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January 19, 2006

Shopping around for the best mileage award (Part III)

In the first two sections I’ve talked about ways of strategizing which award to shoot for when earning miles. How to earn the miles is a huge separate topic; I’ll give some basics here on where to start.

The self evident way to earn frequent flyer miles is to fly frequently. If you earn miles “butt in seat” and find yourself flying often, then your choice of what program to belong to ought to be predicated less on raw mileage earnings and more on status. British Airways program sucks for mileage earning in economy, but if you’re flying BA often enough to move a few tiers up and earn the upgrades, stay with them for the perks. Smarter Travel just published an interesting discussion of elite strategies.

Rewards currencies are a massive industry and a game everyone – not just business travelers – plays. I did not fly one single mile of the 60,000 I used to purchase my ticket to St. Petersburg. It came primarily from Priceline bidding.

You can do this too. A great first stop is Gary Steiger’s Free Frequent Flyer Miles. I’ve gotten plenty of tips there.

One of the best non-flying mileage earning opportunities is a credit card that offers miles or another reward. Free Frequent Flyer Miles discusses these in great detail, as does Gary Leff’s blog View from the Wing. Leff discusses several mileage cards and explains the advantages of each from several perspectives, including that of a business traveler where perks I wouldn’t care about, like the ability to buy companion business fares, have more weight.

What do I think the best mileage card is? I agree with Leff; the Starwood American Express because it is by far the most versatile. Starwood points are convertible at a 1:1 rate into over twenty other airlines, including Asia Miles, with a few notable exceptions. The most unfortunate is United at 2:1, as is Varig, but other Star Alliance partners like Asiana are 1:1. Of the Oneworld airlines, soon-to-be member JAL is 3:2, and LANPass is 1:2, which takes into account the difference between kilometers and miles with a slight advantage. Starwood points are valuable on their own for hotel stays (I used mine for a very good cash and points deal at the Sheraton at Iguazu Falls). They have great rewards including Nights and Flights, where 60,000 or 70,000 Starpoints gets you five nights in a hotel (28,000 or 40,000 miles) and 50,000 airline miles – that’s a bonus of 8,000 or 10,000 points over doing the two separately. If you opt just to transfer points to miles, for every 20,000 Starpoints transferred another 5,000 points is added, another major perk. The card also has the advantages (better service, especially when something goes wrong while traveling) and disadvantages (less universal acceptance, some higher fees) of being an American Express card. Annual fee is $30 after the first year; there’s a signup bonus of 4,000 Starpoints after the first purchase and you’ll have gold status in Starwood as long as you hold the card. Starwood has far fewer earnings partners than other rewards programs, so you’re probably going to earn the bulk of your Starpoints at Starwood hotels (3 Starpoints per dollar as a Gold member) or through credit card purchases. It would take $20,000 of spending to earn 25,000 Asia Miles, or $6,250 of hotel stays if you charged them to the card as well. After giving you a zillion resons why they're the best card, I'll confess I'm doing almost no spending on it at present. Mine is all on Goldpoints because I'm targeting a Radisson hotel stay.

Another hotel rewards currency that can convert to miles is ICHotel Groups' (Holiday Inn, et al) Priority Club. The conversion rate is much less advantageous than Starwood (4:1 in 10,000 point increments) but it’s also to a large amount of airlines including Asia Miles and LAN – but it looks like LAN is 10000 points to 2500 kms – which is pretty dreadful. However, hotel stays earn 10 points per dollar as opposed to Starwood's 2 or 3, so earnings from stays convert at a more comparable rate to Starpoints. The credit card linked to Priority club is a Visa with no annual fee and a 15,000 point sign up bonus – though I have received a 30,000 offer via surface mail. It would take $100,000 of credit card spending to earn 25,000 Asia Miles or $9,091 in hotel stays if you charged them to the card.

