Having a good credit score and not taking out a credit card that offers great rewards is a huge waste. Believe it or not, it’s possible to take advantage of a good credit score to milk free vacations, first class flights, and free nights at all-inclusive resorts. This is called credit card churning.
Some credit cards offer points, whereas others offer miles. Before you start applying for new credit cards to earn travel rewards, it’s important to know the difference. Which one gets you the most bang for your buck?
Figuring this out will help you develop a credit card churning strategy. As with most things related to personal finance, it depends. There is no hard and fast rule, but here’s some information to help you decide whether points or miles would work best for you.
Airline Specific Miles
These are miles you accrue with credit cards that are tied to a specific airline. The miles you earn can only be used on that airline and their partner airlines. Some airlines, such as JetBlue and Southwest, use a points system rather than miles, but it works the same. This is also the case with hotel specific points and even gas station rewards programs.
It’s important to note that having 25,000 miles saved up does not mean you get to fly 25,000 miles for free. It, in theory, means that you have flown 25,000 miles. However, due to bonuses and credit card rewards, you can easy accrue 25,000 miles without flying that much.
Airline specific miles are valued differently by each airline, but almost all airline miles are valued at at least 1 cent. Many airlines have miles that are worth closer to 1.5 or even 2 cents.
To see how much an airline’s miles are worth, you’ll need to look up their awards chart. That will explain how many miles you need for a given flight, helping you figure out whether or not the airline’s miles are a good deal.