For two years the Covid-19 pandemic wreaked havoc on the travel industry. And while it is finally beginning to recover, this travel hiatus created a bottleneck-like effect and it’s now beginning to burst. The result—an accelerated increase in travel demand and consequently, high travel costs across the board. Everything from airfare to hotels, rental cars and even food is going up in price—the supply-chain shortages and rising inflation aren’t helping either.
In order to combat higher costs, now may be the perfect time to build a points and miles strategy. By developing a plan now, you can begin earning the travel rewards needed to drastically reduce the price of your next adventure for when you are ready to explore the world again. Whether you’re dreaming of a pup tent in a state park or an over-water villa in the Maldives, there’s no time like the present to build your game plan.
Start with the End in Mind
The best place to start when establishing your travel goals is the finish line—this is also known as “reverse engineering.” Reverse engineering is the act of building a process by starting with the end product. With points and miles, you can build your dream vacation by simply envisioning your end goal and asking these three questions:
- Where do you want to go?
- Where do you want to stay?
- How do you want to get there?
While each can be answered simply with a destination, accommodation type or transportation method, dig a bit deeper. Write down a specific city, hotel or type of accomodation and class of service, including the airline if you have a preference.
Feeling stumped with these three questions? Consider this one, instead: What do I want to do? Here’s a helpful tip—if you can narrow down the type of trip you want to take, be it beach, city or adventure, then you can return to choosing the destination, hotel and airline.
With your answers in mind, focus on earning the types of points and miles that are going to help you reach your goals. This may be airline or hotel points with a specific loyalty program or it may be best to focus on transferable points like Chase Ultimate Rewards or American Express Membership Rewards to have more flexibility when it comes time to redeeming your points.
Once you know what types of reward currencies will help you with your travel goals, take another step back to find out which credit card products will best complement your spending habits while earning the rewards you need.
Familiarize yourself with how to choose a hotel card and how to pick an airline card. With a bit of research, you can maximize your expenses to earn piles of miles and mounds of points.
Look Both Backward and Forward at Your Spending Habits
Many consumers have specific categories they spend a considerable amount of money in. For instance, a family may spend heavily at grocery stores, while a single professional may be more likely to dine out or order in. Regardless of where your money goes, there is likely a credit card that will reward you for the things you buy most.
During the pandemic, spending habits changed dramatically. After such a large shift in what we were able to enjoy, chances are you’re spending your money very differently than you were before March 2020. Now is an optimal time to examine your pre-pandemic spending habits, consider what may look different after the pandemic and choose a new credit card accordingly.
You can start by digging into your statements prior to March 2020 and analyzing your spending. Your current expenses and those pre-pandemic may look different. Use your best judgment to analyze the past and adjust for the future. While you may need to apply today, it’s helpful to know which cards will benefit you most right now.
Collect Record-High Credit Card Welcome Bonuses
Now that you have an idea of your travel goals, you’ll need to start building up your travel rewards arsenal. One of the core ways to quickly score points and miles is by earning a welcome bonus on a travel rewards credit card. These bonuses typically come in the form of miles or points for spending a specific amount on the card in the first few months of card membership. Right now, the market is rife with generous welcome bonuses that will give your points balance a boost. Here are some of the current best offers:
- The Platinum Card® from American Express: 100,000 Membership Rewards points after spending $6,000 on purchases on the card in the first 6 months of card membership. Terms apply.
- Ink Business Preferred® Credit Card: 100,000 points after you spend $15,000 on purchases in the first 3 months from account opening.
- Chase Sapphire Preferred® Card: 80,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening.
- Capital One Venture X Rewards Credit Card: 75,000 bonus miles after spending $4,000 on purchases within the first three months of account opening.
While you can start preparing yourself to be in the best position to take your dream trip by signing up for new credit cards and earning bonuses, there are a few things to be aware of before you apply. First, you should make sure you have a good chance of being approved and are eligible for the welcome bonus. Here are a few things to know about your eligibility for the next welcome bonus:
- Credit score: Your credit score is heavily considered when applying for a line of credit, especially in a credit-tight environment like the one we are in now. If your credit score is blemished, take the time to improve your credit score so you can be in the strongest possible position.
- Chase 5/24: The Chase 5/24 rule restricts anyone from being approved for a Chase credit card if they have had five or more credit approvals in the past 24 months. If a Chase credit card welcome bonus is enticing, be sure to check your 5/24 status. If you are over and want to become eligible for a Chase issued card, hold off on applying for any new cards.
- Other eligibility requirements: Other issuers also have eligibility requirements for welcome bonuses. With American Express, for example, you can only earn the welcome bonus on a specific credit card once per lifetime. With most Citi cards, you must not have opened or closed a card within the past two years in order to be eligible for a welcome bonus.
Know that Loyal Customers Are Essential to Hospitality Survival
Businesses cannot rely on one-time customers to survive, so gaining customer loyalty will be even more crucial to the long-term success for airlines and hotels alike. It doesn’t hurt that airlines make billions of dollars by monetizing their frequent flyer programs, as well.
As for hotels, while the industry continues to compete with the vacation rental trend in leisure travel, we can also expect to see a massive push towards building loyalty. However, the jury is still out on whether or not hotels can provide the same elite experience customers had pre-Covid. Many full service hotels still haven’t returned to daily housekeeping, and more than a few never will.
Historically, business travelers have cared much more about hotel loyalty than leisure travelers, but no one expects business travel to return to 2019 levels anytime soon. In fact, Delta Air Lines CEO Ed Bastian has come out and acknowledged the drastic change and foreseeable future of business travel. “The number of trips that the average road warrior takes I’m sure is going to come down in certain cases,” he told analysts in July 2021.
This has ultimately caused hotels and airlines to focus more on leisure travelers in the future. With this renewed focus, it’s just one more reason you should be building your points and miles strategy.
Bottom Line
If you’ve been planning a vacation recently, you may have noticed higher rates for everything: Airfare, hotel rooms and rental cars. The hospitality industry is bouncing back and recouping some of its pandemic-era losses. Because of this rise in travel costs, it’s more imperative than ever that you build a points and miles strategy to offset these expenses.
After almost two years of restrictions, you may be ready to travel abroad again. Between a desire to see the world and rising travel costs, this is the perfect time to build your points and miles strategy. Once you have a dream trip in mind, you can use your downtime to build a strategy that will help you get there on a budget. Your future self will thank you for doing the legwork now.
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Why You Should Build A Points And Miles Strategy Now - Forbes
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