The First Step You Need to Take When Planning to Accumulate Points and Miles for Free Travel
Travel credit card offers to earn points and miles can be very enticing. The welcome bonuses being offered by travel credit cards have never been better. But before you go ahead and start the process of signing up for a rewards credit card you need to do one thing.
Determine what you are earning these points for.
What are your travel goals? Is it to take a dream trip to Asia? Fly the family to see grandma for the holidays? A romantic getaway? Determining the “why” is the first step to planning.
Just like you wouldn’t go to the airport before you had a destination in mind, you should not really start the process of applying for travel rewards credit cards just to earn miles until you know what you want the miles for.
Why is This Important?
In much the same way you need to know what the cost is for a large expenditure, so you can budget your finances properly, you’ll need to know your travel plans, so you know what the cost will be in points and miles. That means determining your destination, number of people traveling and the class of service you would like to travel in.
Saving enough miles for a single coach flight within the U.S is a much different objective than saving for two first class tickets to Japan. One of these goals can require more than ten times the number of miles as the other, drastically impacting how easily it will be to achieve that award travel.
Another reason you don’t want to just stockpile points and miles for a trip “someday” is because they lose value over time. Unlike investments, points and miles lose value over time. Your points and miles are only worth what your loyalty program says they are worth. From time to time, loyalty programs will “devalue” their points or miles by requiring more for a particular redemption.
For example, an airline might raise the number of miles required for a domestic flight from 20,000 to 25,000. Suddenly you need 25% more points and miles for the same travel redemption. This applies to any travel loyalty program where the currency is points or miles, including hotels, rail, cruise or other travel loyalty programs. So try not to apply to credit cards just stockpile points and miles for an undefined dream trip some day in the distant future. Start with a specific goal and work towards it. Then once it’s achieved, set your next travel goal.