(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.
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.
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!
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.
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