Getting Started: Points and Miles 101

In this episode of the Lazy Budget Travel Tips podcast, host Genni Franklin breaks down the fundamentals of points, miles, and loyalty programs. 

She explains what points and miles are, how they function as a form of currency in loyalty programs, and the different types of points travelers can earn. 

The episode also covers the difference between flexible and non-flexible points, and how to best utilize travel rewards credit cards. 

Genni emphasizes the importance of understanding these basics to make the most out of budget travel strategies. 

Listeners will gain the foundational knowledge needed to confidently use points and miles to make their trips more affordable. 

 Timestamps: 

00:00 Introduction to Points and Miles

00:58 Understanding Points and Miles

03:10 Earning Points and Miles

07:09 Flexible vs Non-Flexible Points

08:13 Flexible Points: Examples and Benefits

12:11 Non-Flexible Points: Examples and Limitations

16:17 Key Takeaways and Conclusion 

Transcript

Episode 2 - Getting Started: Points and Miles 101
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[00:00:00] 

Welcome back to the Lazy Budget Travel Tips podcast. I'm your host Genni Franklin, and in today's episode, we are breaking down the basics of points, miles, and loyalty programs. We'll be talking about what points of miles really are and how they work, and what types of points of miles you should be earning and why.

I truly believe that points and miles and loyalty programs are the foundation of a great budget travel strategy. Whether you're using points, cash, or a little bit of both, that's why we're starting with the basics today of points and miles. Specifically, I wanna make sure that you understand the fundamentals so you can feel confident using points and miles to make your trip easier and more affordable.

So let's get started.

First off, [00:01:00] what exactly are points and miles? You've probably heard of points and miles, but do you really know what they are? So here's the thing, people throw these terms around all the time, but what they don't realize is that points are just another form of currency or money points, miles, travel, rewards.

It's all the same thing. It's just the money or currency of loyalty programs. Loyalty programs are a way for companies, whether airlines, hotels, or rental car companies say, thank you for your business. These companies figured out that if they gave us rewards for our repeat business, we keep coming back pretty smart, right?

So

take Starbucks, for example. Just think about how loyal you are to Starbucks or Dunking Donuts when you want coffee. You may not wanna go to that mom and pop coffee [00:02:00] shop because they won't give you the stars towards a free coffee or free food.

I mean, really think about it. If there was no such thing as a Starbucks loyalty program or Starbucks stars, would you go as often? Probably not. Right? And that's the power of loyalty. So airlines and hotels started rewarding their loyalty members with points and miles, which again, are terms I'm going to be using interchangeably because they're essentially the same thing.

And travel rewards as well, all the same thing. It's just that airlines and hotels like to get cute with their currencies. Like Southwest calls theirs rapid rewards points. Delta calls their sky miles, and Marriott calls theirs bonvoy points. But at the end of the day, these are just different forms of currency and you can use them to pay for flights, hotels, or use them for other perks within [00:03:00] those specific programs, and we'll dive deeper into airline alliances and partnerships and future episodes.

But that's the basic idea. 

so how do you earn points to redeem for flights and hotels? Well, traditionally, to earn enough points for a free flight or hotel stay, you'd have to be a frequent traveler. Or spend a ton of money. I remember my dad always wanting to fly on Delta or American because he had the most points and the highest status with those airlines.

He didn't wanna spread his loyalty around because the more loyal you are to a brand. The more perks you get. See what they did there. But then airlines and hotels started partnering with credit card companies. So instead of only earning points by flying on an airplane or staying in a hotel, you could earn points from everyday spending if you use the right credit [00:04:00] card.

And this is when things start to get really interesting. And when travel rewards credit cards were born, people started to figure out that you don't need to be a frequent traveler to have a travel reward credit card, and you don't need to spend a million dollars to earn a million points. And this is why people go nuts about applying for travel awards, credit cards, but.

Slow down. Yes. Credit cards are powerful, but many people apply for them without knowing the key fundamentals, like understanding their credit score or the value of the points that they're earning.

I hear from people in my Lazy Budget Travel Tips Facebook group all the time who have applied for credit cards without knowing how to use their points or if they're even. Worth anything. And then they end up very frustrated when they go to use their points, and it's really hard to redeem them because the redemption rates are just [00:05:00] astronomical.

