or not understanding the fundamentals of how they work, so pay off the balance every month, when the statement cycle is due, not roll over balances or anything like that. Essentially treat it, in some regards, as it's a debit card, even though it's not. We can get into the nuances of that at a different point. It's a method of payment, not a source of funds.
Bryce: I like that a lot. Again, zooming out, this hobby is for people who generally have good credit. We can help you with that if you don't feel good about your financial situation, understand your finances, and of course, don't have any current credit card debt. We talked about goal number one of points and miles hobby. Earn as many points in miles as you can, knowing that most of those are going to come from credit card bonuses, ongoing credit card spend.
Pay attention to the type of points and miles that you earn because the value of them is dramatically different. You probably want to focus on transferable points and miles first, but there is a time and a place to be earning airline hotel points as well. This doesn't hurt your credit, despite what your friend, financial advisor, grandma, anyone else tells you. That's just objective truth. That is the primary goal of the points and miles hobby.
We're going to talk about other ways to earn points and miles in the future. Of course, we're going to talk about how to redeem them, but that is the basics. Believe it or not, you've reached a knowledge level where you can start earning a bunch of points and miles now. Whether that's through the credit card signup bonuses or other methods, totally up to you.
If any of these sounds like you, tune into the next episode. We're going to break down the many other ways to earn all these various types of points and miles. In the meantime, if you're itching for more points and miles education and content, we've got you covered. Our free course will guide you step by step to getting started in this hobby. It's a great resource for folks who are new to this.
We are also always posting new articles on our website, 10xtravel.com, that can serve as inspiration for your next points and miles trip. If you're looking for other like-minded points in miles enthusiast, make sure to check out our Facebook group, 10xTravel Insiders, where you can learn and interact with over 210,000 other readers.
I'm Bryce Conway. Thank you for joining us on this episode of Takeoff, a points and miles podcast by 10xTravel. We'll talk to you next time.
