Points 101: The Why, What, and How of Points

By John Ta - January 29, 2024

Learn about what points are, what they can do, and how you can get started!

Points that. Points this. You may have heard about this vague idea of points, but never really understood or figured out how they exactly work. You might even have many points accumulated from your credit cards but aren't sure the best way to use them.

Our goal in this article is to help you understand the basics of points so that you can book your first free flight.

Points can be tremendously useful for a wide variety of people. I'd argue it captures an extremely large portion of people, even with varying traveling preferences. Do you fit in any of the travel archetype categories below?


Type of Traveler

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I travel full time and want to always go somewhere

I've (conservatively) saved over $50,000 in travel expenses for me and my family over the last 4 years. If you like to save money on your travels, this article is for you.

I can only travel once per year / once every few years

Even if you don't travel a lot, learning how to use points can still save you thousands of dollars on your trips. Wouldn't it be cool to travel for almost free for those times you do end up taking a vacation?

I'm a student with not a lot of cash, but want/need to travel for fun or home

I was a student when I cracked the points world and its been history since then. Being able to fly around the world in business class (~25,000 miles) for just $600 out of pocket when I was just 22 speaks volumes to the potential of points

I'd like to experience flights that I would never be able to do normally

Trust me—I never had $20,000 lying around to book flights. I love to do things that I would never be able to do within my means and points can let you book business or even first class flights that are unaffordable otherwise!

I travel for work a lot

A lot of people I met at my prior job that required business travel actually did not use their points to the fullest extent possible. There's a lot of missed value to be gained here as well

There's a very good chance you fit at least one of the archetypal categories I've listed here. If you don't travel at all, then going team cashback might be better for you. However, if you're reading this and realizing you fit into one of these categories (I'm guessing more than 95% of you), then continue reading on!

We'll be breaking down this article into three pieces:

  1. WHY: Why are points so powerful? Why should you care about them?
  2. WHAT: What are points and how do you accumulate them?
  3. HOW: How you can get stared

WHY... are points so powerful?

It might seem a bit illogical to start with WHY points are so powerful if you don't know much about points themselves, but showing the aspirational side of points might help inspire you to dig further.

My backstory with points:

I started college in 2018 as a first-generation low-income student. Many folks around me had traveled to so many countries even before starting college, but I had only been to two countries outside of America up until that point (do you consider a cruise to the Bahamas as another country?). I didn't have a lot of cash to spare myself and neither did my blue-collar parents.

Flying ANA first class for just 55,000 points!

I've always sought to learn about "finesse-ry" techniques, whereby I could accomplish things way beyond my means. I remember there was a time when I stumbled upon points when reading a The Points Guy article and learning more about travel credit cards, "trifectas," and seeing people travel the world with these foreign thing called "points." It intruiged me and I sought to dig deeper.

What I ended up kickstarting was my journey into the points world. I opened my first two points card—the Barclays JetBlue (100k point sign up bonus) and the Chase Freedom Flex® (20k points + 5x on grocery sign up bonus at the time)—which helped fly me home for the holidays and other short hops. I then accumulated more points with the likes of:

  • The Business Platinum Card® from American Express (2021: 150k points welcome offer)
  • American Express® Gold Card (2021: 90k points welcome offer)
  • IHG One Rewards Premier Credit Card (2021: 140k points + waived annual fee offer)

These are only some of the cards I ended up getting when I was just 20/21 years old. By then, I was flying fully on points and had basically cut the majority of my travel expenses by over 90/95%. Before I started working full-time, here are some of the flights I ended up booking for me + my family:

  • PHL to LAX on American Airlines nonstop roundtrip economy: 7,500 AA miles + 7,566 Amex MR Points + $5.60 USD
  • PHL to ANC on Alaska Airlines 1 stop one-way first class: 21,775 Amex MR points
  • JFK to FRA to SIN to SGN on Singapore Airlines (with stopovers at each stop) business class one-way: 99,000 Amex MR points + $376 USD

This is only a snapshot of the last 100 flights I've taken, but it's actually kind of shocking to look back at what points have enabled for me and my family to date. There's endless stories of point successes, but I hope this can convince you why points are important. If they can unlock the travel dreams of a 22 year old, then imagine what they can do for you!

