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How To Optimize Frequent Flyer Points

I have been a devotee of reward programs since joining the original American Airline frequent flyer program over twenty years ago.  Though it might not say good things about my hectic travel schedule, I have gold or platinum status on multiple airlines, car rental and hotel programs, and am approaching two million mile status on Delta.  I have spent years perfecting the systems to acquire and optimize programs; picking the right reward credit cards, choosing how to transfer miles, and learning the ins and outs to really make the most value of the programs.

Originally my goal was to win free flights and rooms.  However, over the last few years the programs have been made more difficult to utilize and far less worthwhile. Now I use them to primarily make the drudgery of business travel a bit more palatable.  While it is often very difficult or impossible to get a free flight or room, it is sometime possible to get an upgrade.  Also, as the service levels of airlines have diminished, with some actually showing outright hostility towards passengers, higher status can be helpful when the airlines attempt to take advantage of you. Unfortunately between the ridiculous flight security and the airlines’ bad financial situations and corresponding disregard for passengers, business travel is often an enraging contact sport.

So with this all in mind, I have shifted strategies to optimize the value of programs to me.  I spend the extra money to get an American Express Black Card, primarily because it comes with Gold Status on many of the airlines I fly.  This eliminates the need to stress over qualifying for programs, I get easy upgrades, and I will shift miles I acquire to airlines not covered under programs.  For instance, when I fly Delta I have the miles put under my Alaska account (Alaska is the one domestic airline that seems to consistently respect its passengers). I also find Amex to be a good advocate when a dispute arises with an airline.  Instead of using my Amex reward points for frequent flyer miles, I have instead been using them for gift cards at major retailers I frequent.  The goal is to transfer miles at a penny a point or more.  For instance, 50,000 Amex points will get you a $500 gift card at places like Home Depot, Saks, and Banana Republic, which is often a better use of points than for a ticket.

I have also abandoned my airline reward cards for a cash reward card.  I have found the Chase Freedom card to be the best.  You are rebated from 1 to 3% on puchases (which works out to be a better value than the airline cards), and Chase promptly sends you a check.

Overall, while the value of most of the programs has diminished, there are a few that save money and make travel easier.  I estimate that by properly using reward programs I save somewhere between $10,000 – $15,000 per year.

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2 Responses to How To Optimize Frequent Flyer Points

  1. Tim:

    When you have the ability to accumulate the miles the way that you do, reaching the million mile status etc., I can see where your direction with this makes sense – but what about the average Joe?

    There are more than 17 Trillion unused frequent flyer miles in circulation today worth a reported $500 Billion. The make-up of this massive inventory is comprised of consumers who have multiple FF accounts, but not enough miles in either account to get them that free ticket. For them, I believe that the same rules don’t apply. On our site, milehighswap.com, we see evidence of this every day; people swapping miles on one airline for miles on another, each looking to “top-off” their account in order to secure that illusive free ticket.

    I’m just curious; would you offer the same advice to them?

    Thank you for your insight.

    Duke

  2. Bizzy Life Author Avatar Tim says:

    Thanks Duke. Good point. If you accumulate minimal miles you need an entirely different strategy. Your service sounds interesting.

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