Have Miles, Will Travel

(Photo Details:  Used frequent flyer miles to get two of my BFF's and me to New York--Business Class!)

For those of you who love to travel and want to find ways to save money doing it—this post is for you.  Today’s lesson is how to work the flight mileage award plans.  You don’t need to spend more money to get more miles, you just need to spend smarter.

For Beginners

You will need to start with a small investment—in a credit card that earns airline miles.  Ours costs $100 per year.  We charge everything--and I mean everything--we buy.  That means groceries, gas, clothing, home repairs, dining out, concerts, movies, haircuts, and contributions to charities.  No charge is too small—we’ll even charge a cup of coffee at Starbucks.  I mean if I actually liked Starbucks coffee--I’m using Starbucks as a metaphor for coffee here.   Basically, this driver does not carry cash.  Well I do, but a 20-dollar bill can usually live in my purse for six months without being touched. 

But it’s not just when you’re out and about—all of our bills with the exception of property taxes (which would charge an extra fee for a credit card charge—a big no-no in the working-the-mileage-deals lesson) go automatically each month to our credit card.  This is a double benefit.  The last thing I want to spend my time doing is writing a bunch of checks each month for the cable, phone, gas and electric, health insurance premium (a big one!), auto insurance, and homeowner’s insurance.  I’ve got places to go, people to see, piano to practice.  So all the bills are on autopilot and the miles just pile up in my mileage account with no effort whatsoever.  Even the payment to pay off the credit card each month happens automatically out of our checking account.

Intermediate Level

Ok, now to supercharge that:  You must read the offers that your credit card company and mileage club send you.  Or if you’re lucky, like me, you have a husband that reads all that stuff.  A husband like this comes in really handy.  If he cooks too--even better.  I digress.

Which brings me to our additional investment:  $100 for a second card--here’s where it starts to get complicated.  We earn double miles for dining and travel on one card and double miles for grocery, gas, and home-improvements on the other card.  Just by remembering which is which, you earn double miles.  Double miles for stuff you were buying anyway.  It almost feels like the miracle of compound interest, I mean if you could earn interest anymore.

We bought solar panels last year.  Not only does that save us money on electricity every month, the purchase alone earned us a free airline trip.  Don’t forget to use your double-miles-for-home-improvement card!

Honestly, I don’t know why people even use cash these days when you’re just passing up free travel.  I mean unless you hate free travel, then I get it.

Ok, with what we’ve covered so far, you should have earned at least four round-trip, coach tickets from SFO to JFK from your $200 investment.  Or if you’re flush with miles and want to stretch out a bit, two business class trips.

But wait, that’s not all!

Advanced Techniques

First, don’t forget to tell anyone who cares, what your mileage number is.  There are plenty of places that give you mileage points in addition to the charge that you put on your credit card.  Hotels, rental car agencies, and of course airlines that you actually purchase flights through.  If you really pay attention, you earn a few points for a stay at that hotel, plus some points for the actual charge, and if you used the right card, you earned double miles for that charge.  See how that works?

You will find some surprising companies care about your mileage plan.  When we took out a mortgage to purchase our home, we received American Airlines points for one-third of the amount of our loan.  When we refinanced several months later, we got some miles again.  I was able to fly two of my girlfriends out to New York with me on those miles—in business class!

Really Advanced Strategies

Remember all that stuff I said you had to read now from your mileage club?   You will get offers to open other credit cards.  Cards that you have no intention of keeping.  You want those too if they have no annual charge the first year, which most of them offer.  Just remember to cancel them before your year is up.

When we receive an offer to open an account for one of these cards that will give us a bonus just for opening the account and using the card a few times, we get two—one for Doug and one for me.  We have earned 270,000 miles that way over the last few years.  Not from the charges, just for opening the accounts. 

We also moved money back and forth to some brokerage accounts and earned another 200,000 miles.   That one felt really great since I’m practically earning no interest on cash anyway these days.  I’m earning free flights instead.  

I recently opened a checking account that I will close after receiving two direct deposits—that will earn us another 30,000 miles.  If you’re keeping track, that’s 500,000 miles that did not cost us a single dime. 

Miles in action

We don’t usually use our miles for shorter trips—unless the cost is unusually high for that trip.  Normally when we fly to Las Vegas or Los Angeles, we just pay (on our credit card and earn the double miles, plus the mileage for traveling.)  Occasionally we will book a package deal (last year’s trip to Hawaii) where the airline fare is so discounted it doesn’t make sense to use up our mileage.  Plus you still earn the miles for the actual flight.

Since I retired six years ago, we have used miles for:

            Ten round-trip business class tickets to New York,

            Two round-trip coach tickets to Sydney, Australia,

            Two round-trip coach tickets to Montreal, Canada,

            Two round-trip coach tickets to Honolulu,

            Two round-trip coach tickets to Maui,

            Two round-trip coach tickets to the Big Island of Hawaii,

            Five round-trip coach tickets to Las Vegas,

            Six round-trip coach tickets to Los Angeles,

            Two round-trip coach tickets to Seattle,

            One one-way coach ticket to Portland,

            Two round-trip business class tickets to Bangkok, Thailand, and

            Two one-way coach tickets from Hanoi, Vietnam to Koh Samui, Thailand.

I don’t remember exactly how much each of those individual flights would have cost back then, but looking online today, those would total over $50,000--although I never would have paid for business class if I had been paying for the tickets with actual money. 

Between that and the free lodging we receive using home-exchange for travel, you can see how we’re able to get out of town as much as we do without breaking the bank.

