Sensible Cash: ‘This or That’: Loyalty to One Journey Model or Diversify?

Welcome to NerdWallet’s Sensible Cash podcast, the place we reply your real-world cash questions. 

This week’s episode is a part of our new sequence known as “This or That,” the place the journey group compares other ways to journey.

Try this episode on any of those platforms:

Typically, it’s higher to diversify your factors so that you don’t restrict your choices to just one journey model. The best manner to do that is to make use of a journey bank card with transferable factors, so you possibly can earn factors with one card, however then switch these factors to a number of completely different airline or lodge packages. Make sure that to examine that your bank card’s switch companions are airways or lodges that you simply frequent.

In the event you already journey with one model commonly, it might make sense to start out incomes rewards with that one model extra deliberately. For instance, if you happen to reside close to a sure airline’s hub, you would possibly need to contemplate getting the airline’s co-branded bank card to earn extra miles and get perks like free checked baggage and a quick observe to elite standing. Elite standing can unlock some money-saving perks, akin to complimentary upgrades to enterprise class seats or lodge suites.

In case you are selecting between manufacturers — whether or not it’s to choose one loyalty program, assess switch companions of your new bank card and even simply ebook your subsequent journey — there are a number of elements it’s best to contemplate. Along with availability and pricing, you would possibly need to take into consideration rewards charge and elite standing. NerdWallet used these elements and others to charge the greatest airline and lodge loyalty packages.

Extra about factors and miles and switch companions on NerdWallet:

Sean Pyles: Welcome to the NerdWallet Sensible Cash podcast the place you ship us your cash questions and we reply them with the assistance of our genius Nerds. I am Sean Pyles. The previous couple of weeks in our “This or That” journey sequence, we have talked about when to spend factors and find out how to earn them with a journey bank card.

However one vital query stays: Must you keep loyal to 1 lodge or airline, or diversify your factors recreation? Journey author Elina Geller is right here in the present day that will help you determine your factors technique. Elina, thanks for being right here.

Elina Geller: Thanks for having me.

Sean Pyles: Earlier than we get into this dialog, a fast disclaimer that we will discuss just a few bank cards on this episode which might be NerdWallet companions, however that doesn’t have an effect on how we discuss them. OK. Properly Elina, first off, the place do your loyalties lie? Are there any journey manufacturers that you simply’re particularly loyal to?

Elina Geller: Sure. I am loyal to United as a result of I’ve United Silver standing, and I really feel like I get numerous perks out of that. Lots of people assume that Silver standing, which is the bottom stage, is so insignificant, however to me it is large.

Sean Pyles: What do you get from that?

Elina Geller: So I get a free checked bag as much as 70 kilos, however I really feel like my bag is at all times weighing greater than 50 kilos, similar to a persistent overpacker. In order that additional allowance that I get from my standing saves me some huge cash. The opposite factor is, when you’ve Silver standing, 24 hours earlier than the flight — so, principally once you’re in a position to examine in — you would choose a free Financial system Plus seat, and people seats are often near the entrance of the airplane. They’ve extra leg room. They’re, basically, simply extra snug and extra spacious, and I like these seats and I do not like paying for issues, as .

So it is simply one other manner for me to get one thing without spending a dime, though I clearly needed to spend cash to realize the standing.

Sean Pyles: And also you journey internationally actually often, staying at one location for a month, one other location for a month. So that you type of have to convey all of that stuff, 70 kilos value of stuff with you.

Elina Geller: Precisely. Not solely do I journey lots like this, but in addition I am an overpacker as a result of I wish to convey all my toiletries with me and my blow dryer. So all this stuff weigh lots, and plus having garments for various climates. I really want that additional baggage allowance.

Sean Pyles: I’m a loud and proud overpacker, so I can utterly relate. However anyway. Are there another manufacturers that you simply’re particularly loyal to?

Elina Geller: Sure, Hilton, as a result of I’ve Diamond standing as a result of I’ve the Hilton Aspire card, and I really feel like I get numerous worth out of that as a result of clearly you get the free breakfast and in addition each time I keep at a Hilton property, I get a very nice improve to even a collection, the very best rooms, as a result of it is the best stage standing and I simply really feel very nice once I keep at these properties. So positively Hilton Diamond.

