Smart Money: ‘This or That’: Loyalty to One Travel Brand or Diversify?

Welcome to TWP’s Good 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 workforce 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 method to do that is to make use of a journey bank card with transferable factors, so you'll be able to earn factors with one card, however then switch these factors to a number of completely different airline or resort packages. Ensure that to test that your bank card’s switch companions are airways or lodges that you just frequent.

If you happen to already journey with one model frequently, it might make sense to begin incomes rewards with that one model extra deliberately. For instance, in case you stay close to a sure airline’s hub, you would possibly wish to think about getting the airline’s co-branded bank card to earn extra miles and get perks like free checked baggage and a quick monitor to elite standing. Elite standing can unlock some money-saving perks, corresponding to complimentary upgrades to enterprise class seats or resort 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 e-book your subsequent journey — there are a number of elements it's best to think about. Along with availability and pricing, you would possibly wish to take into consideration rewards fee and elite standing. TWP used these elements and others to fee the finest airline and resort loyalty packages.

1. Know the trade-offs: Staying loyal to at least one model can assist you earn factors and elite standing sooner, however it might restrict your choices. If you happen to do wish to decide to a program, search for the perfect 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. Ensure that the switch companions are ones you'll doubtless use.

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

Extra about factors and miles and switch companions on TWP:

Sean Pyles: Welcome to the TWP Good 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 the best way to earn them with a journey bank card.

However one vital query stays: Must you keep loyal to at least one resort or airline, or diversify your factors recreation? Journey author Elina Geller is right here at present 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 speak about a couple of bank cards on this episode which might be TWP companions, however that doesn't have an effect on how we speak about them. OK. Nicely 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 quite a lot 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 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, identical to a persistent overpacker. In order that further allowance that I get from my standing saves me some huge cash. The opposite factor is, when you've got Silver standing, 24 hours earlier than the flight — so, principally once you're capable of test in — you possibly can 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, typically, simply extra comfy and extra spacious, and I really like these seats and I do not like paying for issues, as you already know.

So it is simply one other method for me to get one thing without cost, regardless that I clearly needed to spend cash to attain the standing.

Sean Pyles: And also you journey internationally actually regularly, staying at one location for a month, one other location for a month. So that you form of have to carry all of that stuff, 70 kilos price 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 prefer to carry all my toiletries with me and my blow dryer. So all these items weigh lots, and plus having garments for various climates. I actually need that further 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 quite a lot of 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 set, the perfect 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 positively Hilton Diamond.

Sean Pyles: One factor we should always in all probability make clear is that with the intention to get these completely different ranges of standing, you do not have to purchase them essentially, however you do need to spend a sure amount of cash with these corporations 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 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: Fascinating. All proper. Nicely, it looks as if you've got quite a few manufacturers that you just're loyal to. I may 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 advocate possibly staying loyal to a single model versus many?

Elina Geller: Since you may proceed to earn your factors with that particular model. So for instance after I fly with United, quite a lot of occasions I exploit my factors as a result of I've an entire technique for this. Clearly, I at all times fly in first or enterprise class after I'm flying internationally, however after I fly domestically, if it is a brief flight, then I often will fly in economic system, and quite a lot of occasions 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 typically, 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 further 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 particular airline and even resort, it is cumulative, proper? You get clearly the perks that your standing affords you, but in addition 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 lots simpler to maintain monitor if you do not have to fret about, “Am I getting factors for this firm this time or this one the following 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. Nicely, are there any cons to being loyal to only one program?

Elina Geller: If you happen to're loyal to at least one program, you'll be able to pigeonhole your self as a result of in case you solely have factors with one program, you might not be capable of fly with different packages’ 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 most important bank card, what occurs if in the future 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 ought to be diversified, but in addition having loyalty is vital.

Sean Pyles: You wish to give your self some flexibility so you've got extra choices, however you additionally need to have the ability to navigate these programs in a method that works for the 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 feel it is positively higher to diversify as a result of getting a transferable level bank card goes to provide you quite a lot of perks — an important perks with the ability to switch your factors to airways and lodges. So immediately, that is going to provide you a lot extra choices than, for instance, in case you would have one thing just like the United bank card, which is just going to let 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 got 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 further 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 in case you're very loyal to at least one airline, it may very well be a very good technique to even have that co-branded card along with having a normal bank card. So you possibly can 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. Folks get gives for these from the flight attendants once they're about to land, proper? Folks come round and provide software pamphlets?

Elina Geller: Sure, precisely. However that is not the place try to be getting your bank card software in, except it is probably the most superb provide.

