How to Earn and Spend Your Miles Efficiently

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Many people in the points and miles community know that keeping track of point balances and when they expire is very important. I wrote about how to keep track of points in this article. They also know how to optimize point earning by remembering what credit card to use for various shopping trips (bonus category spend). However, there is one critical requirement that makes all this effort worth the time. No matter how much you optimize credit card usage, unless you have a comprehensive plan on how to spend the miles, you are wasting your time.

Case in point, let’s say that you are maximizing spend on your United MileagePlus credit card and purchasing a flight using that card. However, you already have enough miles for your upcoming trip and since you just moved to a Delta hub, you are no longer planning to use UA miles going forward after this trip. Congrats, you just banked orphaned miles that you will likely never use.

Value of miles = 0 CPM.

That purchase you just made was not optimized even though technically, that may have been your highest earning card for that particular spend.

Incremental purchases that move you towards a goal is going to be worth more (incremental value). Say your current balance was 22,000 points and you make a purchase to get you to 25,000 points, enough miles for a round-trip flight. That last purchase was very valuable because there is a gating factor in how you can use those miles. Likewise, the diminishing returns on additional points after redemption breakpoints are steep. I would consider them null (and even negative sometimes, since they may alter your purchasing habits by putting you in a situation where you may need to top-off/liquidate orphaned points).

This highlights the need for a comprehensive plan:

  1. Know where you want to go and how many miles it takes to get you there.
  2. Have a system that keeps track of your miles.
  3. Map that system to your goals/breakpoints.
  4. Create a purchasing matrix that aligns with the breakpoints.
  5. At the point of purchasing decisions, follow your matrix.

Know where you want to go and how many miles it takes to get you there

Do you want to go from LAX to TPE (or any two locations)? Follow the workflow in this trip report. Do an award search on your airline of choice and determine the cost.

Have a system that keeps track of your miles

Whether it is an excel spreadsheet, Award Wallet, or Trip It Pro, have a system. If you are getting started, you can read a review of the various systems here.

Map that system to your goals/breakpoints

This is what separates novice travel hackers from the experienced ones. Overlay your Trip It Pro data with your goals. How might you do that?

  • Maybe you can set up an API that moves the point information into excel.
  • Maybe you can create a Tableau dashboard that maps the information and visualized how close you are to your goal.
  • Maybe you can piece together an IFTTT text alert when you are close to the goal, so you can prepare to switch credit cards upon reaching the breakpoint.

Create a purchasing matrix that aligns with the breakpoints

Now consolidate the system created in the step above to your purchasing workflow. What do you buy the most? Groceries, travel, restaurant? Map the purchase to the credit card to use. Then, put the matrix in the notes app on your smartphone.

At the point of purchase, follow your matrix



Top take away: know the award breakpoints in your inventory and shift spend accordingly. In the absence of this strategy, I recommend using cash back cards until you have a strategy in place. Point and mile programs are very powerful, but you yield maximum power when you are most clear about the end goals.

What do you think about this post? Do you have orphaned points as a result of an incomplete strategy?