Credit: Shutterstock photoFrequent flyer programs can seem enticing for the thrill of earning free flights, but they can also be bewildering, given the intricate airline rules for collecting and redeeming miles.
Is learning about frequent flyer programs worth your time and effort? The answer, of course, depends on you.
Should you bother with airline rewards?
All major U.S. airlines operate loyalty programs. The basic premise is that if you spend your money with one airline, it will give you miles or points to redeem for free flights, better seats and preferential treatment. The term "miles" doesn't refer to a distance you've flown or can fly for free; it's just what some airlines call the rewards currency.
Answer two primary questions when deciding whether to bother with airline programs:
SHOULD I SIGN UP?
In short, yes. These programs are free, and despite the general term "frequent flyer," you don't need to be one. You can sign up online while booking your first flight. Then, enter your frequent flyer number when you buy tickets so that you'll earn reward miles or points. Maybe you'll earn enough rewards to redeem; maybe not. You won't get any better upfront ticket prices just because you're a member, though.
SHOULD I PUT EFFORT INTO THE PROGRAM?
Your answer may come down to two factors:
Where do you live? Do you have a choice of multiple airlines at your nearest airports? If so, some experts would argue that you should mostly disregard frequent flyer programs and simply book the airline that offers the best flights and prices.
But if one airline dominates your only nearby airport, then racking up loyalty rewards with a single airline - and spending them - will be easier because you have little choice.
How often do you fly? If you fly mostly one airline and fly often, you're a prime candidate to get value from a frequent flyer program.
If you don't, the decision is murkier.
Ticket prices will vary considerably, but a typical decent deal on domestic airfare costs 12,500 miles or points each way, or 25,000 round trip. You can earn frequent flyer miles in several ways, including through an airline credit card. But if you don't fly at least a few times a year, it will be difficult to earn enough miles to redeem for free flights, especially because your miles may expire after a period of inactivity.
Also be aware that award seats might not be available for the flight you want. Usually, there has to be a seat available that the airline has designated as one that can be paid for with miles.
What's in it for you?
The primary reasons to join a frequent flyer program are to earn:
- Free flights
- Seat upgrades
- Elite status
As you think about what you're looking to get out of the program, consider your goals. A typical decision for frequent flyer members is whether to use miles on luxury rides or more trips. For example, flying business class may cost as many points as two trips in economy class .
» MORE:Why you should fly first class and how you can afford it
How to get started
Here are names of frequent flyer programs for a few of the major airlines:
- American Airlines: AAdvantage
- Delta Air Lines: SkyMiles
- United Airlines: MileagePlus
- Southwest Airlines: Rapid Rewards
If you're not sure which airlines have a big presence near you, check market share for any U.S. airport at the Bureau of Transportation Statistics .
After signing up online for your airline's program, be sure your frequent flyer number is included on your online reservation so you earn rewards.
Optional: Get an airline credit card?
Getting an airline credit card is among the best ways to accumulate miles. Here's what to consider with these co-branded cards.
PROS
Earning a card's sign-up bonus, usually after spending a few thousand dollars on the card, might provide you enough miles for a free domestic flight quickly after getting the card. That's in addition to miles you earn from ongoing spending with the card. And airlines often give card members perks and benefits like free checked bags, which can be a value of $25 each way for you and others on your reservation, depending on the card .
CONS
Airline cards often require you to have good or excellent credit for approval. They usually come with annual fees, many near $100. And airline cards typically carry high interest rates, so you'll want to pay your credit card bill in full every month. An airline card also will have its own features and rules, aside from the airline's frequent flyer program.
» MORE:How to choose an airline credit card
If you aren't loyal to a single airline, you might consider a general travel credit card instead, which provides travel rewards without tying you to a single airline.
Optimize your miles
The key to using frequent flyer programs well is accumulating miles efficiently and redeeming them to your best advantage, sometimes called "earn and burn."
EARN
The basic way to rack up miles is by flying the airline. You typically earn rewards based on how much money you spend, not how far you fly. In a simplified example, you might earn 5 miles per dollar spent on airfare. A $500 round-trip flight earns you 2,500 miles.
Other ways to earn:
- Apply for an airline credit card and earn a sign-up bonus, or maximize spending on an existing airline credit card (without overspending)
- Book with the airline's hotel and rental car partners
- Shop your credit card or airline bonus malls
- Join your airline's dining rewards program
- Fly partner airlines
- Gain elite status (more on that later)
If you don't have enough to cover a flight, you can buy points or miles from the airline, but on average they cost more than they're worth.
BURN
Spending your miles wisely means getting good value. Airline miles or points are typically worth around a penny each, according to NerdWallet values. At that rate, you would be getting fair value using 40,000 miles to buy a flight that had a base fare of $400. For simplicity at that valuation, chop off two zeros from the number of miles required. That's at least how much the flight should cost in cash.
POPULAR WAYS TO BURN
1. Free flights: Use your airline's booking website to see what a particular flight will cost if you pay with reward miles or points vs. cash. (Most airlines publish an awards chart detailing the maximum number of points or miles you'll need for a given flight.)
Your airline program may offer several levels of award seats, requiring more miles for more desirable flight times, seats and cabins. They are often awarded as one-way flights, so if you're spending miles, you'll have to apply miles to both the outbound and return flights separately. You can also redeem miles on partner airlines.
Be aware that redeeming airline miles for a "free" flight might not be completely free. On a domestic flight, you might have to pay a typical amount of $5.60 each way, usually labeled as taxes and fees. Those same costs (and sometimes fuel surcharges, too) on international flights could cost hundreds of dollars. You might also pay a "close-in" fee for booking award flights within a few weeks of departure.
2. Upgrades: Upgrading your seat to a premium class - business or first class - may require payment in the form of a cash co-pay as well as miles. As with award seats, upgrades are based on one-way flights.
3. Other travel expenses: Redemption options might include airport lounge membership fees, hotel stays, car rentals, cruises and gift cards. These options tend to offer a lower value than points or miles are worth.
Expert level: Earn elite status
Achieving airline elite status - which may be called silver, gold, platinum or similar - requires a lot of effort and money. It's typically based on how far and often you fly with the airline and how much you spend.
Even if you fly often, consider whether it's worth trying to achieve elite status. Some of the best traditional perks of being an elite flyer - free checked bags, earlier boarding and better access to award seats - may be available to airline credit card holders for the relatively minor cost of their card's annual fee.
WHAT YOU GET
With elite statuses, you might qualify for earning more award miles when you fly, seat upgrades, priority check-in, complimentary checked baggage, better award-seat availability, discounted and waived fees, and other benefits.
HOW YOU EARN IT
The math to earn elite statuses can be confusing, and airline programs differ widely in the ways you can achieve such status. But basically, you need to do things the airline cares about as a business: fly often, fly far and spend money.
With United Airlines, for example, to achieve its lowest-tier status called Premier Silver, you would need to spend at least $3,000 in a year and fly 25,000 miles or 30 segments. (A segment is a trip between a city pair under the same flight number and with the same plane. It could include a stop and still be a single segment.) You get a boost to your miles and segments if you buy pricier fares, like a full-fare economy instead of discount economy.
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Gregory Karp is a writer at NerdWallet. Email: gkarp@nerdwallet.com. Twitter: @spendingsmart.
The article Frequent Flyer Programs: How to Make the Rules Work for You originally appeared on NerdWallet.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
