Baffled by Points and Miles? Let the 80/20 Rule Guide You

Jun 24, 2019
Baffled by Points and Miles? Let the 80/20 Rule Guide You

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Dealing with points and miles can be overwhelming. Asking a simple question like “How should I use my Delta miles?” can send you down a Google rabbit hole of points-maximization madness. Many would-be reward travelers simply give up in the face of this complexity.

Unfortunately, much of the information online emphasizes squeezing every fraction of a cent's worth of value from your points. That might be a helpful strategy for dedicated travel nerds, but it's TMI for the average traveler.

Most of the value from a given reward program can be reaped by simply understanding the basics. That’s the 80/20 rule in action.

What is the 80/20 rule?

The 80/20 rule, or Pareto principle, states that 80% of the effects in a given situation come from 20% of the causes. Originally developed by an Italian economist to describe wealth inequality, it has been expanded to other areas such as business and personal productivity.

Practically speaking, following the 80/20 rule means two things:

  1. Focus on the 20% of information that matters most.

  2. Ignore the 80% that doesn’t (i.e., don’t sweat the small stuff).

This applies to personal finance generally, where it’s easy to get lost in the weeds. But it’s especially important in the world of travel rewards, because many of us don’t even know where to start.

Find your 20%

Everyone has different points, miles and travel goals, so there’s no “one size fits all” advice for finding the universal 20% of information that yields 80% of the value.

That said, here are some principles for figuring out what matters most to you:

  • Pick one program to start. Already have a stash of miles with one airline? Or points from a travel credit card? Learn the basics of that program rather than trying to learn everything about every program all at once.

  • Learn a few good tricks. Familiarize yourself with a few “good redemptions” for that program to see what works (and doesn’t). For example, if you’re working with the Marriott Bonvoy program, find examples of high-quality redemptions to get a sense of what the pros are doing with their Bonvoy points.

  • Err on the side of redeeming. The biggest mistake travelers make is simply not using their points and miles while they wait for the “perfect” redemption. This is like not buying lunch because you’re waiting for the “perfect’ deal.

Avoid the 80%

Don’t want to bother learning the difference between things like elite qualifying miles and elite qualifying dollars? Good news: The 80/20 rule encourages (strategic) laziness. The trick is figuring out what can be safely ignored.

Here are some starting places:

  • Avoid first- and business-class awards (to start). Showering at 35,000 feet for “free” on your points and miles might sound appealing, but booking these awards takes gobs of points, expertise and time. Once you’ve mastered the basics, you can move on to these more ambitious bookings. In the meantime, enjoy the land behind the curtain.

  • Don’t worry too much about hotel loyalty. With certain exceptions, only business travelers stay in hotels enough to get much value from hotel loyalty programs. The Capital One / Hotels.com “loyalty” program is simple and valuable alternative.

  • Don’t buy points and miles. Even with splashy “double miles” promotions, it’s almost never worth it to buy points and miles directly without having a specific redemption in mind.

Simplify, simplify, simplify

Travel loyalty programs are designed to be confusing in order to keep you in analysis paralysis. Don’t let that stop you. Start applying the 80/20 rule with your reward travel plans today: Pick out a loyalty program you care about, learn the basics and make your first booking.

Simply using your points and miles instead of sitting on them will put you ahead of 80% of the pack.


How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2022, including those best for:

partner offers

Chase Sapphire Preferred® Card
60,000 Bonus points offer - Terms Apply
Wells Fargo Autograph℠ Card
New! Earn a 30,000 bonus point offer - Terms Apply
Bank of America® Travel Rewards credit card
25,000 online bonus points offer - Terms Apply

Partner offers

Chase Sapphire Preferred Credit Card

Chase Sapphire Preferred® Card

With a $95 annual fee & an outstanding sign up bonus, this card is a great option, especially if you transfer points from other Chase cards
APPLY NOW

on Chase's website

Highlights:
  1. Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®
  2. Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5X on travel purchased through Chase Ultimate Rewards®, 3X on dining and 2X on all other travel purchases, plus more
  3. Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel
  1. Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®
  2. Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5X on travel purchased through Chase Ultimate Rewards®, 3X on dining and 2X on all other travel purchases, plus more
  3. Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel
APPLY NOW

on Chase's website

Wells Fargo Autograph℠ Credit Card

Wells Fargo Autograph℠ Card

Earn unlimited points on all purchases and 3X points in a host of common spending categories. With a great bonus offer as well, this card offers so much value, all for no annual fee
APPLY NOW

on Wells Fargo's website

Rates & Fees
Highlights:
  1. Earn 30,000 bonus points when you spend $1,500 in purchases in the first 3 months - that's a $300 cash redemption value
  2. Earn unlimited 3X points on the things that really add up - like restaurants, travel, gas stations, transit, popular streaming services, and phone plans. Plus, earn 1X points on other purchases
  3. $0 annual fee
  1. Earn 30,000 bonus points when you spend $1,500 in purchases in the first 3 months - that's a $300 cash redemption value
  2. Earn unlimited 3X points on the things that really add up - like restaurants, travel, gas stations, transit, popular streaming services, and phone plans. Plus, earn 1X points on other purchases
  3. $0 annual fee
APPLY NOW

on Wells Fargo's website

Rates & Fees
Bank of America Travel Rewards® Credit Card

Bank of America® Travel Rewards credit card

This card makes its bones with simplicity and value: solid rewards on every purchase for an annual fee of $0
APPLY NOW

on Bank of America's website

Highlights:
  1. Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire
  2. 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases
  3. Use your card to book your trip how and where you want - you're not limited to specific websites with blackout dates or restrictions
  1. Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire
  2. 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases
  3. Use your card to book your trip how and where you want - you're not limited to specific websites with blackout dates or restrictions
APPLY NOW

on Bank of America's website

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