Today I want to demystify the world of using points for travel. A few months ago, I booked round trip flights to Europe for less than $225 in cash. How did I do this? With my Chase Sapphire Preferred points! My travel-points savvy co-workers told me earlier last year to sign up for the credit card since it was offering 40k in sign-up bonus points. With a bit of hesitance, I signed up for it, not really knowing how to use points for travel.
Not so long ago, I had so many questions about points for travel. I’ve wondered how many points was considered “enough” points. Would I need 100,000 points? How do I even earn 100,000 points? So many questions, so few answers. Instead of trying to figure all this out, I took the easy way out and used my points for gift cards. At 10,000 points for a $100 gift card, each point was worth $0.01 to me. I knew what to expect, it’s safe and it worked.
How many of you guys do that? I’ve done this for the past 10 years because like I said, redeeming a gift card is the most straight-forward way to use up my points because I never wanted to be ripped off. Well, as it turns out, by using my points for gift cards, I was definitely being ripped off. Hopefully by the end of this post, I will have answered some questions you’ve had about using points for travel, and that this information helps you feel empowered to find more financially savvy ways to use your points too.
How many points is enough?
Let’s take a closer look at what I booked. Using 43,125 points and $225 in cash, I was able to book my round trip flight from New York to Europe in late May/June, the beginning of high season. When I was booking with my points in January, I saw that the same flights would have cost me at least $1250. Subtracting the $225 I spent on fees and taxes, my 43,125 points became the equivalent of $1025, or $0.024 per point! That’s more than double my usual $0.01 return. Not bad right?
If you’re thinking that 40,000 in points sound like a lot, it might be easier to earn than you think. Tons of credit cards these days have great sign-up bonuses. When I signed up for my Chase card a year ago, I met the $3k spend in 3 months requirement, and 40k points transferred into my account shortly after that.
I love the Chase points because it doesn’t limit me to a certain airline, or hotel chain. This fact is important for booking for travel, as I’ll explain in the section below. Today, I won’t go too much more into the nuances of earning and spending Chase points. I’ll save that for a different time. This post will focus on how I booked my trip.
Breaking down how to use Chase Sapphire Points
Using only ~40,000 points for flights that usually cost $1200+ isn’t the norm, but as you can see from my experience, it’s also not impossible. Chase advertises that 40k points usually equals $500 in travel, but with a bit of knowledge of what’s possible, you’ll now know you shouldn’t waste your points on low-value redemptions. To learn ways to make the most out of my points for travel, I started to subscribe to some blogs following this exact subject. Once I read more of their posts, I started to get a feel of how to best use my points.
One morning while I was reading through my blog feeds, I came across Miles Value’s Don’t Miss: 13k Miles to Europe this Summer. J and I had already decided that we wanted to go to Italy this summer, I knew this was the perfect chance to pull the trigger.
Point Transfers to Miles. The promotion turned out to be a Virgin Atlantic deal, and the flight from NY to London (or other parts of England) was only 13k miles plus $131.50 in fees. I mentioned that I have a ton of Chase points from my sign-up bonus, but how does that equal a flight with VA? That’s because Chase has 1:1 point transfers to partners including Virgin Atlantic, British Airways, United, Korean Air and more. *
This means that Chase points gives me the flexibility to pick and choose which miles program I want to redeem from. So by transferring 13k of my Chase points to Virgin Atlantic, I was able to book the ticket. Is 13k points + $131.50 a great buy for a one way ticket to Europe? I’d say yes. In my past, this would have been the equivalent of $260 to me if I had used points for a gift card instead.
Issues with international travel fees
One issue that the folks at Miles Value outlined was the fact that the fees on a return trip from London would cost an extra $295 in fees, more than twice of the fees getting there. As an alternative, I had to do some extra research and figure out a return trip home.
At first, I figured I would just buy the return trip back, considering the one-way flight was so cheap. As it turns out, buying one-way international flights cost as much, if not more than, a round-trip flight. It was seriously ridiculous, I would find one-way tickets for $3000, while a round-trip was $1500. In what universe did that seem right?
So I started to think outside the box to see where else I could use my Chase points besides using Virgin Atlantic to fly. After some research, I found that for whatever reason, using points to buy one-way tickets actually cost way less than it does in the cash value. For example, a flight that cost me $3000 in cash, actually only cost me 30k miles on United Airlines, a rewards program that Chase transfers points to.
This actually ended up working out for me because I didn’t want to fly back from London anyways. So even though I had to spend 30k in points for a flight back from Paris, the fees were only $90. This was pretty much the same to me as using 13k miles w/ $295 in fees. But now I am able to do a multi-city Europe Trip since I’ll be returning from Paris!
Hopefully my story of success has showed you what’s possible with using points for travel. As someone who’s never done this before, I really found a lot of satisfaction in knowing that I scored roundtrip tickets to Europe for under $225 in cash. I don’t think I ever buy gift cards with points ever again. 😉
How have you used your credit card points? Any other pro-tips for me? Would love to learn & hear from you in the comments below!
This is not a sponsored post, just wanted to tell you about how much I enjoy the Chase card. If you’d like to take advantage of the Chase Sapphire Preferred 40k points sign-up bonus, you can sign up for it here. This promo expires May 31, 2014.
Full Disclosure: the links to Chase in this post are referral links and will give me 5k in bonus points if you sign up through the link. If you want to be nice to me, thank you in advance. I will not get any other information from you besides that I have a referral bonus in my account.