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

Elina Geller: It simply actually relies upon. You must examine and see if that is the perfect publicly accessible provide. Generally there may very well be a restricted time provide that is accessible 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 increased. 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 in case you are very accustomed to the present sign-up bonus and in case you see one thing that is fully excellent.

Sean Pyles: And in case you'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. Nicely, even selecting a journey bank card with transferable factors includes some extent 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 accomplice of each AmEx and Chase, however there's additionally different airways which might be distinctive. For instance, Southwest is just a switch accomplice of Chase.

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

Elina Geller: Sure, there are. Not each single airline and resort goes to be a switch accomplice. So earlier than you determine to use for a transferable level card, take a look at the checklist of switch companions to see which of them align along with your travels. For instance, American Airways is an instance of an airline that isn't a switch accomplice of any of the packages. So in case you're making an attempt to get American Airline miles, you may need to get an American Airways bank card.

Sean Pyles: So it seems 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 quite a lot of flights out of your native airport? For instance 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 have 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? Possibly for lodges?

Elina Geller: For lodges, additionally availability, as a result of the form of lodges that you just keep at matter when it comes to what bank card you'd wish to get to remain at these lodges. So for instance you actually like staying at Hiltons, proper? You'll in all probability wish to get a bank card that earns Hilton factors or in case you actually like Marriott's properties, possibly it is sensible to get a Marriott bank card.

So the form of properties that you just like to remain at. And likewise, the resort manufacturers individually are completely different, and in addition not all lodges are positioned in all completely different locations. So for instance, for instance you actually like staying at boutique lodges, effectively, your choices are going to be completely different than in case you favor to remain at chains.

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

Elina Geller: Some, but it surely actually relies upon if that boutique resort participates in this system. For instance, there's AmEx Superb Accommodations + Resorts. There's additionally Small Luxurious Accommodations. These resort teams permit some unbiased properties to take part inside them. So possibly that is a method so that you can get some loyalty out of that, but it surely 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 buying round?

Elina Geller: So my workforce really checked out all these items like elite standing perks and rewards charges once we did our greatest ofs this yr. So you possibly can discover all of these rankings on the TWP 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 suppose folks ought to be in search of once they're contemplating an airline to accomplice with doubtlessly?

Elina Geller: So I feel availability at your private home 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 dwelling airports. But when I have been to match two of the large airways which might be in New York — United and Delta — I select United as a result of I feel the redemption fee for award tickets is significantly better than Delta, which has ridiculously excessive redemption charges.

Sean Pyles: However we already talked about getting a journey bank card as a approach to diversify factors, however is there a method to make use of bank cards in case your aim is loyalty to at least one 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 little 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 further factors for utilizing that bank card at a Hilton property.

Sean Pyles: OK, one other query for you. Generally when you are going to e-book a flight via your most well-liked model, you may discover that the flight or the resort or no matter goes to be dearer than in case you went with another choice. When do you suppose it might be price it to e-book that dearer choice, regardless 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 usually. As a result of for instance I wish to keep someplace and possibly I wish to pay as a result of paying goes to be cheaper than utilizing factors as a result of it isn't such a very good redemption fee however on the similar time, possibly 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 need to do the mathematics and see what is sensible for you as a result of sure, if I keep on the cheaper property, however then if it would not have free breakfast, I'll need to pay to take myself out to breakfast. So these are form of all of the issues that it's good to consider.

Sean Pyles: And generally the comfort of going with the model that you just're loyal to could be price it.

Elina Geller: It may be, but in addition on the flip facet, possibly it isn't price it as a result of, sure, you are going to earn some further factors out of that, but when it should price you some huge cash to earn these further 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 resort or with the airline? As a result of for instance you are near incomes standing otherwise you're near attaining the following degree of standing — that is one thing that it's good to think about as a result of if staying at that resort or taking that flight, that may very well be barely dearer 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 price extra than simply saving some cash.

Sean Pyles: OK. So you must take into consideration your particular person circumstances and objectives proper now.

Elina Geller: All the time, yeah.

Sean Pyles: Nice. Nicely Elina, thanks for sharing your whole insights with us. Are you able to inform us your takeaway suggestions, please?

Elina Geller: Yeah. So first, know the trade-offs. Clearly in case you keep loyal to at least one model that is going that will help you earn factors and elite standing sooner, however it might restrict your choices. Chances are you'll not have sufficient factors to fly with different airways or keep at different lodges. 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'll be able to 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 remember the fact that any rewards that you just're incomes, they might be price lower than the cash you are spending to earn that reward. So once more, simply do the mathematics 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 have now for this episode. If in case you 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. It's also possible to 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 assessment 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 a giant thanks to the professionals on the TWP copy desk.

Right here is our transient disclaimer. We're not 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.