Rewards Points are like Frequent Flyer Miles only you obtain Rewards Points through credit card promotions and offers. If you want to really get the most Rewards Points you possibly can, and if you really want to get the most out of the points you accumulate, then you need to commit to the process and do more than snag a couple hundred miles here and there using your mileage credit card to buy your groceries and stuff.
Most prices in life aren’t quite as fixed as you think they are, and that’s true whether your spending dollars or Rewards Points. It’s worth taking a couple minutes to try and negotiate down the number of points you need to snag an international flight, even if your airline ultimately won’t play ball. It is still worth a try because sometimes, they will agree.
Here’s how you do it.
First, you (obviously) can’t negotiate the Rewards Points price of your desired ticket online. There’s no box you can check when paying for your flight that states “click here if you want to pay less.” Instead you will need to talk to a real, live ticketing agent.
Every Rewards Points system has a toll-free number you can call to setup your ticket. Call yours and ask if you can receive your desired ticket for fewer rewards points than they advertise. If the first person you talk to says “no” and won’t succumb to a little cajoling, then hang up then call back. The chances are slim that you will get the same person when you phone back and the new ticketing agent may be more cooperative. Repeat this process until someone picks up who is willing to help you.
A few finer points to negotiating for lower Rewards Points rates:
The thing is, airline ticket prices are a lot more fluid than you might think. Also, airline ticketing agents are surprisingly empowered. It doesn’t hurt to ask and all you have to lose is 15 minutes out of your day.
Making unnecessary purchases on your Rewards Points credit cards just to increase your mileage balance is not smart.
While receiving Rewards Points through your credit cards on purchases you’d normally make is a fine way to accumulate points, the actual exchange rate on what you spend compared with what you get is unbelievably bad. When you consider the standard $1-to-1-Reward-Point ratio, and you then run the math on how many Rewards Points and dollars spent, you need to fly internationally you’ll be lucky if you end up with even a 1% return on your expenditures. You’d do better investing in collectable coins or stamps than spending an unnecessary $80,000 to get a free ticket that would only cost you $1,000-$2,000 to purchase with cash.
However, there are certain intelligent, yet still absolutely unnecessary, expenses you can make using your credit cards for the sole purpose of earning points. The process we’re about to talk about is referred to as “recycling” and is used by many of the more hard-core rewards points junkies out there. Yet unlike many of the esoteric strategies you’ll find employed by devoted bargain hunters “recycling” takes very little time and effort.
With recycling you might pay a very small amount of fees, but the process is generally 100% free (and 100% legal for those who tend to worry).
First, you want to choose the card you’re going to use to recycle points. You can recycle on multiple cards at once but I don’t recommend doing so for absolute beginners. If you’re just starting out recycling you want to play it safe. Besides, it’s generally a bad idea to max out all of your credit cards all at once. Starting out with one card at a time is a great way to learn the process without expending all your financial resources in one go.
Next, you want to purchase products that act like cash, but which you can buy with a credit card. No, I’m not saying you should buy gold bullion with your rewards card and then immediately sell them back to the market. When I say “products that act like cash” such as pre-paid/pre-loaded Visa® and MasterCard®. These function identically to normal credit cards, they simply have a cash balance on them whose size depends on how much cash is loaded onto the card you purchase.
After you receive your pre-paid/pre-loaded card, use it to purchase either travellers’ checks or a postal money order equal to the amount you put on the gift card. So if you used your credit card to buy a $2,000 pre-paid/pre-loaded card you would then use the $2,000 gift card to purchase a $2,000 money order. After you receive your money order all you need to do is deposit it into your bank account and then use the cash to pay the balance you accumulated on your credit card before interest is added to your account balance.
It’s a simple, elegant, and totally effective system that, depending on your credit limit, can help you accumulate a large volume of free miles in a very short period of time, all without spending more than a couple dollars in processing fees on your money order.
However, before you engage in recycling it’s a good idea to perform a Google search to make sure the card you’re going to use in the process won’t penalize you for any step in the process. You use recycling at your own risk; and while the banks and airlines would never actively endorse recycling, I’ve never heard of anyone getting in trouble for gaming the system like this. Still, spending 15 minutes looking through Google, rewards points forums, and your credit card’s terms and agreements is simple insurance worth taking before you start reaping the rewards of Rewards Points recycling.