Travel Hacking 102 – How to Maximize Your Airline Miles

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Travel hacking through the accumulation of air points is definitely a profitable activity!

I have previously introduced you to the topic of Travel Hacking and explained to you how to get hotel nights for only $12. In this post, we’re going to take it to the next level by exploring how to make the most out of points in order to travel as far as possible and as cheaply as possible. I’ll tell you how to easily get 464,000 points, a minimum value of $4,600! I say ‘minimum’ because when applying these points to travel purchases, that is exactly what you’ll get – 1 cent per point. But it would be crazy to only use these points as credit on your trip because these points can be worth so much more! I’ll also tell you how to get a flight for as little as 4,500 points, which would ‘virtually’ give you 103 flights for your 464,000 points!

American Express’s Reward Program

Introducing American Express Rewards points

American Express partners

You’re probably asking yourself how a credit card company can offer points which can be exchanged for flight tickets. American Express is affiliated with airline companies and hotel chains which offer you a range of possibilities in the use of Rewards points. Notably, the points can be transferred to the following reward programs:

Bonvoy Marriott, a privileged partner

The list may seem short, but note that the Rewards points can be transferred to Bonvoy points. Imagine now that 464,000 Rewards points are equivalent to 556,800 Bonvoy points. These could potentially get you 111 nights in a category 1 hotel. A value of $11,100 when taking a night’s value to be $100.

Let’s now discover how to get Rewards points. Here are the three most interesting credit cards for quickly accumulating points.

The American Express Business Gold credit card

Overview of the card

Please note that credit card benefits are subject to frequent changes. The information presented here does not always reflect the latest changes. I encourage you to do your research diligently before applying to a credit card.

This card is worth gold! The American Express Business Gold allows you to unlock 40,000 Rewards points (with a minimum value of $400) after spending $5,000 during the 3 first months. Refer someone and you’ll get 10,000 points per approved referral. The card costs $250 per year but there’s a periodic promotion waiving the first annual fee. Moreover, collect 2 points per dollar spent on travels and 1 point per dollar elsewhere. Like for the American Express Marriott Bonvoy Business card, you don’t need to own a company in order to get one.

The complementary benefits of the card

Obviously, every good card comes with good insurance benefits:

• Travel accident insurance $100,000;
• Theft and damage to rental cars up to $85,000;
• Flight delay insurance 500$;
• Baggage delay insurance 500$;
• Lost or stolen baggage insurance 500$;
• Hotel burglary insurance 500$;
• Travel emergency assistance.

I won’t list all the benefits linked to the card. However I do find one in particular very useful, which relates to car rental with Hertz. It includes:

• A discount on standard rates;
• An upgrade of one car category when renting more than five days in a row;
• Fee waiver for an additional driver.

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American Express Platinum credit cards

Overview of the cards

Please note that credit card benefits are subject to frequent changes. The information presented here does not always reflect the latest changes. I encourage you to do your research diligently before applying to a credit card.

In real life, platinum isn’t worth more than gold. But for American Express, the opposite is true. The Platinum credit card comes in 2 versions.

The American Express Business Platinum:

• 75,000 points after spending $7,000 during the first 3 months;
• A referral bonus of 15,000 points;
• 1.25 points per dollar spent;
• For an annual cost of $499.

Like the Business Gold, there’s no need to own a company to get it.

The American Express Personal Platinum:

• 60,000 points after spending $5,000 during the first 3 months;
• A referral bonus of 15,000 points;
• 1.25 points per dollar spent;
• For an annual cost of $699.

You’ll be sure to get good service with the Platinum. I received mine by FedEx priority shipping in a nice envelope (see the photo all the way up. And yes, I took the time to fake my card number!).

I hear you say that you prefer to pay your rent with $499 or $699. I didn’t say that Travel Hacking was a free activity and it’s certainly not for everyone, but it’s extremely rewarding! And wait ‘til you see the benefits of both cards!

An annual credit of $200

The differences between these two cards are based on two factors: the bonus points and the travel credit.

The first difference gives Business Platinum the advantage and was mentioned earlier. It ‘only’ costs $499 and offers 75,000 points, with a minimum value of $750, for a net profit of $250. If you refer your spouse, he/she will give you 15,000 additional points, bringing the profit to a minimum of $400.

On the other hand, the Personal Platinum offers $200 per year of credit for your travel expenses. This bring actual cost of the card down to $499. Furthermore, as it also offers you 60,000 points, minimum value of $600, your profit is $100, or $250 with the 15,000 referral bonus points.

