1,075,965 Frequent Flyer Miles (how I got mine & how you can too)

Content adapted from the "Earning Travel Points" chapter in our upcoming ebook, "The Travel Junkie's Field Guide"

By Ben Gelsey

Do you like spreadsheets? Do people consider you organized? What about “gaming the system”? Is that something you consider fun... Or unethical? Do the words “churning” (not butter), “manufactured spending”, “sweet spots” or “ANA RTW in J” mean anything to you? Summed up as an emoji, would you be this one:

🤓

If the above describes you, read on and be prepared to learn how you can leverage your innate talents to travel the world for pennies on the dollar. That’s what I do, and in the 5 years that I’ve been in the points game I’ve saved over $8,375 cash on flights that I redeemed with points instead. Not to mention, today as I write this in 2019 I’ve accumulated a massive war chest of over 1 million frequent flyer miles across various airlines and credit card programs such as:

Airline Miles

  • American
  • United
  • Delta
  • Alaska
  • Southwest
  • British Airways
  • Cathay Pacific’s Asia Miles
  • All Nippon Airways
  • Avianca LifeMiles

Credit Card Points Programs

  • AMEX Membership Rewards
  • Chase Ultimate Rewards
  • Citi ThankYou Points

These are my current point balances, as shown in awardwallet.com, a tool to help you track your points across the myriad frequent flyer programs

The way I calculated $8,375 is by assigning each mile/point redeemed a value of 1 cent. So $8,375 saved is equal to redeeming 837,500 points. Thus, in the last 5 years I have earned approximately 1,913,465 points in total (1,075,965 unredeemed + 837,500 redeemed). When fully redeemed, these points will have saved me close to $20,000 in airfare. Where would you go if you had a spare $20,000 in free airfare?

As for me, my redemptions have included flights to:

  • Bangkok
  • Barcelona
  • Mumbai
  • Las Vegas
  • Seattle
  • San Francisco
  • Tokyo
  • Seoul
  • Jakarta
  • Bali
  • Shenzhen
  • Taipei
  • Omaha
  • Boston
  • Medellin
  • Salt Lake City
  • Los Angeles
  • Hong Kong

… and more. In total those 837,500 points were used for 29 separate flight redemptions, in which I only paid nominal taxes and fees on each ticket.

As good as finding cheap cash fares can be (I do run Flights Machine, after all…) points are very necessary to get good deals in certain situations, specifically:

  1. One-way long-haul international flights
  2. Peak season travel (if you are flexible with your dates)
  3. Business and First class flights

Using points to save on one-way long-haul international flights

As you may have noticed, sometimes one-way flights are much more than 50% of a round-trip flight, unfairly penalizing folks who fall outside of the normal round-trip traveler demographic. Personally, I am a so-called “Digital Nomad”, someone who works online and travels from place-to-place, migrating around the globe without any sort of fixed long term accommodation. For the past few years I’ve been spending my winters and springs in Asia, with my summers and autumns in the United States and South America. As you can imagine, I almost never purchase round-trip airfare and thus I’d be constantly overpaying for flights if it wasn’t for my points stash.

In general, domestic flights and any budget airlines (both domestic and international) will have “fair” pricing (one-way is priced at 50% of a roundtrip). But with classic long haul international carriers they might price a one-way as high as 80% of the price of a round trip! Honestly, it’s ridiculous.

Doing a quick search on Google Flights I just found a good deal for LAX (Los Angeles) to HKG (Hong Kong) for $442 round trip a few weeks from now.

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But… If I simply wanted the outbound leg, AA now tries to charge us $363!

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Highway robbery! 363 is 82% of 442! That’s like paying for a round trip at $726, which is quite a bad deal. As a value-conscious travel-junkie, it would greatly pain me to overpay for a flight like that.

However, if we were to use points we see that the price is 32,500 - 35,000 depending on the season:

At a 1 cent per point valuation, that is equal to paying $325 - $350 for a one-way (or $650 - $700 for a round trip).

So what this tells us is:

  • If you had to buy the one-way, paying with points is decent value (363 / 325 == 1.11 cents per point)
  • If you were planning to travel round-trip anyway, paying with points is not that great value if you could book that awesome cash fare (442 / 650 == 0.68 cents per point)

But that’s not the whole story, as we’ll soon see...

Using points to save on peak season travel

Instead of booking very close to your big international trip (the example itinerary above is less than 3 weeks away) and snagging a super deal, what if you were planning a further ahead and traveling during the peak summer season…

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Looking at flights in June (3 months away), the best deal on AA is now $913 round trip, more than double our great deal of $442! As for one-ways, we can see that the price is now $519, a more reasonable (but still overpriced) 57% of the round-trip price.

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Reanalyzing in this peak travel situation:

  • If you had to buy the one-way, paying with points is great value (519 / 325 == 1.59 cents per point)
  • If you were planning to travel round-trip anyway, paying with points is also great value (913 / 650 == 1.40 cents per point)

So because the AA award flight price is the same amount of points no matter what prices the cash fares are, flying in peak season is great value using points.

Unfortunately there’s a problem… Namely, whether there are actually any award flights available to booked! With cash, you can almost always buy a ticket at some price unless the flight is 100% sold out (or even 110% sold out, since often airlines oversell a flight beyond 100% capacity and hope for no-shows or just plan to bump passengers).

