Earning points seems easy at first but if you are going to do this right, there is a lot to know. For most airlines, you earn miles based upon how much you spend with bonus miles awarded depending on your status. For example, on United you earn 5x on the base fare which does not include government taxes and surcharges. Thus, that $200 ticket is not going to earn you 1000 miles. If you have status, there is a bonus multiplier. Sticking with our United example, the multiplier starts at 2x for Silver. So if you take a $200 flight on United as a Silver member you’ll earn 7x on the base far. Assuming the base far is $120, you’ll earn 120 x 7 for the flight which is 840 miles. Each airline has their own formula these days but most are no longer based upon miles flown.
Hotel rewards are similar. You earn points based upon how much you spend. We’ll use Hyatt as an example. You’ll earn 5 points per dollar spent but again, that doesn’t include taxes or fees. So if the total hotel bill for one night is $200 and $40 of that is taxes and fees you’ll earn points on $160. In this case it would be 160 x 5. There will usually be an elite status multiplier so with Hyatt, that could be anywhere between 0.5 and 1.5. So if you have elite status that grants you 1x you get 160 x 5 + 160 (this is the 1x). In this example, no status or basic status will award you 800 points but having elite status that grants you 1x will award you 960 points. Some hotel programs such as Hyatt give you even more points if you use their credit card. In this case it is 4x. Going back to our example, you can now see why some people really like loyalty hotel programs. You can go from 5x with no status to 10x with status and a credit card!
The problem with those loyalty programs is that you are usually limited in where you can use them. Your United miles aren’t going to transfer to Hyatt and World of Hyatt points cannot be transferred to Marriott. Thankfully, credit cards have invented their own system of travel points that are highly sought after since they can be transferred to various travel partners.
For credit cards, you earn money based off spending. Sounds simple enough but each card is going to have different multipliers for different categories. Some are pretty straightforward like the Citi Double Cash card. You’ll earn 2x on all purchases (1x when purchase made, 1x when the purchase is paid for). Other cards like the Chase Sapphire Preferred card earns 5x on travel purchased through Chase, 3x on dining, streaming services and online grocery purchases, 2 x on all other travel and 1x on everything else. Some even have rotating bonus categories like the Chase Freedom Flex card which changes bonus categories every quarter. For example, Q1 might by grocery stores which will then shift to gas stations in Q2. Travel hackers seeks to optimize their spending via multiple cards to get as many points as possible.
No matter how well you optimize your spending, the biggest way that people earn points or miles is to take advantage of sign up bonuses. You’ve probably seen advertisements like sign up for this or that card and you’ll earn X amount of points or miles. The average person gets swayed by these advertisements whereas travel hackers intentionally apply for specific cards at specific times. The goal is to get the best sign up bonuses as often as possible. Some people will actually apply for the same card over and over again to get the same sign up bonus. This is called churning. Different cards have different rules and some cards cannot be churned.
As you can see, there’s a lot of ways to earn points. They key to success is to constantly focus on ways to optimize the ways you earn points. Just remember that this is a marathon, not a sprint.