An Introduction to Points

Honestly, credit card points are one of the most underrated tools out there for people who want to travel more. We've used them to fly business class, stay at nicer hotels than we'd normally book, and take trips that just wouldn't have happened otherwise.

It's not as complicated as it sounds once you know how it works. We've put together information on the specific cards we use, transfers we've actually made, and how to approach signup bonuses without getting yourself in trouble.

The core idea

Spend on what you'd buy anyway: groceries, gas, bills. Pay the balance in full every month. Let the points stack up, then use them on the things that cost the most, which is usually flights and hotels.

The critical rule

This only works if you pay your balance in full every month. Interest charges will eat up any value the points give you, and then some. If you're not sure you can do that consistently, hold off until things are on steadier ground.

What to know before you dive in

Not all points are equal. A point worth 1 cent in one program might be worth 3 cents in another, depending on how you redeem it.

Signup bonuses are where the biggest value lives. Most premium travel cards offer 60,000 to 100,000 point bonuses after you hit a spending threshold in the first few months.

Annual fees aren't always bad. A card with a $95 fee that gives you $200 in travel credits is worth it, as long as you're actually using those credits.

Transferring points is usually the best option. Transferring to airline and hotel partners is almost always the better move. You'll often get 2 to 4 times the value compared to just taking cash back.

Real trips we've taken on points

These aren't hypothetical scenarios. They're redemptions we've actually made.

View from the first class cabin heading to Maui

First Class: Salt Lake City → Maui

Program

American Express → Hawaiian Airlines

Points used

80,000 Amex points + $12 in taxes

Cash price

$2,400 for 2 people

Value per point

3.0¢

Before Hawaiian was acquired by Alaska Airlines, American Express points could be transferred directly to Hawaiian. That transfer partner no longer exists, but it's a great example of why it pays to act on good redemptions while they're available.

Round Trip: Los Angeles → Guatemala City

Program

Capital One → Avianca LifeMiles

Points used

72,000 C1 miles + $239.36 in taxes

Cash price

$5,311.46 for 2 people

Value per point

5.5¢

Capital One had a 15% transfer bonus to Avianca at the time, which made this even better. The cash equivalent value of the miles alone was $720. Add in taxes and our total out of pocket was $959 against a $5,311 cash price.

Round Trip: Los Angeles → Lima, Peru

Program

Capital One

Points used

86,000 C1 points + $90 in taxes/fees

Cash price

$2,366 for 2 people ($1,183 each)

Value per point

2.5¢

The cash equivalent value of the points was $860. Add in $90 for taxes and our total was $950 against a $2,366 cash price.

Section 4 Section 6: Recommended Travel Cards