And that's something that we really want to avoid here. So on this podcast, I'm gonna teach you how to understand the value of travel rewards and how to use them so that you can earn as many points as possible and use them effectively. So let's talk about the importance of the types of points you earn, because not all points are created equal.

And yes, this is super important, especially if you wanna take a more laid back or lazy approach to all of this. Not all points and miles are created equal. A hundred thousand points in one program is not gonna be worth the same as a hundred thousand points in another.

Just like one US dollar isn't the same as one Canadian dollar points and miles. Are like real world currency. So think of [00:06:00] loyalty programs as countries. Each program Delta, sky Miles, Marriott, Bonvoy, Southwest, rapid Rewards, Hilton Honors, whichever, whichever program you can think of. They're all different countries with their own type of currency.

And yes, some programs even team up to SharePoints, just like the European Union. All uses the Euro, therefore, they all have their own type of currency, and because of that, they all have different values. So we're not gonna go deep into calculating cents per point and all that stuff in this episode, but that's something we'll talk about a little bit in future episodes.

It's not really something that you wanna focus on. But for now, we're gonna focus on earning before we even think about redeeming, because, well, you can't redeem points that you don't have, right? So [00:07:00] let's not get ahead of ourselves. Let's focus on actually getting the points, because the type of points that I want you to earn, you'll definitely be able to use.

So what are the two different types of points? Well, there's flexible and non flexible. Flexible points are points that can be transferred and converted into different loyalty programs. So think of it as going to an ATM abroad and converting your US dollars into the local currency. Flexible points give you the ability to change your points into the currency of other loyalty programs.

And non flexible points are gonna be more limited. So these points are gonna be usually tied down to one specific loyalty program. So for example, if you have a co-branded American Airlines card, you're earning American Airlines miles that can only be used on the American Airlines website. Now that doesn't mean that's.[00:08:00] 

Bad, but if you're looking for more options, flexible points are gonna give you way more flexibility. So let's get into some specifics, some examples. So how can you earn flexible points? Well, you can earn these flexible points by getting credit cards like Citi, Wells Fargo, and many others out there. So we'll use the example of the Citi Strata Premier credit card, which is a travel rewards credit card that will earn you flexible points that can be transferred and converted into other loyalty program currencies.

For example, one of their travel transfer partners is Virgin Atlantic Airlines. If you have 60,000 points with Citi, which they call their currency thank you points, then you can convert that 60,000 points at a 1:1 ratio into Virgin [00:09:00] Atlantic points.

Meaning let's say you're going to an ATM and you got your Citi Strata Points. You got your card. This isn't a real thing, but just imagine you're going to the ATM and you have your Citi strata card, and you're like, okay, on the list of travel transfer partners is Virgin Atlantic. I know that if I have 60,000 points, I can just put in my card into this magical ATM, choose Virgin Atlantic and it's gonna give me back 60,000 points.

The Virgin Atlantic program, which means then I can book flights using those points on the Virgin Atlantic website. Like I said, that was an example. You can't, there isn't really an ATM that you can go to to do that, but just to give you more of a visual to help you kind of understand. Essentially what you're doing when you are transferring points, and this is something that we're gonna go [00:10:00] into way more in depth in later episodes, but I just kind of wanted to give you an idea.

But what's great about the flexible currency that you earn with the Citi Strata Premier is that Virgin Atlantic isn't gonna be your only option. That's just one example because there's a long list of really great partners that the Citi Strata Premier has. When you go to redeem your thank you points, they have other partners like JetBlue or Wyndham Hotels, but there's also another option for using those flexible points that you earn with that Citi Strata Premier Card or any credit card that earns flexible points.

And that is booking through something called the Bank Portal. The bank travel portal. And in this case we'll be talking about Citi's Travel portal where you can book flights, hotels, and book [00:11:00] other things like car rentals or activities,

and we'll go deeper into booking with travel portals, whether or not you should do it in a later episode. But basically, I love earning flexible points because they're gonna give you so many options when you're finally ready to redeem those precious points so you can feel confident that you'll be able to use points for a decent redemption.

And it's really, really helpful to be able to just. Focus on earning that type of currency because when you add in trying to figure out how you're gonna redeem points that you don't have, it just kind of gets. Complicated and all jumbled. So focusing on one type and flexible points, being that type is a really good idea.