Sean Pyles: One factor we should always in all probability make clear is that with a purpose to get these completely different ranges of standing, you do not have to purchase them essentially, however you do should spend a sure sum of money with these firms to realize that stage. It is not such as you’re saying, “I need to spend 100 bucks to get Diamond standing.” It is extra cumulative primarily based on the way you spend cash with these manufacturers.

Elina Geller: It relies upon. Hilton Diamond you get simply from holding the Hilton Aspire bank card.

Sean Pyles: Attention-grabbing. All proper. Properly, it looks as if you’ve various manufacturers that you simply’re loyal to. I might see some folks wanting to stay to only one model’s program, one model’s factors system. What are among the causes that you’d suggest possibly staying loyal to a single model versus many?

Elina Geller: Since you might proceed to earn your factors with that particular model. So for instance once I fly with United, numerous instances I take advantage of my factors as a result of I’ve a complete technique for this. Clearly, I at all times fly in first or enterprise class once I’m flying internationally, however once I fly domestically, if it is a quick flight, then I often will fly in economic system, and numerous instances I am going to simply pay for it in money versus utilizing factors as a result of I’ve United TravelBank credit from completely different bank cards, and basically, I’ve credit nonetheless remaining from once I needed to cancel flights due to COVID.

So I am making an attempt to cut back these credit as a result of these expire quickly. So once I’m shopping for economic system tickets, that additional baggage allowance and that free seat choice are perks, however as well as, I am incomes miles on that flight. So I really feel like by having loyalty to a selected airline and even lodge, it is cumulative, proper? You get clearly the perks that your standing affords you, but in addition your loyalty to them lets you proceed to build up factors and miles with that program.

Sean Pyles: It looks as if it might even be lots simpler to maintain observe if you do not have to fret about, “Am I getting factors for this firm this time or this one the subsequent time?” You simply know that you simply’re typically working with the identical system and may proceed to construct up factors and use these factors as you store and do no matter with them.

Sean Pyles: OK. Properly, are there any cons to being loyal to only one program?

Elina Geller: In the event you’re loyal to 1 program, you possibly can pigeonhole your self as a result of if you happen to solely have factors with one program, you might not be capable to fly with different packages’ factors. However to illustrate you are dwelling close to an airport, and Delta is the native airline and it flies to all of the locations you need. So that you earn and redeem factors with Delta and you’ve got a Delta bank card. If that’s your predominant bank card, what occurs if in the future you need to journey someplace and Delta does not fly there? Or it prices so many factors, you are out of choices? So, this is the reason folks must be diversified, but in addition having loyalty is vital.

Sean Pyles: You need to give your self some flexibility so you’ve extra choices, however you additionally need to have the ability to navigate these programs in a manner that works for a way you employ them.

Elina Geller: Yeah, precisely.

Sean Pyles: So Elina, do you assume one route is healthier? Perhaps specializing in one card or taking the extra diversified method?

Elina Geller: I believe it is positively higher to diversify as a result of getting a transferable level bank card goes to present you numerous perks — crucial perks with the ability to switch your factors to airways and lodges. So instantly, that is going to present you a lot extra choices than, to illustrate, if you happen to would have one thing just like the United bank card, which is just going to permit you to earn factors with United.

Sean Pyles: Are there any downsides to that method although?

Elina Geller: So the factor is, once you get a transferable level bank card, you are not going to get particular perks for that airline. So for instance, to illustrate you’ve the Chase Sapphire Reserve. In order that card earns 3 factors per greenback on journey and eating. One of many massive perks is with the ability to switch your factors to airways and lodges. However with the United Explorer card, sure, you are going to earn additional factors with United, however then you definitely’re additionally going to get a free checked bag. You are not going to get that free checked bag with the Chase Sapphire Reserve.

So I might say if you happen to’re very loyal to 1 airline, it may very well be an excellent technique to even have that co-branded card along with having a normal bank card. So you would get perks for touring with that airline.

Sean Pyles: And a co-branded card is like one that you simply talked about, the United Explorer card, and that is only a bank card put out by United. Individuals get affords for these from the flight attendants once they’re about to land, proper? Individuals come round and provide software pamphlets?

