Points or miles, which one should you earn?
With so many options in the credit card market to choose from, earning you miles, points, or cash back, how do you pick the right card for your business travel needs? Are all miles and points earning credit cards equal?
Earning points vs earning miles
To begin with it's important to understand the difference between points and miles. They're not equal. Actually, one is quite simply superior to the other. The one can do what the other does, and then some.
Miles are the original travel currency. (In this blog post I'm going to consider the most valuable aspect of redeeming points and miles, that is for air travel. Note that there are other options, though usually not the yielding you a good value.) You earn miles either by credit card spend or by flying, then you redeem those miles for airline tickets via the airline program through which you earned the miles with. That seems great and all, but what if the redemptions that you want are not available through the frequent flyer program with which you have your miles?
Let's put an example: Corey is a business frequent flyer and he has credited his mileage to Delta SkyMiles program, either because he flew Delta or because he flew Delta partners and credited those flights to his Delta account. Corey also opened the Delta SkyMiles Amex card, and between the welcome bonus offer and additional spend, he has amassed a decent chunk of miles. Now Corey has multiple international business trips that he'd like to use miles on. However, upon searching in Delta's website, there's no availability for the desired dates. He then visits United's website and there's business class availability on a nonstop flight to his destination on the desired dates. The problem is his miles are in Delta's frequent flyer program, and he can't move them. With no miles in other airlines' programs he's stuck with a bunch of miles and a long trip in economy.
Where Points come in
American Express, Chase, Citi, and Capital One all have points programs. Different than miles, points are tied to a bank travel program, rather than to an airline, and this is a great thing for us. Bank travel programs are the most versatile tool in your search for premium class award availability because they are transferable points programs. These programs allow you to transfer your points to a number of partners of the bank owning the program. A key feature is that banks are not limited to airlines within the same alliance or partnership, so with one set of points one can essentially book award tickets with airlines across most all major alliances, and other partnerships. If only Corey had points instead of miles, then he could've just transferred his points to where the availability was and book his business class seat.
One downside of points -if it can be called that-, is that you can't earn them by flying. That being said, ever since airlines switched to miles/$ earning structures, flying isn't the best way to earn miles anymore, so this downside is not as impactful as it would have been say 5 years ago.
Pick the one that's right for you
Now that you know that points currency is superior to miles currency, which bank program do you select? Your main options are:
> American Express Membership Rewards
> Chase Ultimate Rewards
> Citi Thank You
> Marriott Rewards
> Capital One Venture and Spark (this is the newest program launching this month!)
All these programs partner with different airline (and hotel) partners. So where you're going to concentrate your earning depends largely on your travel partners. Things to consider, among others:
> Which transferable program allows for the quickest transfers
> Which transferable program transfers to an airline where I find award space to my preferred destinations most easily
> Which transferable program transfers to an airline that charges lower carrier-imposed surcharges on the routes I fly
> Which transferable program has the most partners that benefit me
> Which transferable program has the most ways to earn points
> Which transferable program partners with the most airlines that have a hub in my home base or headquarters
Is your head spinning yet? That's where we come in. We can help you decipher all of this into an actionable plan. Schedule your free consultation with us here, and learn how points can help your business!
You can learn more about me, Ricardo, here.
Still, co-branded (airline and bank) credit cards are still VERY useful. I'll talk about this in an upcoming blog post.