WHAT... Are points? What can I do with them?

Credit card and airline/hotel loyalty points are a type of reward that companies give you in return for spending with or on their products. While they may be broadly referred to as "points," typically you earn credit card points and airline miles by (this is not an exhaustive list):

  • Credit card points: spending on credit cards, sign up bonuses (when applying for new cards), referring a friend
  • Airline miles: buying flights and attaching your loyalty number, shopping portals, cobrand credit card spend
  • Hotel points: directly purchasing hotels with the chain, shopping portals, cobrand credit card spend

American Airlines was the first big company to develop the concept of the loyalty program, rewarding consumers for spending on AA flights. Back then, you could get a free flight for 25,000 points (if only that was the case now!). However, the idea of the consumer loyalty program is almost everywhere in life. There's a large oversaturation of loyalty programs out there today, but there's still a lot of opportunity to derive significant value.

What Are Credit Card Points?

Several card issuers have cards that issue "points" that can be used for travel. Generally speaking, by spending on the card, you're rewarded with "points." Accumulating enough points should (in theory) lead to some type of reward. Points here usually fall into two broad categories:

  1. Transferable points: These points can be "transferred" to a partner airline or hotel. For instance, if you were to get the Chase Sapphire Reserve®, you would earn Ultimate Rewards point, Chase's point currency. You could then transfer your points to a partner like Hyatt or United Airlines to potentially get more value out of your points rather than just booking via the Chase travel portal.
  2. Nontransferable/set-value points: These points are essentially just cashback in disguise. For instance, with Chase Freedom Flex, it's advertised as earning "cashback" but the rewards are accrued as Ultimate Rewards points. However, to make this confusing, you cannot transfer your Ultimate Rewards points here to partners if you only have the Freedom Flex. Rather, points can be liquidated for 1 cent each.

Why do nontransferable/set-value points exist if they're basically just cashback in disguise? It allows banks to potentially offer promotions that give you more than 1 cent per point (e.g. redeeming your points against Apple purchases might give 25% more value). Additionally, it might incentivize you to get a travel card so that you can actually use your points for transferable travel. In the case of the Freedom Flex, if you get a Sapphire Reserve concurrently, suddenly, you can transfer all your Freedom Flex points to travel partners!

What Are Hotel Points?

Hotel points are used to get free/discounted hotel stays. When staying at hotel chains, always put down your hotel loyalty number to accrue points.

For example, when staying at Hilton chain hotels and booking under an eligible, points earning rate, you earn Hilton points. Eventually, when you stay at enough properties, you'll accumulate points to redeem against future Hilton stays.

Notably, points you earn at one hotel chain can't be transferred or redeemed at other properties. So, your Hilton points are completely siloed/separated from Marriott, IHG, Hyatt, Choice, etc.

Annual Fee: $95


Sign-up Bonus: 60,000 points

60,000 points

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What Are Frequent Flyer Miles?

Frequent flyer miles are points that are earned with airlines that can then be redeemed for free flights (excluding taxes/other fees).

For example, if you take an American Airlines flight, you can add your AAdvantage loyalty number to then earn AA miles. With enough miles, you can oftentimes travel to a wide variety of places (try using Roame to search for some options!).

Something important to understand is that miles you earn on one airline cannot be transferred to another. For example, you cannot book Delta flights using American Airline miles. However, this idea gets more confusing when you discover that you can typically book "partner flights" with your airline miles. For instance, you can book British Airways flights with your American Airlines miles.

