The long version.

There are a ton of different terms flying around in regards to travel rewards.  One of the most common areas of confusion is the difference between points and miles; there is none.  Each company chooses what to call their form of rewards, e.g. Alaska Airlines miles, Virgin America Elevate points or Chase Ultimate Rewards.  All of these are the same in that you receive a certain amount of them for a specific activity and they in turn can be redeemed for either cash back and/or travel rewards.     

As with most things, the devil is in the details.  This is extremely true in the points world and you'll quickly learn that it pays to read all the fine print.  Where points begin to vary is based on the rules of redemption set by the company that issues them.  For example, Hawaiian Airlines has different rules for their points than United Airlines, and Chase Bank points are even more different.  In order to understand how points are earned and used we'll break them down into three different groups.

Loyalty Program Points

These points are issued by airlines, hotels and car rental companies and can be used within their respective program or on one of their partners.  For the most part, they cannot be transferred between one another (without incurring a large fee), but can be used to purchase/redeem tickets with their partners.  For example, American Airlines (AA) and British Airways (BA) are partners, so let's say you have 5,000 points with each airline and need 10,000 points to get a ticket from Austin to San Francisco on AA.  Even though they are partners, you cannot combine them to get your ticket. However, if you have 10,000 British Airways points (called Avios) you could call BA and ask to use your points to buy the ticket on American Airlines. 

In the example above I used 10,000 points as the required amount for an airline ticket.  That number was based off a chart that BA issued where they use flat rates based on the distance of the flight.  Other airlines have charts with different rates depending on the origin and destination while some airlines, such as Southwest and JetBlue, base the number of required points on the cash value of the ticket (i.e. the higher the cash value the more points needed).  For the airlines that use a chart, the average amount of points required for a round trip long-haul flight in economy is 25,000 for domestic and 50,000 for international.  Click here for more information on how to determine the amount of points required for travel.

Now let's look at how to earn loyalty program points.  One of the most well known ways is paid travel with the airline, hotel and/or car rental company; if you pay for a flight, car rental and/or hotel stay and are a registered member of their loyalty program you will earn points for your travel.  One way to increase the points earned is to sign up for the company's co-branded credit card.  For example, if you stay at a Marriott you will earn up to 10 points for each $1 spent just for signing up with their loyalty program Marriott Rewards.  If you pay for your stay with the Marriott Rewards Credit Cardyou'll earn an additional 5 points per dollar spent, a 50% increase.  

In addition to the increased earn rate, the co-branded credit cards typically come with sign-on bonuses that, in my opinion, provide the fastest way to earn large amounts of points.  There is a strategy to the order in which you apply for credit cards; read here for more.  

I mentioned partnerships before in the example with American Airlines and British Airways.  These alliances can be instrumental in how you earn points because, whether due to geographic location or just personal preference, we tend to travel with certain companies more than others and do not always need to be earning rewards with each company.  Furthermore, the example with AA and BA shows us that you cannot redeem much if you have a small amount of points scattered across several loyalty programs, since they cannot be combined.

Luckily, when you travel with a particular company you can credit your earned points to one of their partners if you happen to value their rewards more.  For example, I don't fly with American Airlines very often and also find their travel reward availability to be lacking, but they have tons of partners that I do use.  You can take advantage of this when purchasing your travel by choosing which of their partners you'd like to credit to and entering in your respective loyalty ID; this is typically part of the form you fill out when entering in the passenger information.  When I do fly with AA I usually credit my points to BA since I find those easier to earn and use. 


In the (attempted) interest of brevity I'll briefly mention a few other ways to earn loyalty program points.

  • ​Dining Rewards & Shopping Portals: most programs have a partnership with Dining Rewards Network or something similar and a list of merchants where you earn a certain amount of points per $1 spent.  Again, these are in addition to any points you may be earning with a credit card. The shopping portals in particular offer increased bonuses every once in a while and are worth keeping an eye on.

  • Surveys: companies like e-miles and e-rewards provide surveys for you to fill out and give you rewards that you can use to redeem for points with their partners.  While these are free they can be time-consuming.

  • Transfer points from a flex account:  There's more detail about flex points next on this page but the bottom line is that banks such as Chase, Amex and Citi allow you to accrue points with their credit cards and then transfer them to airlines and hotels that they partner with.  

Flex Points

These are points that you can earn with American Express (Amex), Chase and/or Citi Bank by using specific credit cards that earn points in their rewards system.  

They are called flex points due to their flexibility as they can also be used to get cash back on your credit card statement and to book travel through the issuing institution's own travel portal.  Typically cash back comes at a rate of $.01 per point, so 10,000 points would be worth $100 in cash back. Using points in the travel portals can usually be done for between $0.01 and $0.015, meaning you could potentially get a 50% higher return if using the travel portal instead of the cash back option. These portals are within the websites when you login to view your points and you can use them to search for airfare, hotels and/or car rentals.  They will show you the cost in points and dollars and even allow you to use both.  


In addition to the first two options, flex points also have the ability to transfer to airline and hotel partners on an as-needed basis.  Essentially, this means that flex points can be turned into loyalty program points.  By transferring points to a partner, you can potentially get above $.02 per point, which is double the value of redeeming for cash back.  You may have 50,000 flex points with Chase, Amex or Citi but only need 10,000 points for a ticket, so you can transfer the 10,000 to the partner of your choice and still have 40,000 left over for other things.  To show you an example of when transferring can be the best option, let's use the British Airways chart from before. 


Say you want to travel from San Francisco (SFO) to Portland (PDX) which is a flight distance of 551 miles.  Using the BA Award Chart, a one way economy flight would cost 4,000 or 4,500 points depending on whether or not it was peak season.  For this exercise we'll assume it's off peak and the ticket is 4,000 points.  To make it more interesting, we'll say that you want to book the flight last minute and the cash value  would be $250.  Below is a comparison of the three flex point redemption options for our flight to Portland.


1. Cash back (Rate of $0.01)  $250/$0.01 = 25,000 points needed

2. Travel Portal (Rate of $0.015) $250/$0.015 = 16,666 points needed

3. Transfer to BA (4000 pts. flat rate) $250/4000 = $0.06, each point has a value of $0.06   


In the example above, option 3 is by far the best deal.  Keep in mind that this isn't always the case and it's important to research all your options before booking your travel.  Flex points are my particular favorite because of their versatility and the ability to earn multiple points per dollar spent on things you would buy anyway.

Fixed Points

If you feel like flex points involve more work than you're interested in doing, you might like fixed points.  These are also issued by credit card companies, but they have a flat rate of redemption, usually between $.01 and $0.02 . To redeem, after you book your travel you select whether to use some or all of your points toward your credit card statement, which is then deducted from your total balance.  Some programs offering fixed points are:


  • Bank Of America

  • Barclaycard Arrival

  • Wells Fargo

  • Capitol One 

An advantage to these points is that there are no blackout dates with booking availability as there might be when redeeming loyalty program points. 

In A Nutshell

Loyalty Program Points - Airlines, Hotels and Car Rentals membership programs

Flex Points - Chase, Amex & Citi, can be used for cash back, travel booked with bank and/or transferred to loyalty programs

Fixed Points - Including, but not limited to, Barclay, Capitol One, and Wells Fargo.  Points that have a flat rate that can be used to deduct travel expenses off your credit card statement