Earning Miles From Credit Cards
In this section, you'll learn about earning points through credit cards offered in partnership with airline mileage programs, and credit cards that earn their own in-house "travel points".
Let's get started!
There are about a dozen different credit cards in Canada for which your spending will earn airline miles or credit-card loyalty points you can transfer to airline programs.
There are maybe half a dozen more that offer their own brand of "travel points", which can either be redeemed like cash for travel purchases, or redeemed for a lump-sum credit against a flight.
Many of these cards offer a "signing bonus" of a lump sum of points, just for opening a new account.
We'll talk about the airline-branded cards first:
Airline-Branded Credit Cards
In Canada, there are several different credit cards partnered with airline programs; most are tied to Aeroplan, and earn one Aeroplan mile for every dollar you spend. From time to time, different banks offer cards tied to Alaska Airlines Mileage Plan, British Airways' Avios, or Cathay Pacific's Asia Miles.
I generally use one of these as my main credit card, so that my groceries, phone bill, morning coffee etc. are all contributing to my 'vacation fund'.
This can be especially lucrative if you're a business owner, or an employee who is regularly reimbursed for company expenses. A friend of mine who owns a moving company earns a free vacation every year, just from the points earned when his drivers buy fuel.
Credit Cards With Perks At The Airport
Some airline-branded credit cards now include a variety of perks or benefits at the airport, ranging from preferred parking spots (Visa Infinite Privilege) to priority lanes at security checkpoints (Visa Infinite Privilege, American Express Platinum) to priority boarding (CIBC Visa Infinite).
Some high-end premium cards like the American Express Platinum Card also include membership in an airport-lounge program like Priority Pass, which gives access to a variety of privately-run airport lounges all over the world. Note that as with the airport benefits above, these are generally only included with credit cards that carry an annual fee of several hundred dollars, but if you spend a lot of time at the airport, it might be worthwhile.
"Travel Rewards" Credit Cards
Several credit cards offer in-house travel rewards points instead of airline miles; again, you'll generally earn one point per dollar spent.
Some, like American Express' Membership Rewards, can be applied against purchases on your card, or transferred into any of several airline miles programs.
Others, like RBC Avion, give you the choice of transferring your miles to an airline program, or using them on the bank's own award chart. For example, 35,000 Avion points can be used for a flight anywhere in North America.
I generally find the best value comes from transferring these points into a program like Aeroplan or Alaska Airlines Mileage Plan, but to each their own.
Sign-Up Bonuses and "Credit Card Churning"
Many travel-branded credit cards also offer a one-time gift of airline miles when you open a new credit card and reach a spending target. This is generally in the 5,000-25,000-mile range for airline-branded cards offered by banks like TD or CIBC, or, if you go for one of the premium American Express cards, the signing bonus might be worth up to 75,000 airline miles.
There's a group of people known as "churners", who will apply for one of these credit cards, spend just enough to receive the signing bonus, then close the account and open a different card. This technique isn't for everybody; if used correctly, you can build a portfolio of hundreds of thousands of points in a year or two, but if used incorrectly, can cause headaches measured in real dollars, not airline miles.
Many travel bloggers promote this technique as a way you can get a ton of free travel. They're not wrong, but virtually everyone promoting this technique follows it with an affiliate link which gives them a "finder's fee" for referring you to sign up for a new credit card.
Personally, I don't recommend credit-card churning unless you have a very strong credit score, strong financial habits AND a love of spreadsheets and calendars.
What you SHOULD do is occasionally review whatever credit card(s) you're using, and consider whether it makes more sense to switch to a different product. I spend an hour on this every January, and sometimes it makes sense to switch from one card to another and pocket the sign-up bonus.