The capability to book other airline's flights is because of the three major airline alliances: One World, Star Alliance, and SkyTeam. These alliances formed because airlines believed working together in groups would allow them to cover more of the world collectively than individually. Consequently, since they all work together, it's possible to book flights on another airline through one carrier's website.

Members of the Star Alliance

What Are The Typical Ways To Use Your Points?

Card issuers give you many avenues to use your points, but it's typically best to just transfer them to travel partners. Otherwise, you risk missing out on a lot of high value opportunities. For example, in the case of AMEX Membership Rewards points, there are many ways to use your points, but a lot of them are not very valuable:


Redemption Method

Point Valuation

Shop with points

10,000 points = $50 (0.5 cents per point)

Use points for statement credit

10,000 points = $60 (0.6 cents per point)

Pay with points at checkout

10,000 points = Up to $70 (up to 0.7 cents per point)

Redeem for gift cards

10,000 points = Up to $100 (up to 1 cent per point)

Book travel via the AMEX portal

10,000 points = Up to $100 (up to 1 cent per point)

Transfer points to partners

10,000 points = varies by partner, but commonly starts at 1.2 cents per point, with potential to exceed 10 cents per point

Moral of the story: transferring your points to partners can provide tremendous value when compared to the alternatives.

Annual Fee: $95


Sign-up Bonus: 60,000 points

60,000 points

Learn more

HOW... Can You Get Started?

Points aren't too difficult to get started with. For many of you readers, you may have already accumulated points via the likes of the Chase Sapphire Preferred® Card or an American Express® Gold Card. However, you also may not have any point earning cards. Scroll down to the part most relevant to you!

I Already Have A Point Earning Card!

Ok good! You have points you can use. Now what?

First, check the list of partners your card can transfer to. For the sake of discussion, let's say you have the Bilt Mastercard® (our favorite card to earn points on rent). You can transfer to an incredible slew of partners via Bilt:

  • Aer Lingus AerClub
  • Air Canada Aeroplan
  • Air France/KLM Flying Blue
  • American Airlines
  • Avianca Lifemiles
  • British Airways
  • Cathay Pacific Asia Miles
  • Emirates
  • Hawaiian Airlines
  • Iberia
  • Turkish Airlines Miles & Smiles
  • United Airlines
  • Virgin Atlantic
  • IHG One Rewards
  • Marriott Bonvoy
  • Hyatt

You can try starting by searching for award availability. Let's say we're trying to fly to Tokyo from the West Coast. A quick Google search reveals a plethora of options.

Now that you can see options, go ahead and search for options at one of the transfer partners relevant to the alliance. For example, American Airlines is part of One World, so you can even book Japan Airlines flights using your AA miles by logging into their website (AA.com), entering your search criteria (departure & arrival airport, dates, etc.), and selecting “Redeem Miles.”

Instead of searching for each of these partners individually, you can also use Roame to accelerate your search experience. Simply input your starting and destination airports, click the search button, and wait for the results to roll on it! Our goal at Roame is to help save you precious time—we know just how long it can take to find a good award deal.

Within just a few minutes, you can see the cheapest way to get to Tokyo from the West Coast is via Virgin Atlantic (a SkyTeam partner). Normally, to find this, you would have to search through all the major airlines individually. This effort adds up considerability given you would need to search through multiple airlines within each alliance. 

I Don't Have A Points Earning Card

That's a ok as well—we all start somewhere.

I'd suggest you start off by getting a strong, points-earning credit card that accrues transferable points that you can use for a wide variety of flights. These cards offer a lot of awesome benefits, including travel insurance, lounge access, and more... feel free to click onto each to read more about them!

Once you accrue some points, you can start digging into the beauties of award travel. We have a lot of awesome articles that help detail the process from A to B!


Points are extremely powerful tools when used properly, unlocking tremendous value and opportunity that you might not be able to access otherwise. If you haven't delved into the points game, it is never too late—better to start now than never.

Annual Fee: $95


Sign-up Bonus: 60,000 points

60,000 points

Learn more