Elina Geller: Sure, precisely. However that is not the place you have to be getting your bank card software in, until it is essentially the most superb provide.

Sean Pyles: Are you able to elaborate on that just a little bit? Why should not of us apply then and there? They make it sound fairly engaging typically once you’re on the flight.

Elina Geller: It simply actually relies upon. It’s important to examine and see if that is the very best publicly out there provide. Typically there may very well be a restricted time provide that is out there on-line and possibly what they’re handing out on the airplane is only a completely different software. So possibly the bonus goes to be decrease on the airline, possibly it should be greater. It actually relies upon.

So I might simply say making use of on the airline, possibly that is one thing solely it’s best to do if you’re very acquainted with the present sign-up bonus and if you happen to see one thing that is utterly excellent.

Sean Pyles: And if you happen to’re not, possibly use that pamphlet as a part of your analysis, however do not be pressured into making a call and making use of proper then and there.

Sean Pyles: OK. Properly, even selecting a journey bank card with transferable factors includes a point of name loyalty as a result of not all bank card packages have the identical switch companions.

Elina Geller: There may be some overlap between among the packages. So for instance, Marriott is a switch companion of each AmEx and Chase, however there’s additionally different airways which might be distinctive. For instance, Southwest is just a switch companion of Chase.

Sean Pyles: Properly, are there any firms, lodges, airways, that are not switch companions with any of the bank card packages?

Elina Geller: Sure, there are. Not each single airline and lodge goes to be a switch companion. So earlier than you determine to use for a transferable level card, try the record of switch companions to see which of them align together with your travels. For instance, American Airways is an instance of an airline that isn’t a switch companion of any of the packages. So if you happen to’re making an attempt to get American Airline miles, you may should get an American Airways bank card.

Sean Pyles: So it feels like it doesn’t matter what, you’ll have to do some analysis of manufacturers. What ought to folks contemplate once they’re in search of a model to be loyal to?

Elina Geller: So the very first thing is comfort. Which airways have numerous flights out of your native airport? As an instance you are JetBlue, however then JetBlue does not fly out of your native airport to the locations that you really want. That is not going to be an airline for you. So first simply take a look at what airline has a hub the place you are flying out of.

Sean Pyles: OK, and what else ought to folks take note? Perhaps for lodges?

Elina Geller: For lodges, additionally availability, as a result of the type of lodges that you simply keep at matter when it comes to what bank card you’d need to get to remain at these lodges. So to illustrate you actually like staying at Hiltons, proper? You’d in all probability need to get a bank card that earns Hilton factors or if you happen to actually like Marriott’s properties, possibly it is sensible to get a Marriott bank card.

So the type of properties that you simply like to remain at. And likewise, the lodge manufacturers individually are completely different, and in addition not all lodges are positioned in all completely different locations. So for instance, to illustrate you actually like staying at boutique lodges, properly, your choices are going to be completely different than if you happen to choose to remain at chains.

Sean Pyles: I used to be going to ask about boutique lodges as a result of some folks need to keep at them versus bigger chains. Can they entry packages, rewards like this for boutique lodges by means of their bank cards? Or is that not a lot an possibility?

Elina Geller: Some, but it surely actually relies upon if that boutique lodge participates in this system. For instance, there’s AmEx Fantastic Motels + Resorts. There’s additionally Small Luxurious Motels. These lodge teams permit some impartial properties to take part inside them. So possibly that is a manner so that you can get some loyalty out of that, but it surely actually simply relies upon.

Sean Pyles: Elina, how do you assume issues like rewards charge and elite standing perks come into play when persons are purchasing round?

Elina Geller: So my group truly checked out all this stuff like elite standing perks and rewards charges once we did our greatest ofs this 12 months. So you would discover all of these scores on the NerdWallet web site.

Sean Pyles: We’ll have a hyperlink to that within the present notes submit at nerdwallet.com/podcast. OK, and in order that covers lodges. What do you assume folks must be in search of once they’re contemplating an airline to companion with probably?

Elina Geller: So I believe availability at your house airport and in addition how simple and low cost it’s to redeem factors. So for instance, I am from New York, and there is many airways that select JFK and Newark and LaGuardia as their residence airports. But when I had been to match two of the massive airways which might be in New York — United and Delta — I select United as a result of I believe the redemption charge for award tickets is a lot better than Delta, which has ridiculously excessive redemption charges.

