The history of the modern frequent flier programs dates back to 1979 when Texas International Airlines created a program to track mileage to give rewards to its members. In the next few years, other airlines followed with their programs. The concept was simple, you would earn miles for the miles that you flew. You could then cash in those miles at certain intervals for free flights. Fast forward a few decades and an internet community sprung up where people would share tips to “hack” the system to gain free travel much faster than airlines anticipated. For example, travel hackers would take cheap, long distance flights just to earn miles. This would not only help earn free flights but it would help people earn elite status. Eventually the airlines caught on. Several years ago, almost all of the airlines changed this to focus more on dollar spent instead of miles flown. As a result, the term miles really became synonymous with points.
The history of travel points dates back to 1991 when American Express introduced its Membership Rewards program originally called Membership Miles. Although there were other rewards programs prior to this, Membership Miles really paved the way for modern credit card reward programs. Again, the concept is simple: you earn points for money you spend on your credit card and then you can cash in those points for various rewards or you can transfer them to partners.
Now there are several different programs with their own points currency such as Chase, Capital One, Citi, etc. Hotel programs also have their own points programs such as World of Hyatt and Marriott Bonvoy. Today, the points and miles industry is huge and very, very profitable. It might not make sense to some people for companies to give away so much free stuff but for various reasons, it makes them a lot of money. In order to keep things simple, we are not going to get into the economics of that here. However, the average consumer is likely much more profitable than the average travel hacker.
So whether you call them miles or points, it doesn’t matter. What matters is understanding all of the different rewards currency and how much they are worth. We’ll get into that in another post.