Point collecting isn’t just rewarding; it can be incredibly fun! Imagine never having to pay for a plane seat again. Although airline and airport taxes and fees are still payable (discussed further below), many loyalty program members manage to fly around the world for free each year by changing the way they spend their everyday earnings—often without spending any extra money.
Earning Points: Different Methods
Flying:
- Many loyalty account holders earn points exclusively when they fly. While this can contribute to topping up a points balance, it’s not usually sufficient alone unless you fly frequently and in premium cabins like Business or First Class.
- True points collectors approach every purchase with a point-earning mindset, aiming to maximize points from all types of spending.
Credit Cards:
- Some credit cards are specifically designed for earning loyalty points. For example, the British Airways American Express card rewards up to 3 points per £1 spent, even on everyday purchases like groceries, petrol, dining out, and entertainment.
- Here’s an example calculation for someone with an average monthly spend of £1,500 on a British Airways Amex card:
- Monthly Spend: £1,500
- Points Earned: 1,500 x 3 = 18,000 points per year
- The idea isn’t to increase spending but to shift everyday purchases to a point-earning card. Paying the balance off monthly avoids interest, making these points essentially free.
- Additionally, during promotional periods, sign-up bonuses can be as high as 60,000 points. Meeting the card’s initial spending requirement (e.g., £3,000 over the first three months) can yield substantial rewards, even providing enough points for a one-way Business Class flight.
Note: The goal is to earn points, not debt! Only use a credit card for points if you can consistently pay the balance in full to avoid interest charges that can outweigh the benefits.
Online Shopping Portals:
- Airline loyalty programs like British Airways Executive Club and Virgin Atlantic Points Club feature dedicated shopping portals where purchases through links to retailer sites earn extra points.
- These portals allow you to shop with popular retailers (often at the same prices) while earning points. Airlines receive a referral commission and pass a portion to you as points, creating a win-win.
- Retailers participating in these portals include major hotel chains, insurance providers, and even utility companies.
Real-World Example: How Many Points Can I Earn?
To illustrate, let’s look at Mary, a fictional example traveler with average spending habits:
- Monthly Spending on Essentials: £1,500 (qualifying for credit card points)
- Annual Vacation: £2,000
- Gifts Throughout the Year: £500
- Holiday Shopping: £700
- Car Insurance: £800
- Other Insurance: £1,000
- Total Monthly Spend: £1,916
- Total Annual Spend: £23,000
Potential Points Calculation with British Airways American Express Plus Card:
- Sign-Up Bonus: 30,000 points (upon spending £3,000 in first 3 months)
- Annual Points from Monthly Spend: 34,488 points (based on average monthly spend)
- Shopping Portal Spend (20% of total spend through BA portal, averaging 5 points per £1): 22,992 points
Total Points Earned in One Year: 87,480 points
With the British Airways American Express Plus card, Mary also qualifies for a 2-for-1 companion voucher (requiring a £15,000 annual spend), reducing the points needed for flights by half when used solo. Here’s how her points and voucher might be used:
- Business Class Return to New York: Approximately 80,000 points (reduced from 160,000 with the voucher)
- First Class Return to New York: Approximately 68,000 points (yes, First Class sometimes requires fewer points than Business!)
With 87,480 points, Mary could cover her next vacation with a luxurious First Class round trip to New York.
Costs and Fees to Consider
While points can cover the fare, there are still some associated costs to consider:
Taxes and Fees:
- Although points cover the base fare, taxes and fees still apply, which can vary by airline and cabin class. For example:
- Business Class Return to New York: ~£450 in fees with British Airways
- First Class Return to New York: ~£820 in fees with British Airways
- These fees cover airline and airport surcharges, which are unavoidable but significantly lower than the cash price of a premium ticket.
Credit Card Fees:
- Some points-earning cards, such as the British Airways American Express Plus card, charge annual fees (e.g., £300 per year).
- This fee may seem high, but the savings on premium flights—often costing up to £10,000—justify the cost for frequent travelers.
Point Values for Business vs. First Class:
- Interestingly, British Airways often requires fewer points for First Class than Business, mainly due to different pricing structures and limited seat availability in Business Class. Here’s a breakdown:
- Business Class to New York: ~80,000 points (with companion voucher)
- First Class to New York: ~68,000 points (with companion voucher)
Using points, a round-trip First Class experience on BA could cost just over £1,100 (£820 in fees + £300 card fee), versus up to £10,000 for the standard fare.
Key Takeaways for Point Collectors
To maximize the benefits of collecting points for premium travel, keep the following tips in mind:
- Focus on One or Two Programs: Concentrate your spending on loyalty programs aligned with your travel goals.
- Utilize Affiliated Credit Cards: Cards like the British Airways Amex maximize points on daily spending.
- Leverage Shopping Portals: Use portals to earn extra points on everyday purchases at no extra cost.
- Take Advantage of Sign-Up Bonuses: Many cards offer substantial bonuses that can significantly boost your point balance in a short period.
- Avoid Debt: Always pay off your balance in full each month to prevent interest from canceling out your rewards.
By combining these tactics, you can make high-class travel a reality without paying premium prices. The true value of point collection lies in understanding how to strategically collect and redeem points, turning everyday spending into extraordinary travel experiences.