Age-net takes a look at the best way to use your air miles to travel the world for less
Air miles have been around for years, yet many people are still unaware of the massive potential the scheme has for saving on travel costs.It really can feel like a form of currency, and one that can be arbitraged in your favour to save you even more money. You just need to know how to use them wisely to get the most gains there are that are just ripe for the taking.
Naturally, the rewards scheme is only going to be of use to you if you actually use them, but given it’s money just being handed to you freely, even just the one annual trip abroad could see your flight being paid for by air miles, leaving you with just the accommodation to take care of at the other end.
The more you fly, the more you earn.
It’s the airlines loyalty rewards scheme. Just the same as the Tesco Clubcard rewards customers with points, airlines reward you with miles. They even let you buy them if you like. Seems counter-intuitive but sometimes that can be worthwhile.
The only time you’d benefit from actually going against the grain and buying air miles is if you’re a few thousand (air miles, not pounds) short for an upcoming trip. They usually cost around a penny to 1.5p on the mile. If you were due to travel and found that your miles were 4’000 short of what you’d need to buy your flight tickets, you could buy them for as low as £40 to £45 for a 4’000 mile trip.
The only downside to the air miles is that there are only two main operators you can fly with using them in the UK.
- British Airways Avios
- The Flying Club from Virgin Atlantic
Both those flight operators have different clubs, offers, advantages, and a range of fares based on the class of ticket you choose. Economy class being the cheapest and increasing ticket prices for Business Class and First Class.
That being said, the airline operators work together, so you don’t have to fly with one of the above to benefit from air miles. You can book with Virgin to fly with Delta, and likewise with British Airways, you could fly with Iberia airlines and still use your air miles.
Because air miles exclude taxes and surcharges, the economy class tickets aren’t usually worth it when you fly from UK airports, because the tax rates are sky high. You will get better value by putting the air miles towards an upgrade to a higher class of ticket, allowing you to travel in luxury for around the cost of an economy ticket.
Naturally, the idea is to get the free travel and not just reduce the cost of travel. To do that, there’s a number of things you can do that really can pile up the miles in your favour.
How to increase your air miles annually
Third party loyalties
Airlines have strong business connections, and they are there to encourage people to do business with them. One of the most notable loyalty programs is Hilton hotels because of the high rewards on offer. That’s in addition to their own loyalty program. Other hotels will pay one or the other, but not usually air miles and rewards for their own company.
In certain hotels, it’s not unusual to receive around 1’000 air miles based on a one night stay, and sometimes more if they are basing the rewards on the total spend, in which case any room service, and drinks may bring your total rewards up.
That can be increased even further during promotional events. One of those that has been done in the past was an accumulation event when you get a fixed amount of air miles and reward points for the first night’s stay, double on the second night, triple the third night and so on until a 5’000 cap was reached.
Naturally, the expense of that would be nowhere near the value you’d get in air miles, but if you planned to have a 2-night break away and a hotel chain was running a promotional event, it might be worthwhile taking the offer up.
It’s all about checking what rewards area available in advance of spending. Spend wisely, and it’s not just air miles you could gain.
Get your groceries at Tesco and use your Clubcard
The Tesco Clubcard gets you rewards on your grocery shopping and any purchases you make on electrical and on the online store. You’re spending it anyway, but what you do with your points is completely up to you.
You do have choices.
For every pound you spend in Tesco, you get 100 loyalty points. The points are accrued and paid out quarterly with vouchers you can use to lower your shopping bill. Those can be swapped through Boost Partners of Tesco, of which both BA, and Virgin Atlantic are both partners.
That’s in addition to a number of other retail outlets, and other third parties that give you air miles based on your purchases.
This is the biggest way to significantly boost your miles and lower your costs, if not eradicate them from your trip completely.
Credit card firms compete fiercely for business, but for some reason they don’t appear to be like highstreet stores and supermarkets that pay attention to their Key Performance Metrics, which would tell them that their customers are disappearing. Instead, the finance sector seems to base its metrics around the cost of customer acquisition, rather than reward loyalty. It’s no wonder we hit a brick wall and fell into recession.
Credit card churning is the term for this next part, and it does sound shady. This has been around for years and the majority of firms still allow this to happen, but you are best to check the small print just to be safe.
