Smart Money: ‘This or That’: Loyalty to One Travel Brand 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 referred to as “This or That,” the place the journey crew compares other ways to journey.

Try this episode on any of those platforms:

Usually, it’s higher to diversify your factors so that you don’t restrict your choices to just one journey model. The best means to do that is to make use of a journey bank card with transferable factors, so you may earn factors with one card, however then switch these factors to a number of totally different airline or resort applications. Be sure that to verify that your bank card’s switch companions are airways or motels that you just frequent.

In case you already journey with one model commonly, it might make sense to start out incomes rewards with that one model extra deliberately. For instance, when you dwell close to a sure airline’s hub, you may wish to think about getting the airline’s co-branded bank card to earn further miles and get perks like free checked luggage and a quick observe to elite standing. Elite standing can unlock some money-saving perks, similar to complimentary upgrades to enterprise class seats or resort suites.

In case you are selecting between manufacturers — whether or not it’s to select one loyalty program, assess switch companions of your new bank card and even simply guide your subsequent journey — there are a number of components it is best to think about. Along with availability and pricing, you may wish to take into consideration rewards fee and elite standing. NerdWallet used these components and others to fee the greatest airline and resort loyalty applications.

1. Know the trade-offs: Staying loyal to 1 model might help you earn factors and elite standing sooner, however it might restrict your choices. In case you do wish to decide to a program, search for the very best availability and pricing for the locations you frequent and your private home airport.

2. Give your self flexibility: Getting a bank card with transferable factors can provide you extra choices with the journey firm you employ. Be sure that the switch companions are ones you’ll probably use.

3. Perceive the sport: Loyalty applications are designed to incentivize you to stay with one model. Observe that the rewards you get, whether or not it’s factors or a free drink, are sometimes value a lot lower than the cash you spent to earn the reward.

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 tips on how to earn them with a journey bank card.

However one essential query stays: Must you keep loyal to 1 resort or airline, or diversify your factors recreation? Journey author Elina Geller is right here right this moment 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 a couple of bank cards on this episode which are 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 just’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 a variety of perks out of that. Lots of people suppose that Silver standing, which is the bottom degree, is so insignificant, however to me it is enormous.

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 all the time weighing greater than 50 kilos, identical to a power 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, mainly once you’re capable of verify in — you may choose a free Financial system Plus seat, and people seats are normally near the entrance of the aircraft. They’ve extra leg room. They’re, usually, simply extra snug and extra spacious, and I really like these seats and I do not like paying for issues, as you understand.

So it is simply one other means for me to get one thing without spending a dime, despite the fact that I clearly needed to spend cash to attain the standing.

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

Elina Geller: Precisely. Not solely do I journey quite a bit like this, but additionally I am an overpacker as a result of I prefer to convey all my toiletries with me and my blow dryer. So all this stuff weigh quite a bit, and plus having garments for various climates. I actually need that additional baggage allowance.

Sean Pyles: I’m a loud and proud overpacker, so I can fully relate. However anyway. Are there some other manufacturers that you just’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 a variety of worth out of that as a result of clearly you get the free breakfast and likewise 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 degree standing and I simply really feel very nice after I keep at these properties. So undoubtedly Hilton Diamond.

Sean Pyles: One factor we should always most likely make clear is that with the intention to get these totally different ranges of standing, you do not have to purchase them essentially, however you do must spend a sure amount of cash with these firms to attain that degree. It is not such as you’re saying, “I wish to spend 100 bucks to get Diamond standing.” It is extra cumulative based mostly 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 plenty of manufacturers that you just’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 perhaps 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 after I fly with United, a variety of instances I exploit my factors as a result of I’ve an entire technique for this. Clearly, I all the time fly in first or enterprise class after I’m flying internationally, however after I fly domestically, if it is a quick flight, then I normally will fly in economic system, and a variety of instances I am going to simply pay for it in money versus utilizing factors as a result of I’ve United TravelBank credit from totally different bank cards, and usually, I’ve credit nonetheless remaining from after 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 after 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 resort, it is cumulative, proper? You get clearly the perks that your standing affords you, but additionally your loyalty to them means that you can proceed to build up factors and miles with that program.

Sean Pyles: It looks as if it might even be quite a bit 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 just’re usually 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 case you’re loyal to 1 program, you may pigeonhole your self as a result of when you solely have factors with one program, you might not be capable to fly with different applications’ factors. However for instance you are residing 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 sooner or later you wish to journey someplace and Delta would not fly there? Or it prices so many factors, you are out of choices? So, that is why folks needs to be diversified, but additionally having loyalty is essential.

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

Elina Geller: Yeah, precisely.

Sean Pyles: So Elina, do you suppose one route is best? Possibly specializing in one card or taking the extra diversified method?

Elina Geller: I believe it is undoubtedly higher to diversify as a result of getting a transferable level bank card goes to provide you a variety of perks — an important perks having the ability to switch your factors to airways and motels. So immediately, that is going to provide you a lot extra choices than, for instance, when you would have one thing just like the United bank card, which is just going to can help you 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, for instance 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 having the ability to switch your factors to airways and motels. However with the United Explorer card, sure, you are going to earn additional factors with United, however then you definately’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’d say when you’re very loyal to 1 airline, it could possibly be a very good technique to even have that co-branded card along with having a normal bank card. So you may get perks for touring with that airline.