Travel insurance

The travel insurance offered by the Platinum cards is even better than that offered by the Gold card:

• Travel emergency medical insurance up to $5 million ;
• Travel accident insurance $500,000;
• Theft and damage to rental cars up to $85,000;
• Flight delay insurance $1000;
• Baggage delay insurance $1000;
• Lost or stolen baggage insurance $1000;
• Hotel burglary insurance $1000;
• Travel assistance in case of emergency;
• Trip interruption insurance;
• Trip cancellation insurance;
• Travel emergency assistance;
• StandbyMD travel medical concierge service.

Some of you would be pleased with only these benefits. But be verrrrrrrrry attentive to what’s coming next!

Unlimited access to airport lounges

Airport lounges are a haven of peace before taking a flight. You can rest, use the Wi-Fi and eat your fill. Some lounges even offer entertainment for children and adults, showers and massages. All meals and drinks, as well as services offered by the lounges, are free.

The Platinum cards offer free and unlimited access to the affiliated lounges, including Plaza Premium, Delta Sky Club, Centurion and Priority Pass, in other words almost all airport lounges in the world no matter what airline or class you’re travelling. In some lounges, your spouse and two kids or a travel companion can have free access to the lounges when they travel with you. The access to the Priority Pass lounges usually costs 32 USD per person. The unlimited access to the Priority Pass lounges usually costs 429 USD per year without a companion, but a companion is offered for free with the Platinum!

If you travel often, you’ll be thrilled to own a Platinum card. More importantly, follow our example and make the most of these lounges to have a satisfying meal before taking a low-cost flight which doesn’t provide food!

Prestigious hotel program memberships

The Platinum card opens many doors to the most beautiful establishments on the planet thanks to the exclusive membership to the following programs:

• Marriott Bonvoy as a Gold Elite member granted to members who have spent 25 nights;
• Fairmont President Club as a Platinum member granted to members who have spent 10 stays;
• Hilton Honors as a Gold member (Personal Platinum only);
• Club Carlson as a Gold Elite member (Personal Platinum only);

I will now dwell specifically on the first two programs, which will be no surprise if you have read my previous post on Travel Hacking 101 where I explained how to easily obtain 282,000 Bonvoy points.

Now let’s dream a little. Imagine – like John Lennon would say – your excitement when you exchange 2,000 Bonvoy points for a room in a Marriott hotel, and the Platinum card then grants you, thanks to the Gold status, an upgrade to a higher category room on arrival, a late departure at 2 pm and a welcome gift.

You can stop dreaming. This is reality for all Platinum card holders!

Car rental program memberships

Apart from the access to airport lounges and hotel upgrades, you’ll also get the benefit of VIP treatment when you rent a car with Hertz and Avis. With Hertz, you’ll get Five Star Hertz Gold Plus Rewards status. With “Five Star”, “Gold”, “Plus” and “Rewards” in the name, it does what it says on the tin! You’ll get special discounts on your future rentals, an upgrade of one car category, a grace period up to four hours to drop off the vehicle, and you’ll avoid the 2-hour queue at the Hertz counter in Paris, which I’ve already had the joy to experience.

The method of accumulating points

An efficient technique that rocks

Now that you’re convinced of the benefits of the Gold and Platinum American Express cards, let’s get to the heart of the matter, that is to say the strategy for obtaining maximum points. If you’ve read the article about Travel Hacking 101, you’ve probably seen this coming! You just need to refer your spouse who refers you back, etc. Here is the table that sums up the process:

Let’s be realistic. With 1.25 point per dollar spent, you would have to spend $371,200 to accumulate 464,000 points without bonuses. Suffice to say that if you spend $37,200 a year on your card, you would need 10 years to accumulate all these points. Some people would take all their life to accumulate that many points.

Effective Referencing

You may ask yourself why the referral bonus is 15,000 points on every line whereas the Gold card only gives 10,000 points? Know that the amount of the referral bonus depends on the referrer and not on the referee. In this way the owner of a card can refer the three other cards. That’s why it’s important to subscribe to one of the Platinum cards first in order to get 15,000 referral points, no matter what card is chosen by the referred person.

The associated cost

OK, it’s true, this technique has a cost. Suppose that you own both Gold cards for free on the first year, both Business Platinum cards will cost $499 each, and both Personal Platinum cards $699 each. To each of the Personal Platinum cards, you can subtract $200 of travel credit. The 6 cards will have cost you 499 x 2 + (699 – 200) x 2 = $1996, as well as $34,000 of expenses. Given that unlike in the United States, the American Express card isn’t accepted everywhere in Canada, there are different techniques to reach the minimum spending amounts, like using Plastiq or PayTM to pay municipal taxes and service bills, or ebates.com to get hold of gift cards from your grocery stores, gas stations and favorite shops that wouldn’t accept your Amex cards otherwise.

