Sunday, April 14, 2013

Earning and Using Frequent Flyer Miles - Part 5

Earning Frequent Flyer Miles

This week, we will finally discuss earning frequent flyer miles.  There are many ways to earn frequent flyer miles and some are more complicated than others.  We will go in order from most simple to most complicated.  

Note: This is not in order of most lucrative because I don't think most people want to play that game
more than every once in a while, but scroll down to credit card bonuses if you interested or curious.

Earning Miles through Flights

The easiest way to earn miles is to sign up for frequent flyer programs.  Make sure to give your frequent flyer number when you fly and collect the miles.  Otherwise, you could be leaving thousands of miles on the table.

  • For example, this past Summer I flew from JFK to Tel Aviv via Istambul on Turkish Airlines.  I earned 11,440 United Airlines miles for the roundtrip ticket for both myself and my wife.
    • Considering that a roundtrip flight to Israel on Star Alliance partners is 80,000 United miles, I am essentially getting a free ticket after 7 fights (80,000/11,440 = 7.02).  If you don't sign up for the program, you just forfeit those miles.

Earning Miles through Regular Credit Card Usage

Just about every airline has their own credit card.  For example, here is the United, US Airways, and JetBlue credit cards.  Many airlines even have multiple cards, like the American Airlines Visa, American Airlines Mastercard and American Airlines American Express and the many Delta American Express credit cards (All the cards on this page are non-affiliate links)

Airline credit cards have many perks for when you are flying, but I don't use them for regular spending.  Airline cards almost all have annual fees and usually earn one mile for every dollar spent. They often come with perks like free checked bags and airlines lounges that can make up for the annual fee, but only if you use them enough.

Instead, go with the Starwoods credit card from American Express.  You get the same 1 point for every dollar except that for every 20,000 Starpoints, you will get 25,000 miles into the program you transfer to.  Here is a list of transfer partners.  If you have a American Airlines card, you can only earn American Airlines points.  With a Starwoods card, you can be earning United, American, US Airways or Delta points depending on how you want to transfer your points.  Keep in mind that for United, you will only get 1 mile for every 2 starpoints.  Big bummer.

  • Personally, I would rather earn 2% cashback minimum for every transaction through my Fidelity American Express.  Then, I can use that money to buy a flight without any blackouts and earn miles on the flight (flights booked with miles do not earn miles).
    • Let's do the math - If I spend $64,000 on my Starwoods at 1.25 miles per dollar I will have 80,000 miles, enough for a roundtrip to Israel on US Airways, which will almost definitely be with a stopover and I have to flexible in when I can fly.
    • If I spend $64,000 on my Fidelity Amex, I will have $1,280 in my Fidelity account to spend a flight which will almost definitely be enough for a direct flight (probably not enough during high season), with money left over for a non-direct flight, and I will get an extra 11,000+ miles, which has a value of at least $150 in my book.  

In addition, Chase Ultimate Rewards points can transfer into United Airlines miles with certain credit cards.  You can earn 5% on rotating categories through the Chase Freedom card and earn 5 points per dollar at office supply stores with the Chase Ink Bold card and transfer the points to United.

Earning Miles through Shopping Portals

Most Frequent Flyer programs have shopping portals that are similar to Ebates or Top Cashback that give you extra miles if you start your purchase from their site.  

For example, if you are planning to shop at, you can first go to the United shopping portal and click on to and you will get 4 United miles for every $1 you spend.

Earning Miles through Credit Card Sign up Bonuses

This is by far the most lucrative way of earning miles, but it requires discipline, time and organization.
You can spend an entire year spending $20,000 on your Starwoods card, earning 25,000 American Airlines miles or you can sign up for an American Airlines Visa Card, spend $1,000 in the first 3 months and come out with 31,000 American Airlines miles after just $1,000 because of a 30,000 mile sign up bonus and spend the rest of the money on other credit cards.  This is pretty typical of sign up awards.

The more lucrative sign up bonuses tend to have higher annual fees so you will want to cancel your cards before the next annual fee kicks in.  Some cards waive the annual fee for the first year and some do not.  Pay attention to that.

Continuously opening and closing accounts is time consuming and requires a good spreadsheet.  This is not for everyone, but signing up for 1-3 a year isn't particularly difficult and can still be pretty rewarding.

Only take on what you feel comfortable with.  Start slow, see how the system works and only then decide to keep going.

If you haven't already read them, check out Part 1- An Introduction, Part 2 - Finding More Information, Part 3 - Airline Alliances and Part 4 - Booking Flights with Miles