However with award flights, airlines only release a certain small number of seats per-flight. The airline’s goal is to make every flight profitable, so filling a flight with award booking free-loaders rather than revenue customers is bad for business. Thus, on a flight seating 300 people, there might only be 10 award seats that are made available. Whoever snatches them up first gets them. Continuing with our example trip to Hong Kong, it turns out that there are no award seats available for the entire week of June 5th:

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In fact, we have to go all the way up to June 26th until we find an available flight to book, in this case a nice Cathay Pacific flight (which we can book using our American Airlines miles since both are part of the “Oneworld” airline alliance)

Sidenote: There are 3 main airline alliances, Oneworld (includes American Airlines), Star Alliance (includes United) and SkyTeam (includes Delta). Each alliance has many airline partners throughout the world, allowing you to redeem USA airline frequent flyer miles for flights to almost anywhere in the world.

Now, for you savvy readers you may have noticed that the above award searches were done on the British Airways website… Even though we are planning to use American Airlines miles to book a flight between the USA and Hong Kong. Why? That’s all part of the fun of this hobby, as you will learn more in “Booking Award Flights with Points” chapter :)

So, in summary, as long as you are flexible with your dates, using points to travel during peak periods is a great way to save money and get good value for your points.

In fact, the only way to get better value (think 5 cents, 10 cents or even more per point) is to fly premium cabins, as we will learn about next.

Using points for business and first class flights

As I write this on March 31st, 2019, I am actually midway through an international business class redemption.

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For $51.90 (plus 25,000 Alaska Airlines miles) I am flying business class from New Delhi, India to Tokyo (where I am staying for 28 days on a stopover), then on to Jakarta (the capital of Indonesia), also in business class. These flights have fully lie-flat seats, allowing me to get a good night's sleep, along with gourmet meal service (Japanese wagyu beef, tuna sashimi, free fine champagnes, etc) and the highest level of service provided by the cabin crew.

Flying business class is a pleasure. In fact, points mavens such as myself often deliberately choose the *longest* itinerary that they can when redeeming business class to get to enjoy the experience for as long as possible. If you look online, you’ll see various “trip reports” that have gone viral, such as Sam Huang’s famous 11-city $60,000 Emirates first class award redemption back in 2015. Almost all those cities were layovers (less than 24 hours), not stopovers (greater than 24 hours), so this incredibly circuitous routing was purely to experience more first class flights for the same price.

In my case I was intending to go from New Delhi to Tokyo, but due to Alaska Airlines award routing rules I could tack on an extra flight to anywhere in Asia that Japan Airlines flies for the same price. While I could have gone to Hong Kong, or Seoul (both quite close to Tokyo), instead I opted to go to the furthest destination that Japan Airlines flies, which is Jakarta. If you are the type of person that loads up on crab legs while at a Chinese buffet to get your “money’s worth”, you will understand this mindset 🦀🦀🦀

For my business redemption, as you will see below these flights retail for $6,175 USD when paying cash to Japan Airlines.

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Given I paid $51.90 cash and 25,000 miles, calculating the cost-per-point would be:

  • (6175 - 51.90) / 25000 == 24.44 cents per mile

This is wayyyyyyyy higher than our standard 1 cent per mile, so as we can see the “best” value for points is always redeeming for premium cabins. With that said, calculating this way is a bit disingenuous because I wouldn’t have ever bought this ticket in business class with cash. So $6,175 wasn’t really “saved”, since I would have just booked economy with cash if I had to.

Sidenote: That’s why in my lifetime calculation of $8,375 saved thus far (by redeeming 837,500 points), I always just used 1 cent per point redeemed as my savings since that is what I actually would have paid in reality if I didn’t have any of my miles. While this undercounts my savings for greater-than-1-cent economy redemptions and overcounts my savings for less-than-1-cent economy redemptions, on average it is should mostly even-out and be a slightly conservative estimate.

In conclusion, given the ridiculous cash prices of most business and first class fares, using miles is the only way to make it reasonable to book these tickets. If you have aspirations of luxury-in-the-sky without breaking the bank, points are the way to go.

Ok I’m Convinced, LET’S DO THIS !!!

So far we’ve learned the “Why” and the “What” of earning travel points but not the “How”... The “How” part is what requires you to be organized, responsible, patient and analytical. If you’re not, the points and miles hobby may actually cause you to lose money rather than save. To acquire these points we will be dealing with one of the most dangerous financial instruments known to man, the consumer credit card.

As you will learn in the following chapter, “Churning Credit Cards”, American banks offer incredibly lucrative “sign-up bonuses”, with anywhere from 30,000 to 100,000 miles as a reward for signing up for the card and spending a certain amount of money to prove it’s a legitimate signup. At a 1 cent per point valuation, that’s a value of $300 to $1,000 in bonus miles per card signed up for. As you can imagine, these add up quickly.

Getting back to spreadsheets, to earn my 1,913,465 I signed up for 31 different credit cards over the last 5 years (so approximately 6 per year). However, at this point in time I only actually have 14 open credit cards. That’s because for cards with an annual fee (which is often waived the first year), I cancel them 11 months after opening them once I’ve successfully collected the sign-up bonus miles. For some cards, I’ve subsequently re-opened the card again later on and collected a 2nd sign-up bonus for the same card. That is why this hobby is called “churning”, because you churn through cards repeatedly to collect more and more sign-up bonuses.

If this gets your mental alarm bells ringing, GOOD! When it comes to banks and their credit cards, you must always be on your guard for “the catch”, “the fine print”, hidden fees and charges. We’ve all been stung by them before. Churning credit cards is playing with fire. There’s a real chance that you could get burned… But if you act responsibly and take precautions a whole new world of travel opportunities await you.

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