Budget with points

One of my favourite little obsessions is to budget with points. I wouldn’t consider myself a point hacker, but if I lived in the US I probably would be. If you’re really interested in maximizing your points, you definitely need to read about credit card churning. Not sure what that is? Neither was I!! You should read Kyle’s post!

The most common way to collect points is with a credit card. Most point-collecting credit cards have a high interest rate as well as an annual fee. In order to justify the annual fee you need to earn a fair number of points per year. A short-haul flight is usually 15,000 points (earned by spending $15,000). As long as you are saving more on this one flight than your annual fee, you’re set. If you’re not going to spend enough to earn one flight a year this is likely not a great option.

You also have to pay off the credit card every month to ensure you’re not paying interest. Once you pay interest, the points aren’t even close to worth it!

We have a hefty annual fee on our points card, but this year alone we’ve spent about $2000 on flights that should’ve cost us about $11,000. That’s definitely worth our annual fee! More importantly, some of that travel we may not have done if we didn’t have the points to pay for the majority of the flights.

Credit Card Points

My points mainstay is our Visa Infinite card.  It’s fantastic. We get 1.25 points for every dollar we spend. The only downside is that we don’t really get anything else. There’s no changing it. No way to “work the system”. The redemption is good, and we have done a lot of travel with our Avion points (i.e $11K for $2K), but there’s really no excitement. The more money you spend, the more points you get. End of story.

There is a side-bar to Visa Infinite points. We bank with RBC, and they have an E-mall. I sign-in to my online banking, then enter the E-mall, and from there go to the website on which I want to shop. By going through the E-mall “portal” I earn an extra 1-20x points on my online purchases. It contains everything from e-Bags to Apple to TurboTax! It’s a simple extra step, and for something I’m going to purchase anyways, it’s a great way to get extra points.

The best part of credit card points is that they’re good for any flight. There’s no “blackout dates”. The only stipulation is that the flight has to be booked 14 days or more prior to departure. I can deal with that! The best value for points is to book return flights, so that’s what we do. I’ve also calculated that the best return is the short haul flights within a province or between provinces. Since we live in the middle of nowhere, we’ll often book from our little airport to Vancouver with points, and then purchase our overseas flights. This saves us a significant amount of money as overseas flights are usually reasonable from a major hub airport.

Air Miles

Air Miles works completely differently than credit cards.
Air Miles collecting is like a game. It’s as if I’ve accomplished some great feat when I come home from the grocery store and can announce to Randy, “I got 437 Air Miles today!”. (His first question is always “What did you spend?” – does it matter? I got 437 Air Miles, that’s half a flight to my mom’s house!).

For me, Air Miles is great for flights to & from obscure airports. A flight from our small airport, to my mom’s small airport, can sometimes cost upwards of $900. Per person! During low season the same flight is a meager 750 points. If I shop smart, I can sometimes come away with 500 points during our big monthly shop – for $200 worth of products that I’m going to consume, and would be buying anyways. I try to only buy toilet paper/paper towel/kleenex when they’re on Air Miles. We need a bit of extra storage space for the back stock, but it’s worth it. I also love that when things are on for mega-Air Miles, they’re often also on sale!

Airline Points

This is one that I don’t pay a whole lot of attention to. I typically fly Air Canada (Star Alliance) and faithfully put in my Aeroplan number each time I book a flight. I don’t go much beyond that. We have periodically used these to book flights, but they’re just like an unexpected bonus. The best redemption value reward flights are quite restrictive, and I don’t like restrictions! I also don’t like spending more points than I have to for a flexible flight!

We are able to convert our Visa Infinite points to WestJet, British Airways, American Airlines or Cathay Pacific points. Occasionally RBC will have a deal in which you can purchase 5 airline points for one Avion point. This is a HUGE savings!! I haven’t had an occasion to do this yet, but I have signed up for all 4 airline’s reward points club so that I can do it in the future if I need to.

What will work for you?

Will my exact point-scheme work for you? Probably not, but there’s some combo out there that will. You just need to spend a bit of time, do a little research, and figure out which is best for you.

Not having at least one points card is like saying “no, I don’t like free stuff. I don’t need my spending to work for me”.