Travel Hacking Tutorials - Bank Programs

Points and Miles for Airlines/Travel are usually split up into two separate TYPES of points;
- Frequent Flyer Airline Programs/Hotel Programs (Loyalty Programs)
- Bank Programs

In relation to Airlines, Loyalty Programs usually let you redeem points directly for a flight instead of using money. Often you will use cash to pay for a portion of the taxes and fees but for the most part, they have figured out how much the points/miles are worth and give you a chart which shows you what you can redeem the points/miles for. The programs themselves vary with how much points are worth and what you can get for the miles. they also vary in the sense that some programs are distance based (eg fly 1000-2000 miles in the actual plane and it will cost you 10,000 of your loyalty program miles) and others are region based (fly from Region 1 to Region 2 and it will cost you 10,000 miles).

Now Bank Programs are different in that you earn miles/points for signup bonuses, AND you also earn miles/points by spending money using that card/bank. Each bank approaches their program a little differently but the most common way is to let these special bank points equal a certain amount of money. Most often, it is a ratio of about 100 points = $1. So if you like something that costs $100, the bank will let you use 10,000 points to get it.

There are 2 different ways the banks approach this though;


This is where you pay upfront with points for a product and they deduct the points from your points balance. Just like a supermarket or a store - 

Bank: "Oh you want this lounge? that will be 100,000 points please"
You: "Why 100,000 points?"
Bank: "Well that's just exactly how many points this lounge costs"
You: "Ok I will take it"
Bank: "Ok I will deduct 100,000 points from your balance, I hope you like the lounge!" 

This is usually done through a special shopping portal or some banks actually only offer gift cards.


This is where you buy something, then you log onto your bank program and use the points to reduce your bill for eligible transactions. This is always done on the bank website somewhere. Capital One calls it a Purchase Eraser which is a nice way to think about it.

Hopefully this explains some of how the Bank Programs work. Please let me know if you have any questions in the comments.