Goldpoints are a more complicated story – read Gary Steiger’s explanation at Free Frequent Flyer Miles. There are two different Goldpoints, believe it or not; Goldpoints Plus issued by Radisson and plain ol' Goldpoints. Goldpoints Plus has a better conversion rate 8:1 to 11 airlines (including Asia Miles) than Goldpoints, which redeem at 10:1 only on Northwest, US Airways and Delta. So join through Radisson. But I needed to convert AAdvantage miles to Goldpoints via points.com, and the Radisson program cards don’t participate. So I ended up opening a second non-Radisson account solely for that purpose (Goldpoints will let you combine accounts) Credit card earners earn 3 Goldpoints per dollar; it is a Visa with no annual fee and a 20,000 point sign up bonus for a limited time. Hotel stays earn 10 points per dollar and there is a 1,000 point bonus for booking online. It would take $66,666.66 (spending of the Beast!) to earn 25,000 Asia Miles or $15,385 in hotel stays if you charged them to the card. However, Goldpoints has a very generous online shopping portal. If you intend to buy flowers online, FTD and the Flower Club earn 100 points per dollar there. Two thousand bucks worth of flowers will get you 25,000 Asia Miles, but hell, it will also get you close to six night’s hotel at the Radisson SAS Royal in St. Petersburg, which has a retail value of well over $1,500 in high season.

Priority Club and Goldpoints give you flexibility in use (and Amex isn't accepted everywhere) but at a cost. If you know you're targeting United for a trip to Australia, it makes the most sense to get a United Visa, especially with its large sign up bonus.

So decide where you want to go. Barcelona? Kyoto? (I’ve tipped my hand to two on my list!) and then decide which airline award is most advantageous to get there. That depends as much on routings as on cheap award levels; I’d love to fly to Kangerlussuaq, but it’s not happening via a Oneworld reward. I better start saving up SAS Eurobonus points.

The most advantageous award also might not have the lowest cost award. If United’s award is 5,000 more than another carrier, but you’d have more earnings opportunities – credit card and telephone service signup bonuses as well as flights – for United, then target United. Keep your ear to the ground for specials as well. Continental recently ran a sale on award tickets to China; economy to Beijing was only 30,000 miles. There are earning speciasl as well. If you're flying from San Francisco to Asia, Cathay Pacific is currently offering double miles on selected routes. Check the program's website for special offers as well as Free Frequent Flyer Miles, Smarter Travel and View From the Wing.

For day to day credit card expenditures try one of the convertible hotel programs. There’s also Hilton and Amex’s Membership Rewards, but Hilton’s rate for transfers is 20:3; and conversion opportunities at both Hilton and Amex have been dwindling.

Finally, be careful with credit cards. If you can’t pay off your balance every month, these strategies cost a whole lot more.

I’ve worked with Asia Miles already. Their service is quite satisfactory. A toll free US number links you to their 24 hour service center in Hong Kong. Occasionally I have a small language difficulty with the representatives. They have access to the same award inventory as every other partner airline, but when reserving this flight I was not able to get my flights on the first call; they could not find availability. Running a dummy award on British Airway’s site told me what flights were actually available. I copied that information down, gave it to the representative at Asia Miles and there were no further problems. The biggest downside with Asia Miles is that their miles expire after three years. Period. No extensions for activity as with most US programs. So don’t convert other currencies to Asia Miles unless you are certain you will use them within three years but in plenty of time to get the award you want. I used a few Starpoints to top off my Asia Miles account; it took a little over two weeks for my account to be credited.

LANPoints expire after three years, but are extendable only if you fly LAN. So if you’re considering a trip or two to Central or South America, it may make sense to join considering their signup bonuses and that activity extends the shelf life of their miles. I am not a member so you’re venturing into uncharted territory regarding partner award availability.

Posted by Leigh Witchel at January 19, 2006 10:06 PM

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This is all fine and good, but you failed to answer the question on everyone's mind... do any of these airlines or hotels give Green Stamps when you patronize them? I need a few more to finish my partially filled book, which will give me enough for than new toaster I have had my eye on! :-)

Posted by: Steve at January 21, 2006 11:23 PM

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