August 15, 2014
The best way to fly, of course, is to redeem points and miles to travel for free. Often, though, that’s not practical. Maybe award seats are not available. Maybe your travel is work-related and expenses will be reimbursed. Maybe the price of the airfare is low enough to make redeeming miles a bad deal. Maybe you simply don’t have enough points or miles. Maybe you’re inches from the next airline elite tier and need those extra paid flight miles to push you over…
Whatever the reason, it often makes sense to pay for airfare with a credit card rather than with points. When you do, you might as well earn lots of extra points and miles along the way. The key is to use the best online shopping portal option and the best credit card…
Online Shopping Portals
Shopping portals offer a way to earn extra points or miles (or cash back) when buying things online. While most people turn to portals for buying merchandise, they can also be used to buy flights, book hotels, etc.
Currently, the best portal options I’m aware of for buying flights, is through the Chase Ultimate Rewards Mall and Barclays RewardsBoost portal (logged in with an Arrival card).
Both portals offer 3 miles per dollar for shopping at Hotwire.
Who knew that Hotwire offered airfare? Well, they do. Here is the Hotwire description that is identical in both portals (bolding is mine):
Hotwire.com is a leading discount travel site with low rates on airline tickets, hotel rooms, rental cars and vacation packages. Launched in 2000, Hotwire, Inc. obtains deep discounts from its travel suppliers to help travelers book unsold airline seats, hotel rooms and rental cars.
And, note that the terms and conditions do not exclude airfare:
Not eligible on purchases made with coupon or discount codes that are not found on this site. Eligible when travel is completed and reservation has been fulfilled. Only the price quoted is eligible. Additional fees, including airline fees, are not eligible.
To be clear, I haven’t yet tested this option and I’ve never bought airfare from Hotwire so I don’t know if there are any “gotchas” but I would be surprised if there are any major problems.
Tip: When shopping through the Chase portal, log in to your Freedom account if you have both a Chase Freedom card and a Chase checking account. This way you’ll earn an additional 10% bonus on all points earned with that account each year. So, the portal 3X becomes 3.3X. You can still pay with your Sapphire Preferred card, if you have one, to earn 2X on that card as well.
Credit cards vary in the rewards they offer for travel purchases. Most airline branded credit cards offer 2X when buying flights from them, but you will not get 2X when making a purchase through an online travel agency like Hotwire. Personally, I wouldn’t give up 3X portal miles for an extra 1X from my credit card, so lets agree that airline branded cards are not the best option.
Some non-airline branded credit cards offer rewards when purchasing flights directly from airlines. Examples include the PenFed Premium Travel Rewards card that offers 5X (which is equivalent to a 4.25% rebate), and the Amex Premier Rewards Gold and Business Gold cards that offer 3X. Those are both good options when skirting portals, but you can do better…
The best credit card options when combined with a portal, in my opinion, are:
- Citi Prestige Card: Offers 3 Thank You points per dollar with airlines, hotels, and travel agencies. Thank You points are worth up to 1.6 cents per point when used towards airfare on US Airways or American Airlines. Points can also be transferred to a number of airline programs.
- JCB’s Marukai card: Offers up to 3% cash back on all purchases (1% cash back on your first $1K of purchases, 2% cash back on the next $1K of purchases, and 3% cash back thereafter each year. Earn an addition $50 bonus when you spend $5K or more yearly). Unfortunately, you must be a resident of Hawaii, California, Nevada, Oregon or Washington to get this card.
- Chase Sapphire Preferred Card: Offers 2X on all travel. Plus, if you obtained your card before 8/31/2014 you will earn a 7% dividend on all points earned for the rest of 2014 and 2015. So, this card earns 2.14X for a limited time for those who qualify.
- BarclayCard Arrival: Offers 2X on all travel. Points are worth 1.1 cents each thanks to the 10% rebate on travel rewards, so 2X is worth 2.2%.
- BarclayCard Arrival Plus: Offers 2X on all purchases
- BOA BankAmericard Privileges with Travel Rewards: Offers 2X on all purchases plus 10% bonus if you have a qualifying BOA account.
- Fidelity Investment Rewards Amex: Offers 2% cash back on all purchases.
You’ll find more good options here: Best rewards for everyday spend.
5X or more
By combining 3X portal earnings with at least 2X credit card earnings, you can consistently earn 5 points/miles per dollar, or more, when buying airfare. This is in addition to the miles earned from flying.