Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week’s episode is part of our new series called “This or That,” where the travel team compares different ways to travel.
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Before you build a budget
NerdWallet breaks down your spending and shows you ways to save.
Generally, it’s better to diversify your points so you don’t limit your options to only one travel brand. The easiest way to do this is to use a travel credit card with transferable points, so you can earn points with one card, but then transfer those points to several different airline or hotel programs. Make sure to check that your credit card’s transfer partners are airlines or hotels that you frequent.
If you already travel with one brand regularly, it may make sense to start earning rewards with that one brand more intentionally. For example, if you live near a certain airline’s hub, you might want to consider getting the airline’s co-branded credit card to earn additional miles and get perks like free checked bags and a fast track to elite status. Elite status can unlock some money-saving perks, such as complimentary upgrades to business class seats or hotel suites.
If you are choosing between brands — whether it’s to pick one loyalty program, assess transfer partners of your new credit card or even just book your next trip — there are several factors you should consider. In addition to availability and pricing, you might want to think about rewards rate and elite status. NerdWallet used these factors and others to rate the best airline and hotel loyalty programs.
Know the trade-offs: Staying loyal to one brand can help you earn points and elite status faster, but it may limit your options. If you do want to commit to a program, look for the best availability and pricing for the destinations you frequent and your home airport.
Give yourself flexibility: Getting a credit card with transferable points can give you more options with the travel company you use. Make sure the transfer partners are ones you will likely use.
Understand the game: Loyalty programs are designed to incentivize you to stick with one brand. Note that the rewards you get, whether it’s points or a free drink, are often worth much less than the money you spent to earn the reward.
More about points and miles and transfer partners on NerdWallet:
Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.
Sean Pyles: Welcome to the NerdWallet Smart Money podcast where you send us your money questions and we answer them with the help of our genius Nerds. I’m Sean Pyles. The past couple of weeks in our “This or That” travel series, we’ve talked about when to spend points and how to earn them with a travel credit card.
But one important question remains: Should you stay loyal to one hotel or airline, or diversify your points game? Travel writer Elina Geller is here today to help you figure out your points strategy. Elina, thanks for being here.
Elina Geller: Thanks for having me.
Sean Pyles: Before we get into this conversation, a quick disclaimer that we’re going to talk about a few credit cards in this episode that are NerdWallet partners, but that does not affect how we talk about them. OK. Well Elina, first off, where do your loyalties lie? Are there any travel brands that you’re especially loyal to?
Elina Geller: Yes. I’m loyal to United because I have United Silver status, and I feel like I get a lot of perks out of that. A lot of people think that Silver status, which is the lowest level, is so insignificant, but to me it’s huge.
Sean Pyles: What do you get from that?
Elina Geller: So I get a free checked bag up to 70 pounds, but I feel like my bag is always weighing more than 50 pounds, just like a chronic overpacker. So that extra allowance that I get from my status saves me a lot of money. The other thing is, when you have Silver status, 24 hours before the flight — so, basically when you’re able to check in — you could select a free Economy Plus seat, and those seats are usually close to the front of the plane. They have more leg room. They’re, in general, just more comfortable and more spacious, and I love those seats and I don’t like paying for things, as you know.
So it’s just another way for me to get something for free, even though I obviously had to spend money to achieve the status.
Sean Pyles: And you travel internationally really frequently, staying at one location for a month, another location for a month. So you kind of need to bring all of that stuff, 70 pounds worth of stuff with you.
Elina Geller: Exactly. Not only do I travel a lot like this, but also I’m an overpacker because I like to bring all my toiletries with me and my blow dryer. So all these things weigh a lot, and plus having clothes for different climates. I really need that extra baggage allowance.
Sean Pyles: I am a loud and proud overpacker, so I can completely relate. But anyway. Are there any other brands that you’re especially loyal to?
Elina Geller: Yes, Hilton, because I have Diamond status because I have the Hilton Aspire card, and I feel like I get a lot of value out of that because obviously you get the free breakfast and also every time I stay at a Hilton property, I get a really nice upgrade to even a suite, the best rooms, because it’s the highest level status and I just feel really nice when I stay at those properties. So definitely Hilton Diamond.
Sean Pyles: One thing we should probably clarify is that in order to get these different levels of status, you don’t have to buy them necessarily, but you do have to spend a certain amount of money with these companies to achieve that level. It’s not like you’re saying, “I want to spend a hundred bucks to get Diamond status.” It’s more cumulative based on how you spend money with these brands.
Elina Geller: It depends. Hilton Diamond you get just from holding the Hilton Aspire credit card.
Sean Pyles: Interesting. All right. Well, it seems like you have a number of brands that you’re loyal to. I could see some people wanting to stick to just one brand’s program, one brand’s points system. What are some of the reasons that you would recommend maybe staying loyal to a single brand versus many?
Elina Geller: Because you could continue to earn your points with that specific brand. So for example when I fly with United, a lot of times I use my points because I have a whole strategy for this. Obviously, I always fly in first or business class when I’m flying internationally, but when I fly domestically, if it’s a short flight, then I usually will fly in economy, and a lot of times I’ll just pay for it in cash versus using points because I have United TravelBank credits from different credit cards, and in general, I have credits still remaining from when I had to cancel flights because of COVID.
