How to use travel points and miles

Most people earn far more from everyday spending than from flights. A credit card that earns transferable points on groceries, fuel and bills will out-produce a year of occasional flying. The catch is interest: if you carry a balance, the interest dwarfs any points, so this only works if you clear the card each month.

Beyond cards, the steady earners are hotel stays booked direct, car hire through the rental company's own scheme, and shopping portals that pay a small rebate in points. Sign-up bonuses are the single largest lump most travellers ever collect, but they come with a spending requirement and a credit check, and they are only worth taking if you would spend that money anyway.

Buying points outright is occasionally worthwhile when a programme sells them at a deep discount and you have an immediate high-value redemption in mind. It is a bad habit otherwise: you are paying cash for a currency that can be devalued.

Bank and card points are usually the most flexible currency you hold, because they can move into several airline or hotel schemes. Transfers normally happen at a fixed ratio, commonly 1:1 but sometimes 2:1 or with a bonus, and they are almost always one-way: once the points are in the airline scheme, they cannot come back.

That one-way rule is why you check award availability before transferring, not after. Search the airline's own site or call, confirm the seats exist on your dates, then move the points. Transfers can be instant or take several days, so leave a buffer if the seats are scarce.

Alliances and partnerships stretch a balance further. Points in one member airline can often be spent on partner airlines, sometimes at better rates than the programme's own flights. The trade-off is that partner awards frequently carry larger carrier surcharges, which can add hundreds of dollars to a "free" ticket.

An award ticket is not free. You still pay government taxes, airport charges and, on many programmes, a carrier surcharge that scales with the cabin and the route. On some partners a business-class award can carry several hundred US dollars in surcharges, which is enough to wipe out the advantage over a discounted cash fare.

Watch for the smaller charges too: close-in booking fees if you redeem within days of departure, change and cancellation fees, and fees to redeposit points if you cancel. Some programmes waive these for their own elite members, which is one of the few status benefits that pays for itself.

The practical move is to price the award all the way to the final total, in your own currency, before comparing it with cash.

Points are a liability on the airline's books, so programmes expire them. The common pattern is 18 to 36 months without account activity, where any earning or spending resets the clock; some schemes expire on a fixed date regardless. Check your own programme's rule and keep the account alive with a small earn if you are close to the deadline.

Devaluation is the bigger risk. Programmes raise award prices and add fees quietly, so a balance that buys a business-class seat today may buy economy in three years. The defence is simple: hold transferable bank points rather than airline points where you can, and redeem when you have a good use rather than hoarding for a hypothetical future trip.

Status is separate from points. It is earned through flights, segments or spending, and it buys lounge access, extra baggage and fee waivers. If you fly the same airline often, status can matter more than the points balance; if you fly rarely, ignore it.

Not every traveller should chase points. If you fly once every few years, a cash-back card or simply booking the cheapest fare will usually beat a points strategy, because the effort of tracking programmes outweighs the return. If you carry a credit-card balance, stop: interest costs more than any points are worth.

Families and groups hit availability limits. Award seats are released in small numbers, so four seats in one cabin on one date is much harder than one. Splitting the group across two flights, or paying cash for some seats, is often the only workable answer.

Some countries tax or restrict card rewards, and some cards charge foreign-transaction fees that cancel the earning on overseas spending. Check the rules where you live and where you are spending.

Finally, points are not a substitute for travel insurance or for a refundable fare when a trip is uncertain. An award ticket is usually harder to change than a paid one.

The questions below cover the decision, the common mistakes and what to do before you travel.

Programme terms, award charts and fee schedules are published by each airline and hotel scheme and change often; the links below are the starting points for checking current rules. Government consumer and tax pages cover the rules on card rewards where you live.