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

Elina Geller: Sure, precisely. However that is not the place you need to be getting your bank card software in, until it is probably the most wonderful supply.

Sean Pyles: Are you able to elaborate on that a bit bit? Why should not of us apply then and there? They make it sound fairly attractive 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 accessible supply. Typically there could possibly be a restricted time supply that is accessible on-line and perhaps what they’re handing out on the aircraft is only a totally different software. So perhaps the bonus goes to be decrease on the airline, perhaps it will be larger. It actually relies upon.

So I’d simply say making use of on the airline, perhaps that is one thing solely it is best to do if you’re very conversant in the present sign-up bonus and when you see one thing that is fully excellent.

Sean Pyles: And when you’re not, perhaps 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 some extent of name loyalty as a result of not all bank card applications have the identical switch companions.

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

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

Elina Geller: Sure, there are. Not each single airline and resort goes to be a switch companion. So earlier than you determine to use for a transferable level card, try the listing 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 applications. So when you’re making an attempt to get American Airline miles, you may must 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 think about once they’re in search of a model to be loyal to?

Elina Geller: So the very first thing is comfort. Which airways have a variety of flights out of your native airport? To illustrate you are taking a look at JetBlue, however then JetBlue would 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 have in mind? Possibly for motels?

Elina Geller: For motels, additionally availability, as a result of the sort of motels that you just keep at matter by way of what bank card you’d wish to get to remain at these motels. So for instance you actually like staying at Hiltons, proper? You’d most likely wish to get a bank card that earns Hilton factors or when you actually like Marriott’s properties, perhaps it is smart to get a Marriott bank card.

So the sort of properties that you just like to remain at. And in addition, the resort manufacturers individually are totally different, and likewise not all motels are positioned in all totally different locations. So for instance, for instance you actually like staying at boutique motels, effectively, your choices are going to be totally different than when you desire to remain at chains.

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

Elina Geller: Some, however it actually relies upon if that boutique resort participates in this system. For instance, there’s AmEx High-quality Lodges + Resorts. There’s additionally Small Luxurious Lodges. These resort teams enable some impartial properties to take part inside them. So perhaps that is a means so that you can get some loyalty out of that, however it actually simply relies upon.

Sean Pyles: Elina, how do you suppose issues like rewards fee and elite standing perks come into play when individuals are procuring round?

Elina Geller: So my crew really checked out all this stuff like elite standing perks and rewards charges once we did our greatest ofs this 12 months. So you may discover all of these rankings 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 motels. What do you suppose folks needs to be in search of once they’re contemplating an airline to companion with probably?

Elina Geller: So I believe availability at your private home airport and likewise 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 dwelling airports. But when I had been to match two of the massive airways which are in New York — United and Delta — I select United as a result of I believe the redemption fee 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 technique to diversify factors, however is there a means to make use of bank cards in case your objective is loyalty to 1 airline or resort?

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 part 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 guide a flight by way of your most well-liked model, you may discover that the flight or the resort or no matter goes to be costlier than when you went with another choice. When do you suppose it might be value it to guide that costlier choice, despite the fact that it is simply the model that you just’re loyal to?

Elina Geller: So that is one thing that I really feel like I face fairly typically. As a result of for instance I wish to keep someplace and perhaps I wish to pay as a result of paying goes to be more cost effective than utilizing factors as a result of it is not such a very good redemption fee however on the similar time, perhaps paying to remain at, for instance, that Hilton property and even getting the free breakfast and the improve remains to be going to price me extra if for instance 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 must do the mathematics and see what is smart for you as a result of sure, if I keep on the cheaper property, however then if it would not have free breakfast, I will must pay to take myself out to breakfast. So these are sort of all of the issues that you might want to think about.

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

Elina Geller: It may be, but additionally on the flip aspect, perhaps it is not value it as a result of, sure, you are going to earn some additional factors out of that, but when it will price 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 bear in mind once you’re evaluating these choices is are you making an attempt to go for elite standing with the resort or with the airline? As a result of for instance you are near incomes standing otherwise you’re near reaching the subsequent degree of standing — that is one thing that you might want to think about as a result of if staying at that resort or taking that flight, that could possibly be barely costlier than the competitor goes to get you nearer to that standing or goes that will help you obtain that subsequent degree 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: At all times, yeah.

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

Elina Geller: Yeah. So first, know the trade-offs. Clearly when you keep loyal to 1 model that is going that will help you earn factors and elite standing sooner, however it might restrict your choices. You could not have sufficient factors to fly with different airways or keep at different motels. In order that’s why you wish 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 may switch these factors to a number of airways and motels.

And I’d say my third level could be to know that loyalty applications are designed to incentivize you to stay with that model. So take into account that any rewards that you just’re incomes, they might be value lower than the cash you are spending to earn that reward. So once more, simply do the mathematics and ensure it is smart 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 have now for this episode. If in case you have a cash query of your personal, flip to the Nerds and name or textual content us your questions at 901-730-6373. That is 901-730-NERD. You too can e-mail us at [email protected] Go to nerdwallet.com/podcast for more information on this episode. And keep in mind to comply with, fee and evaluate us wherever you are getting this podcast.

This episode is produced by Meghan Coyle. We had modifying assist from Tess Vigeland and me, Sean Pyles. Kaely Monahan combined our audio and an enormous thanks to the professionals on the NerdWallet copy desk.

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