So I’m trying to reduce those credits because those expire soon. So when I’m buying economy tickets, that extra baggage allowance and that free seat selection are perks, but in addition, I’m earning miles on that flight. So I feel like by having loyalty to a specific airline or even hotel, it’s cumulative, right? You get obviously the perks that your status affords you, but also your loyalty to them allows you to continue to accumulate points and miles with that program.
Sean Pyles: It seems like it would also be a lot easier to keep track if you don’t have to worry about, “Am I getting points for this company this time or this one the next time?” You just know that you’re generally working with the same system and can continue to build up points and use those points as you shop and do whatever with them.
Elina Geller: Exactly.
Sean Pyles: OK. Well, are there any cons to being loyal to just one program?
Elina Geller: If you’re loyal to one program, you can pigeonhole yourself because if you only have points with one program, you may not be able to fly with other programs’ points. But let’s say you’re living near an airport, and Delta is the local airline and it flies to all the destinations you want. So you earn and redeem points with Delta and you have a Delta credit card. If that is your main credit card, what happens if one day you want to travel somewhere and Delta doesn’t fly there? Or it costs so many points, you’re out of options? So, this is why people should be diversified, but also having loyalty is important.
Sean Pyles: You want to give yourself some flexibility so you have more options, but you also want to be able to navigate these systems in a way that works for how you use them.
Elina Geller: Yeah, exactly.
Sean Pyles: So Elina, do you think one route is better? Maybe focusing on one card or taking the more diversified approach?
Elina Geller: I think it’s definitely better to diversify because getting a transferable point credit card is going to give you a lot of perks — the most important perks being able to transfer your points to airlines and hotels. So right away, that’s going to give you many more options than, let’s say, if you would have something like the United credit card, which is only going to allow you to earn points with United.
Sean Pyles: Are there any downsides to that approach though?
Elina Geller: So the thing is, when you get a transferable point credit card, you’re not going to get specific perks for that airline. So for example, let’s say you have the Chase Sapphire Reserve. So that card earns 3 points per dollar on travel and dining. One of the big perks is being able to transfer your points to airlines and hotels. But with the United Explorer card, yes, you’re going to earn extra points with United, but then you’re also going to get a free checked bag. You’re not going to get that free checked bag with the Chase Sapphire Reserve.
So I would say if you’re very loyal to one airline, it could be a good strategy to also have that co-branded card in addition to having a general credit card. So you could get perks for traveling with that airline.
Sean Pyles: And a co-branded card is like one that you mentioned, the United Explorer card, and that’s just a credit card put out by United. People get offers for these from the flight attendants when they’re about to land, right? People come around and offer application pamphlets?
Elina Geller: Yes, exactly. But that’s not where you should be getting your credit card application in, unless it’s the most amazing offer.
Sean Pyles: Can you elaborate on that a little bit? Why shouldn’t folks apply then and there? They make it sound pretty enticing sometimes when you’re on the flight.
Elina Geller: It just really depends. You have to investigate and see if that’s the best publicly available offer. Sometimes there could be a limited time offer that’s available online and maybe what they’re handing out on the plane is just a different application. So maybe the bonus is going to be lower on the airline, maybe it’s going to be higher. It really depends.
So I would just say applying on the airline, maybe that’s something only you should do if you are very familiar with the current sign-up bonus and if you see something that’s completely outstanding.
Sean Pyles: And if you’re not, maybe use that pamphlet as part of your research, but don’t be pressured into making a decision and applying right then and there.
Elina Geller: Exactly.
Sean Pyles: OK. Well, even choosing a travel credit card with transferable points involves some degree of brand loyalty because not all credit card programs have the same transfer partners.
Elina Geller: There is some overlap between some of the programs. So for example, Marriott is a transfer partner of both AmEx and Chase, but there’s also other airlines that are unique. For example, Southwest is only a transfer partner of Chase.
Sean Pyles: Well, are there any companies, hotels, airlines, that aren’t transfer partners with any of the credit card programs?
Elina Geller: Yes, there are. Not every single airline and hotel is going to be a transfer partner. So before you decide to apply for a transferable point card, check out the list of transfer partners to see which ones align with your travels. For example, American Airlines is an example of an airline that is not a transfer partner of any of the programs. So if you’re trying to get American Airline miles, you’ll have to get an American Airlines credit card.
Sean Pyles: So it sounds like no matter what, you will have to do some evaluation of brands. What should people consider when they’re looking for a brand to be loyal to?
Elina Geller: So the first thing is convenience. Which airlines have a lot of flights out of your local airport? Let’s say you’re looking at JetBlue, but then JetBlue doesn’t fly out of your local airport to the destinations that you want. That’s not going to be an airline for you. So first just look at what airline has a hub where you’re flying out of.
Sean Pyles: OK, and what else should people keep in mind? Maybe for hotels?
