How to Earn and Maximize Travel Points

Over the past few years, airline fares have experienced sharp fluctuations, usually outpacing the overall rate of inflation. But for some savvy travelers, the volatile prices have felt more manageable. Their secret? They pay with credit card points.

But earning and spending points effectively on not just air fares but also hotel stays takes dedication and a bit of strategy. To help give you a leg up, Schwab talked with Brian Kelly—a.k.a. The Points Guy—whose site of the same name helps users navigate the complicated world of credit card and loyalty points.

A: Step 1 is to sign up for the loyalty programs for the airlines and hotels you use regularly when you travel. They're free. For every flight or hotel stay, always, always make sure you get credit. Step 2 is to get a credit card that also earns points, ideally with an attractive introductory bonus. Frequent flyer programs are now frequent buyer programs—meaning that's how you get the most points. You're not in the points game if you're not using a credit card.

A: Generally, you'll want to consider a card that will let you transfer points to multiple airlines and hotel chains. You can also get airline- or hotel-affiliated cards for their perks, even if you hardly use them. For example, airline-affiliated credit cards can reward you with free checked bags or a better choice of seats, while hotel-affiliated cards can get you room upgrades and even free nights. The thing you have to be maniacal about is paying them off in full, because any interest you incur will often negate the value of the points. Also be careful about opening too many cards, which can damage your credit.

A: My dad always said that cheap is expensive. While there are some decent cards with no annual fee, cards with annual fees often pay for themselves in perks and sign-up bonuses. I recommend you review each card annually, and if you're no longer at least earning back your annual fee, it's probably time to switch cards.

A: Loyalty goes both ways, and sticking to a few airlines can pay off in perks. You don't want relatively few miles in 50 accounts—you want a substantial number in five accounts. You might also check an airline's partners, since you can often transfer your miles to a partner where you already have an account. That said, you should pick the airline that will get you there in the shortest amount of time, period. Unless you put zero value on your time, it's not worth suffering through unnecessary connections or long layovers just to garner a few more points.

A: You should be getting at least one cent per point. So, if you're spending 100,000 points, you should get a ticket that's worth $1,000 or more. If a flight is relatively cheap, you may be better off paying cash than spending your hard-earned points. Why spend 100,000 points on a $500 airline ticket, for example, when you can redeem the same number of points for four nights in a $250-a-night hotel? Be especially leery of super-easy opportunities to use your points, such as paying for Wi-Fi on a flight. Such conveniences are rarely a good value.

A: It used to be a struggle to use points because of airline blackout dates, but most credit cards and loyalty programs have done away with those restrictions. What's more, purchasing with points often gives you greater flexibility. For example, most frequent flyer programs let you cancel up to one minute before departure without penalty or rebook with another airline if your flight gets canceled. In other words, paying with points can often help you take the reins when things go wrong.