And as I mentioned earlier, there's definitely a lot of other credit cards out there that earn flexible points. I'm just using the Citi [00:12:00] Strata premier as an example, but I have a list of a bunch of other credit card options in the show notes, so you'll definitely want to check that out.

Okay, so let's talk about non flexible points. Non flexible points are gonna be the types of points that you earn with co-branded credit cards and co-branded credit cards are when companies, banks, credit card companies like Citi will then partner with other. Brands because they know that people may not recognize Citibank or Wells Fargo or whatever credit card company,

but they will recognize brands that they already love and are already loyal to, like Delta, American, Marriott, Hilton, whatever. And these airlines and hotels have their own loyalty program currencies. So these airlines [00:13:00] and hotels will then partner with these banks and credit card companies and create their own credit card products. So instead of earning like Citi thank you points like you did with the Citi Strata Premier, you would be earning points with that specific brand like American Airlines or whatever the partnership is. And again, we call these non flexible. Points because they're specific to one program.

Unlike with the flexible points that you were earning with the Citi Strata Premier, the Citi thank you points, which you could use in multiple programs in multiple ways.

And some people get confused about this because they'll look at their American Airlines credit card and they see that it says Citi on it, and they think, oh, okay, well since this is from Citibank, that means that I may be earning Citi thank you points. 'cause this is a Citibank card. But [00:14:00] that's not the case.

Citibank is just facilitating. That credit card for you, they've partnered with American Airlines, so you will always only be earning American Airlines. And it's the same with hotel currencies too. They have like, for instance, Marriott Bonvoy credit cards out there. Which other banks and credit card companies are facilitating those for you. But if you're using those credit cards, you're only gonna be earning Marriott Bonvoy points to be used within that program.

So is this a bad thing? Well, no, not necessarily. I know there's going to be so many people out there who are like, no, I love my Delta Sky Miles credit card. Don't tell me that it's not the best credit card. And I'm not saying that. I'm just saying it's really. Best if you're gonna take this type of approach, this more laid back, lazy approach to focus on flexible points, [00:15:00] currencies that can be used in multiple programs and in multiple ways.

Now, if you have a Delta Sky Miles credit card, I love that. For you, is it the best option, maybe for you, and maybe it was at that time, but is it the best option for. Other people out there trying to take a more laid back approach? Maybe not

because for example, if you are only putting spend on that Delta Sky Miles credit card, you are severely limiting your options. And to be honest, it's not the easiest to find decent redemptions with delta sky miles. So you may be left very frustrated when you want to redeem your points because the amount of points you would need for a trip could be astronomically high and then you just end up never using your points or you.

Take years and years and years to save up enough [00:16:00] points to be able to use them. And that's not, that's just not what I want for you. I want you to get the most out of your everyday spending, and you shouldn't need hundreds of thousands of points for one flight or one night at a hotel. All right, so we covered a lot today.

So let's quickly recap some key takeaways. Points of miles are just another form of currency that you earn through loyalty programs, points, miles, travel, reward, it's all the same thing, so call it points. Say you're earning miles, it doesn't matter. They all mean the same thing. And remember, not all points and miles are created equal.

Some offer more value than others, so we want to choose wisely and flexible points are a great option because they'll give you [00:17:00] more flexibility and a ton more opportunities. When you go to redeem them, they can be transferred to multiple loyalty programs

and non flexible points are gonna be a lot more limited because they're tied to a specific program and can restrict your choices. Am I saying they're bad? No, I am not. There are. Many different programs out there. Some are just easier to use than others. And then also, remember, you don't wanna rush into credit card applications without understanding the basics. Understanding how Points and Miles work is just as important as understanding your credit score and the value of the rewards you are earning. And remember, it doesn't have to be complicated

starting with the basics is really gonna help not make this complicated in the long run [00:18:00] because you don't really need to be an expert to make the most out of your points and miles. It's all about understanding the fundamentals, taking it step by step, and finding a strategy that works best for you.

Well, I hope you loved this episode and it gave you the confidence to continue this budget travel journey. And remember, keep it simple, keep it fun, and keep exploring. Make sure to subscribe and leave a review and I'll see you in the next episode.