Sean Pyles: However we already talked about getting a journey bank card as a method to diversify factors, however is there a manner to make use of bank cards in case your objective is loyalty to 1 airline or lodge?

Elina Geller: Sure, completely. Getting co-branded bank cards. So for instance, I’ve the Hilton Aspire card, so if I ever keep at a Hilton, I’ll cost every thing to my room after which use my bank card to settle the invoice as a result of I am additionally going to be incomes additional factors for utilizing that bank card at a Hilton property.

Sean Pyles: OK, one other query for you. Typically when you are going to ebook a flight by means of your most popular model, you may discover that the flight or the lodge or no matter goes to be costlier than if you happen to went with another choice. When do you assume it might be value it to ebook that costlier possibility, though it is simply the model that you simply’re loyal to?

Elina Geller: So that is one thing that I really feel like I face fairly usually. As a result of to illustrate I need to keep someplace and possibly I need to pay as a result of paying goes to be cheaper than utilizing factors as a result of it is not such an excellent redemption charge however on the similar time, possibly paying to remain at, to illustrate, that Hilton property and even getting the free breakfast and the improve remains to be going to value me extra if to illustrate I stayed a comparable property that isn’t affiliated with Hilton or anybody else.

So I really feel like this might occur and you actually simply should do the maths and see what is sensible for you as a result of sure, if I keep on the cheaper property, however then if it does not have free breakfast, I’ll should pay to take myself out to breakfast. So these are type of all of the issues that it’s essential to take into accounts.

Sean Pyles: And typically the comfort of going with the model that you simply’re loyal to could be value it.

Elina Geller: It may be, but in addition on the flip aspect, possibly it is not value it as a result of, sure, you are going to earn some additional factors out of that, but when it should value you some huge cash to earn these additional factors, it might not make sense. So once more, it is simply on a case-by-case foundation.

So then one other factor to remember once you’re evaluating these choices is are you making an attempt to go for elite standing with the lodge or with the airline? As a result of to illustrate you are near incomes standing otherwise you’re near reaching the subsequent stage of standing — that is one thing that it’s essential to contemplate as a result of if staying at that lodge or taking that flight, that may very well be barely costlier than the competitor goes to get you nearer to that standing or goes that will help you obtain that subsequent stage of standing, then that clearly is value extra than simply saving some cash.

Sean Pyles: OK. So you need to take into consideration your particular person circumstances and targets proper now.

Elina Geller: All the time, yeah.

Sean Pyles: Nice. Properly Elina, thanks for sharing your entire insights with us. Are you able to inform us your takeaway ideas, please?

Elina Geller: Yeah. So first, know the trade-offs. Clearly if you happen to keep loyal to 1 model that is going that will help you earn factors and elite standing quicker, however it might restrict your choices. You might not have sufficient factors to fly with different airways or keep at different lodges. In order that’s why you need to give your self flexibility — which is my second takeaway tip — is to have a bank card that earns transferrable factors as a result of you possibly can switch these factors to a number of airways and lodges.

And I might say my third level can be to know that loyalty packages are designed to incentivize you to stay with that model. So understand that any rewards that you simply’re incomes, they might be value lower than the cash you are spending to earn that reward. So once more, simply do the maths and ensure it is sensible for you.

Sean Pyles: All proper. Thanks a lot, Elina.

Elina Geller: You are welcome. Thanks for having me.

Sean Pyles: And that’s all we’ve for this episode. You probably have a cash query of your individual, flip to the Nerds and name or textual content us your questions at 901-730-6373. That is 901-730-NERD. You may as well e mail us at [email protected] Go to nerdwallet.com/podcast for more information on this episode. And bear in mind to comply with, charge and evaluate us wherever you are getting this podcast.

This episode is produced by Meghan Coyle. We had enhancing assist from Tess Vigeland and me, Sean Pyles. Kaely Monahan blended our audio and a giant thanks to the professionals on the NerdWallet copy desk.

Right here is our temporary disclaimer. We’re not monetary or funding advisors. This nerdy information is supplied for normal academic and leisure functions and will not apply to your particular circumstances. And with that mentioned, till subsequent time, flip to the Nerds.