Elina Geller: For hotels, also availability, because the kind of hotels that you stay at matter in terms of what credit card you would want to get to stay at those hotels. So let’s say you really like staying at Hiltons, right? You would probably want to get a credit card that earns Hilton points or if you really like Marriott’s properties, maybe it makes sense to get a Marriott credit card.
So the kind of properties that you like to stay at. And also, the hotel brands individually are different, and also not all hotels are located in all different destinations. So for example, let’s say you really like staying at boutique hotels, well, your options are going to be different than if you prefer to stay at chains.
Sean Pyles: I was going to ask about boutique hotels because some people want to stay at them versus larger chains. Can they access programs, rewards like this for boutique hotels through their credit cards? Or is that not so much an option?
Elina Geller: Some, but it really depends if that boutique hotel participates in the program. For example, there’s AmEx Fine Hotels + Resorts. There’s also Small Luxury Hotels. These hotel groups allow some independent properties to participate within them. So maybe that’s a way for you to get some loyalty out of that, but it really just depends.
Sean Pyles: Elina, how do you think things like rewards rate and elite status perks come into play when people are shopping around?
Elina Geller: So my team actually looked at all these things like elite status perks and rewards rates when we did our best ofs this year. So you could find all of those ratings on the NerdWallet website.
Sean Pyles: We’ll have a link to that in the show notes post at nerdwallet.com/podcast. OK, and so that covers hotels. What do you think people should be looking for when they’re considering an airline to partner with potentially?
Elina Geller: So I think availability at your home airport and also how easy and cheap it is to redeem points. So for example, I’m from New York, and there’s many airlines that choose JFK and Newark and LaGuardia as their home airports. But if I were to compare two of the big airlines that are in New York — United and Delta — I choose United because I think the redemption rate for award tickets is much better than Delta, which has ridiculously high redemption rates.
Sean Pyles: But we already talked about getting a travel credit card as a way to diversify points, but is there a way to use credit cards if your goal is loyalty to one airline or hotel?
Elina Geller: Yes, absolutely. Getting co-branded credit cards. So for example, I have the Hilton Aspire card, so if I ever stay at a Hilton, I will charge everything to my room and then use my credit card to settle the bill because I’m also going to be earning extra points for using that credit card at a Hilton property.
Sean Pyles: OK, another question for you. Sometimes when you’re going to book a flight through your preferred brand, you’ll find that the flight or the hotel or whatever is going to be more expensive than if you went with another option. When do you think it would be worth it to book that more expensive option, even though it’s just the brand that you’re loyal to?
Elina Geller: So this is something that I feel like I face pretty often. Because let’s say I want to stay somewhere and maybe I want to pay because paying is going to be more cost-effective than using points because it’s not such a good redemption rate but at the same time, maybe paying to stay at, let’s say, that Hilton property and even getting the free breakfast and the upgrade is still going to cost me more if let’s say I stayed a comparable property that is not affiliated with Hilton or anyone else.
So I feel like this could happen and you really just have to do the math and see what makes sense for you because yes, if I stay at the cheaper property, but then if it doesn’t have free breakfast, I’m going to have to pay to take myself out to breakfast. So these are kind of all the things that you need to take into consideration.
Sean Pyles: And sometimes the convenience of going with the brand that you’re loyal to can be worth it.
Elina Geller: It can be, but also on the flip side, maybe it’s not worth it because, yes, you’re going to earn some extra points out of that, but if it’s going to cost you a lot of money to earn those extra points, it may not make sense. So again, it’s just on a case-by-case basis.
So then another thing to keep in mind when you’re evaluating these options is are you trying to go for elite status with the hotel or with the airline? Because let’s say you’re close to earning status or you’re close to achieving the next level of status — that’s something that you need to consider because if staying at that hotel or taking that flight, that could be slightly more expensive than the competitor is going to get you closer to that status or is going to help you achieve that next level of status, then that obviously is worth more than just saving some money.
Sean Pyles: OK. So you have to think about your individual circumstances and goals right now.
Elina Geller: Always, yeah.
Sean Pyles: Great. Well Elina, thanks for sharing all of your insights with us. Can you tell us your takeaway tips, please?
Elina Geller: Yeah. So first, know the trade-offs. Obviously if you stay loyal to one brand that’s going to help you earn points and elite status faster, but it may limit your options. You may not have enough points to fly with other airlines or stay at other hotels. So that’s why you want to give yourself flexibility — which is my second takeaway tip — is to have a credit card that earns transferrable points because you can transfer those points to multiple airlines and hotels.
And I would say my third point would be to understand that loyalty programs are designed to incentivize you to stick with that brand. So keep in mind that any rewards that you’re earning, they may be worth less than the money you’re spending to earn that reward. So again, just do the math and make sure it makes sense for you.
Sean Pyles: All right. Thanks so much, Elina.
Elina Geller: You’re welcome. Thank you for having me.
Sean Pyles: And that is all we have for this episode. If you have a money question of your own, turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected] Visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate and review us wherever you’re getting this podcast.
This episode is produced by Meghan Coyle. We had editing help from Tess Vigeland and me, Sean Pyles. Kaely Monahan mixed our audio and a big thank you to the pros on the NerdWallet copy desk.
Here is our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the Nerds.