Use the points in a profitable way

The profitability goal

Opportunities to spend Rewards points

There are many ways to spend your American Express Rewards points, like:

• Pay for travels on your American Express client portal;
• Trade for merchandise on your American Express client portal;
• Trade for gift cards;
• Apply them on Amazon spending;
• Apply them on travel expenses;
• Transfer them to a hotel chains rewards programs;
• Transfer them to an airline rewards programs.

But be careful! Just because you get these points “for free” doesn’t mean you should spend them wildly! The value of one point can vary a lot. Objectively speaking, forget all the options other than the last two on the list.

Determining profitability goals

To return to the numbers, the 464,000 points that you will obtain will have cost you $1,996, in addition to the $34,000 spending. Now, the profit that you want to take back from this “investment” of $1,996 depends on you. Obviously, if you don’t want to be a loser, your 464,000 points should bring you at least $1,996 back, which is equivalent to 0.43 cents per point.

American Express allows you to apply your points in exchange for your travel expenses (airplane, hotel, car renting, Airbnb, Uber, etc.) for a value of 1 cent per point. This has to be the lowest value for you to aim for. Personally, I fix my profitability goal to a minimum of 2 cents per point.

Transfer to airline rewards programs

The value of points with rewards programs

Transferring to other airline programs is an advantageous solution, provided that you know what you’re doing. The industry of reward programs is extremely complicated and every program has its own specifications and you have to be an expert on the subject to understand all the subtleties of these programs.

Depending on the specific needs that you’ll have, one rewards program can suit you better than another. The value you will be granting to its points will depend on a lot of factors like:

• If you travel short or long distances;
• If you travel frequently or not;
• If you travel locally or internationally;
• If you travel in economy class, business or 1st class;
• Your favourite countries or continents;
• Your favourite airlines;
• If you mind stopovers or not.

The value of one point is, therefore, a relatively subjective concept!

The transfer possibilities

I mentioned in the introduction that the Amex points could be transferred to the following reward programs: Aeroplan, Alitalia MilleMiglia, Asia Miles, British Airways Executive Club (Avios), Delta SkyMiles and Etihad Guest. Among these airline partners, the most profitable probably are Aeroplan and Avios.

With Aeroplan, it may be profitable to trade your points for long distance flights in first class. It’s even possible to make a mini-trip around the world for as little as 90,000 points + a few hundred dollars.

Avios is a good option for short-haul flights without a stopover, in economy class. British Airways is a member of the OneWorld alliance, which includes a dozen of partners including American, Cathay Pacific, Qantas, Air Berlin, JAL, Aer Lingus, Iberia, Malaysia Airlines, Sri Lankan. For you, it means that you’ll be able to trade your Avios for tickets from these companies, and also from partners of British Airways outside the alliance, for example Alaska Airlines.

Personally, given that we will visit a lot of countries during our family trip around the world, I want to get the most flights that I can in economy class with my available points. And Avios is perfectly designed for this.

The Avios reward program

The huge advantage of the reward program offered by British Airways is that it’s based on distances, unlike most of the other programs which are based on geographic areas. It means that short distances will cost you as little as 4,500 Avios. That’s why Avios is extremely appealing for short-haul flights.

The table below sums up Avios exchange rates depending on the distance covered. Note that the prices are set by flight segment. Therefore, a journey with a stopover counts for 2 flights.

An important detail: you can regularly find transfer offers that vary between 20% and 35%. Normally, an Amex point can be traded 1 for 1 in Avios. So, if you transfer 1000 points, you’ll receive 1000 Avios. But with special offers, transferring 1000 points can periodically give you 1,350 Avios! Which potentially gives your 464,000 Amex points an equivalent of 626,400 Avios using a 35% bonus.

Fuel surcharges and other expenses

One important thing to remember is that the points can only be exchanged for the “flight” portion of a plane ticket. Some airlines, such as British Airways, can charge extra ridiculous amounts on fuel surcharges and other fees. It’s therefore recommended to avoid exchanging your points for tickets from these airlines. American Airlines, Cathay Pacific and Malaysian Airlines, for example, charge much lower fees.

On top of this come additional airport fees. For example, it’s unfortunately common knowledge that Canadian airport authorities are greedier than our southern neighbours’. That’s why many Canadians, worried about their savings, cross the border to catch a flight.