Of course if you hate to travel, this is certainly not worth the effort.  But for those of us with more time than money that do love to travel, that’s quite a return on your nominal annual investment and time.

Related Posts:

            The Full-Time Job of Retirement Travel

            How to Juice Up Your Retirement Returns

            Traveling in Retirement (or Champagne Taste on a Beer Budget)

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Comments

[retireby40]

A bunch of my bills don't accept credit cards. Maybe that changed, though. I need to call and check with them. We charge less than $10,000 on our card so it's not racking up much miles. What's your favorite card? I got turn down when I applied recently because I don't have a W2 now...

[Retired Syd]

RB40: I wouldn't really call any card my "favorite." It doesn't really matter to me. I've used United's, American Airlines' and Southwest's cards. Whichever one is offering me the most mileage for my buck!

[retiredkathie]

I'm wondering what brokerage companies participated in offers - where you moved money. Maybe I'm not seeing offers in the online newsletters!

[Retired Syd]

retiredkathie: Fidelity had a deal for United Mileage--there may be others for different airlines. And you could keep doing it every 6 months (although I think they changed it to 9 months now.)

[Rick]

One nice thing about the SW Rapid Rewards is that the mileage is freely transferable. Thus, a few years back we got 7 individual cards for 7 family members and achieved 350,000 miles, which we used primarily to bring our kids back home from time to time. Round trips were about 20,000 miles each, so we got about 17 round trips. At that time the cards had no annual fee; now they are being offered at $99 per card (and you get the miles by charging $2k within three months).

[Retired Syd]

Rick: That sounds like something we would do--7 cards for 7 family members, excellent! Plus Southwest gives you free drink coupons when you book a rapid rewards trip.

[Cindi]

Well, you know Syd, I was at first very skeptical of this. Not of you, but of the practice. So I did some reading up on racking up travel miles (from other blogs) and I have changed my mind. I suppose now that my own DH is retired and we do have more time, I may reconsider.
Live and learn.
I travel a lot back and forth to Florida but just book the least expensive flight and that's it. This time, I joined their frequent flier rewards program and found out by booking the flight myself, online, I got 6 times the points. That turned out to be a lot of points, which already made small discounts available (drinks, hotels etc.)
DH and I started talking about this and I asked him if he had anything on his Travel Bucket List. He does.
Then, as our luck has it, he got this offer in the mail that after I read the fine print (I'm the Doug of our family) within six months he'd earn over 50,000 points which could qualify him for a free airline ticket to any of the 48 continuous states. And that's only if we just charged our monthly bills to it.
OK. I stand corrected. I apologize. This IS a good deal. We're going to try it and it's something new for me to learn and be good at!
Thanks for sharing and explaining the travel system to your readers.
PS: if you ever want to stay at our Hudson Valley home, you are most welcome. Come and discover another part of NY. (only 1.5 hrs from NYC anyway @$22 RT by train)

[Retired Syd]

Cindi: Looks like maybe you've got some (free!) travel ahead--good for you! What's on his bucket list by the way?

And thanks for the sweet offer! We did take the train up that direction last year (to Poughkeepsie) and explored Saugerties, and Woodstock. What a beautiful area you live in!

[Cindi]

Syd,
Thanks. We love it here.
DH wants to go to Cotswold in England where they film 'Doc Martin' and to also visit more of the English countryside. We did the London thing already, plus visited Oxford and Windsor Castle (where we attended a brilliant game of cricket). Points will help with this goal.
For me, the only thing left I want to see from my Bucket List is the Grand Canyon. Other than that, travel between New York and Florida suits me just fine.
But I can do with another cup of British tea!

[Linda Vaughn]

I.Love.This.Blog!!! I just wish it were a book so I could thumb through it.

[Retired Syd]

Linda: I. Love. That. Encouragement!!!! Thanks!

[savvy]

I've done this a lot too. The only issue I've encountered is meeting the spend level on my primary CC (associated with the airline I fly most) so that I can maintain elite status.

That said, I recently started looking into services such as Evolve money that allow you to fund with prepaid debit cards and pay bills that don't directly accept credit cards. The only issue that that you generally pay a fee for the debit cards (around $4.95 each) but since I'm getting the miles for less than 1 cent each, it's worth it.

[dude]

I tend to book the majority of my travel through Travelocity, and so got their Amex Rewards card. Be sure to check your statements to make sure you are getting the points you are supposed to get! I am supposed to get 3 points for every dollar I spend on Travelocity bookings, and yet two flights I purchased with the card only got 1-for-1 points. It took a series of e-mails and calls to get this straightened out!

[Retired Syd]

Savvy: I'm going to have to look into that Evolve prepaid debit card. That would be worth it for a big bill like property taxes! Also I'll have to make sure the county assessor doesn't charge for debit cards either.

[savvy]

Syd - You can buy any prepaid debit card then use that via the Evolve website to make payments. However, right now, Evolve seems to have a somewhat limited list of payers. For example, they have my local power company but do not have my mortgage company. Also, there is a limit (I think $1000) to how much you can pay at one time and per day. They are sending a check to the payer and getting the money from you via (prepaid) debit card so there is no fee involved.

Check out their website to see if your county is listed as a payer. It's www.evolvemoney.com

[Lynn]

My husband and I play the same points game, but instead of travel, I have used my mileage points to make purchases: So far I've bought - a Kitchen-aid stand mixer, two flat screen televisions, two iPod Nanos, a Cuisinart food processor, two Galaxy S3 phones and A Galaxy Note 10.1 tablet! Might have to start doing more traveling with my points!

[Retired Syd]

Lynn: Thanks for sharing that. See it's worth it even for people that don't want to use it for travel!