The churning of credit cards is when you’re accepted for one, you use it, pay it, cancel it, and start the process again.
Of course, for this to be any use, you need be able to be accepted and that needs a good credit score. Over 900 will do. If you don’t know what your credit score is, you can get a free trial for 30 days with Experian, or Equifax. Just remember to cancel before the trial expires because you won’t get a refund.
If you are going to be applying for credit cards, you cannot go overboard and apply to as many as you can. Every application results in a credit check being run, and with every check that’s done, your credit score drops. Keep your applications low and only apply for credit with the companies offering the best benefits.
Sometimes to get the best, there is a fee involved. But sometimes that fee can be refundable on cancellation. This is where you will need to know if it’s a onetime offer available for new customers only.
Fees can be charged annually at around £75+ per year. The majority of card providers give you bonuses when you’re accepted for the card, and paid your fee. You will probably find that there’s minimum spends involved which can be anywhere from £1’000 to £3’000, and they don’t always include balance transfers to be eligible. As previously mentioned, you need to read the terms in the small print.
If the deal requires a minimum spend to qualify for 25’000 air miles, then obviously don’t apply for the card until you’re expecting a big spend coming up. Probably Christmas time when you can just whack all your purchases onto the card, but be sure the money’s there to pay it off in full as soon as you receive your invoice.
The interest on high reward paying cards is excruciating and if it’s not paid in the first month it will cancel out any benefit you would have had from using the card. Possibly landing you in financial hardship.
If you’re not good with money management, or making payments on time, do not consider this option. Settle for the air miles from Third party partners of the airlines and just use what you get to discount your travel costs.
Don’t risk what you can’t afford and if you’re unsure about controlling your spending, then just don’t.
Better safe than sorry.
For those with the credit rating and the self-control and want the benefits on offer from credit cards, what you need to look for in the small print is the eligibility criteria you have to meet.
Some card providers such as the MBNA credit card, only make certain sign-up bonuses available to new customers and does not include those who have held the card before, or a card from the same company.
The other thing you need to know is the refund policy for cards with an annual fee. Cards issued by American Express (mostly) allow you cancel your card within six months and claim a refund on the fee.
Because they don’t (currently) limit their offers to new customers only, it is possible to put charges on the card just to reach the minimum spend requirement, pay that off in full so you don’t pay interest, cancel the card, claim a refund on the annual fee, and do it all over again six months after you’ve cancelled.
The vast majority of credit card providers have air mile bonuses in the thousands available for new customers, and on top of that, you can earn more miles on the charges you put on the card.
Think subscriptions, shopping, online purchases, eating out etc. The usual rate for air miles is one mile per pound. A £500 bill gets you 500 air miles to travel. If you’re self-employed, business expenses will soon see the miles stack up.
In addition to that, you can also find that there’s some generous travel insurance cover provided with some of the annual fee cards.
Plan your flights and budget your miles
The UK tax rates are exuberant. The purpose of air miles is to save you money on your travelling, but air miles cannot be used to pay surcharges and taxes. It’s worth doing your research to find out whether it’s worth using your air miles to book a return journey, or just buy a one-way ticket outbound, and use the air miles for your return journey.
Another point to consider is the air miles you can receive when you buy your flight ticket, as well as the boosters that both Virgin and BA offer from time to time. The Miles Booster that Virgin offers lets you buy double the amount of miles that you’re flying from as low as a penny a mile. That’s cheap!
In addition to that, if you have plans for travelling, always keep an eye out for the promotions. On occasions you can find promos running that give you 25% or even 50% free.
Use them and fly
There’s no point in accruing air miles if you’re going to use the channel tunnel to get to Paris for a cosy getaway. The most obvious way to earn air miles is by flying. The more you fly, the more you get back in rewards, but bear in mind that class counts towards how much you get back.
On a standard economy ticket, you’ll get back anywhere in the region of 25% to 50%. Upgrade to First Class and you could be seeing 200% rewards.
A flight from the UK to Paris is approximately 4’300 miles. Travel First Class and you could earn 16’000 miles on a return journey.
It’s certainly worth exploring the offers on air miles before you travel because they are a currency in their own right. You just need to accrue them wisely and spend them on the most beneficial way you can. For outbound from the UK, that’s an upgrade to your cabin seat and not flying cattle class.
Experience first class service for less and explore the world with more money in your pocket.