Points strategy case study

Using Avios points in Asia and Oceania

Because the flight tickets are very cheap in Europe thanks to the Low-Cost airline companies, I preferred to avoid using my points in Europe. In Asia, there are also a lot of Low-Cost airlines, but the prices don’t seem as economical as in Europe. Building an itinerary in the same way as I did for Europe is likely to be a challenge. That’s why it may be more economical for me to use my points for flights in addition to low-cost tickets. That’s what we are evaluating now.

The OneWorld hub airports

The most important hubs of the OneWorld alliance in this part of the world are Kuala Lumpur (Malaysian Airlines), Hong Kong (Cathay Pacific) and Sydney (Qantas). From these cities, it’s theoretically possible to go anywhere in Asia.

Avios points requirement for different flight segments

Here are my findings, which I will use as a basis for creating my itinerary in Asia and Oceania. This table gives you a glimpse of the possibilities with Avios.

Avios points’ potential is huge at first sight. But are they really that good?

The example: Kuala Lumpur – Phnom Penh

I engaged myself in some little mental gymnastics to calculate the value of an Avios. The concept is simple. Consider the Kuala Lumpur – Phnom Penh flight from Malaysian Airlines as an example. A one-way ticket for this flight can be exchanged for 4500 Avios + 12.32 USD. As the normal minimal price for this flight is 30 USD, we infer that the net value of the 4500 Avios for this flight is 17.68 USD, that is 0.0039 USD per point, or 0.005 CAD per point. Is it profitable? Totally not!

I went a little further in my calculations and searched on Google Flights for the cheapest flight equivalent to one segment cost, and was curious to see whether it was offered by Malaysian Airlines or another airline. It turns out that Air Asia offers this same segment for only 18 USD, that is 12 USD less than Malaysian Airlines! This lowers the value of the Avios to 0.0012 USD. Clearly, if I had to choose between spending 4500 Avios + 12 USD or 0 Avios + 18 USD for this flight segment, I would choose the second option.

Profitability level calculations

I did this exercise to calculate the value of points for all flight segments that we’re likely to take during our trip around the world. The table below describes the situation.

You’ll notice 2 things in this table.

First, an Avios point has a substantially higher value with Cathay than with Malaysian Airlines. For example the Hong-Kong to Taipei flight costing 488 USD, worked out at 9.9 cents per point. On the other hand, this value substantially decreases to 2.07 cents US per point when comparing Cathay with its rival which offers the same flight for 135 USD. In this case, I would choose to use my 4,500 Avios, because the point value is very high, and above all Cathay’s service can’t be compared to that of a Low-Cost airline.

Then, from Sydney to Alice Springs, where the Urulu monolith is located, Qantas offers the cheapest ticket. Of course, my 10,000 Avios and 27.75 USD will be well spent, knowing that a ticket for this trip usually costs at least 173 USD!

As for the rest, I don’t think it’s worth transferring my Rewards points to Avios in Asia and Oceania.

My choices vs my profitability goal

Obviously, you probably won’t get the same value as I do for these flight segments. As my itinerary is flexible, I play with the dates and get the cheapest ticket (usually Low-Cost) to calculate the net value to attribute to the flights. For those who don’t travel the same way as I do, the net value that you’d give to a point would probably be higher because you’d be less flexible. Or you maybe you’d prefer to check in hold luggage. Nevertheless, these calculations could be useful to guide you into determining the value of points for your flights, with your own criteria.

As for me, I prefer to convert my 464,000 Rewards points into 556,000 Bonvoy points. That being said, note that in contrast to a standard versus low-cost flight, I give more value to a 3-4 stars hotel than to a 1 star, especially because I travel with my family and I can get significant advantages in hotels with my American Express Platinum credit card!

As a bonus, this table summarizes my minimum profitability goal for my Rewards points, which I can easily achieve with hotel rooms.

Notice that depending on my strategy, my 464,000 points will get me a minimum value of $7,424. Not bad at all for an initial cost of $1,996 cost, is it?

Conclusion

I have tried to be concise because this could be very complex for a beginner in the art of point redemption. I admit that my experience in the field is still limited but I have conveyed to you the best basis from which to start.

If you want to deepen your knowledge on the subject of travel hacking, I invite you to consult the Milesopedia website which is the recognized reference in Quebec. Feel free to join Milesopedia’s Facebook community which is rich in lessons. Its founder Jean-Maximilien Voisine, as well as his collaborators, will be happy to answer all your questions.

To conclude, I have a new saying for you: “Something is only worth the value you give it”. That’s the mentality that I personally adopt when dealing with numbers, money and with reward points.