The following is an excerpt of a paper that Rocco Pallante wrote to introduce his family to “The Mileage Game” (pdf). While offers and personal needs will vary over time, Rocco’s article and these posts should be a helpful guide for those who want to earn free flights. Warning: Don’t play if you aren’t paying off your credit cards every month.
Choice of Airlines and Reward Programs: Some cards are tied to a specific airline, which is called “co-branding,” and your miles are automatically transferred to your frequent flier account each month (e.g., Chase United MileagePlus Explorer, Amex Delta SkyMiles, etc.).
With other cards, the points are treated almost as currency, and the bank strongly encourages you to use those points to buy travel or merchandise directly through their website. Examples include Chase Ultimate Rewards (CUR), Citi ThankYou Points (CTY), Capital One Rewards (COR), and American Express Membership Rewards (AMR). However, when you use the points as “currency,” they usually give you an exchange rate of 0.5 to 1.5 cents per point, which I consider a pretty poor exchange rate.
Fortunately, with the exception of COR, you also have the option of transferring these points to several different airlines. You can get more value by transferring the points to an airline, and then booking an award seat through the airline. [Note: COR recently added transferring options as well, but the transfer ratios still appear to be generally poorer.]
Vagabond Finances notes that COR recently added transferring options as well, but the transfer ratios still appear to be generally less generous.
When you earn CUR, CTY, or AMR points, they stay with the card until you decide to transfer them to a specific airline, which you can do incrementally or all at once. In general, you should leave the points in place until you are ready to redeem them through an airline, since you may not know which airline you are going to fly. However, occasionally a card will offer a transfer bonus, and that can be a great time to move the points. For example, you can usually convert 1,000 AMR points to 1,000 Delta Miles, but sometimes they will offer a 25% bonus, so you can get 1,250 miles for the same 1,000 AMR points. You should jump on these opportunities.
Collect Miles in Useful Increments: If you follow my plan for accumulating miles, you will end up with miles in multiple frequent flier programs, and probably in the names of multiple family members. Since you cannot combine miles from multiple frequent flyer accounts (without paying onerous fees), you should try to accumulate miles in each account in sufficient increments to be useful given your own travel needs.
For example, the Chase Sapphire card will give you 50,000 bonus miles that you can transfer to any number of airlines. If you only fly domestically, then 50,000 miles is a useful increment, as you can get two roundtrip tickets for 50,000 miles. However, if you want to fly business class to Europe on United, you will need 60,000 miles for a one-way ticket. Thus, after you earn your 50,000 bonus miles, you should keep using this card until you have at least 60,000 miles in your UA account. On the other hand, there is little benefit to going over this level, say to 65,000 miles, because you cannot really use the extra 5,000 miles, unless you plan to keep spending to reach the next useful increment.
For my own accounts, I am content to continually accrue more miles. However, when I establish a new account in the name of my mother, or one of my daughters, I am cognizant of achieving useful increments.
Expat Advice: Our flights often tend to be between a hub in the USA where most of our American ties are and a hub in our host country. We will want to familiarize ourselves with the airline(s) that best serve our needs and then focus on points that are useful on that airline. Remember, that most major carriers are part of an alliance. It is often cheaper to use award miles through a partner airline in the alliance (like Singapore, Virgin, or Turkish) rather than through the airline that runs the flight we want. That’s why earning points like UR, CTY, UMR, and even COR can be better than earning points on United, Delta, etc. We keep our points with our credit card, find the cheapest award flights available on ANY airline in the alliance we want to fly, and then see if we have points that we can transfer to the airline giving us the best value. .