Friday, September 6, 2013

Using a Travel Points or Hybrid Travel Rewards Credit Card to fly in Business Class

Enjoying AC Executive Class
You may have heard me time and time again talk about the best way to redeem for business class flights when using a credit card is via those that have ties into an airline frequent flyer program. What happens though if you don’t want a credit card tied into an airline program because of the headaches that can come along with a frequent flyer program like limited availability, having connecting flights etc. but want flexibility in your rewards and still want to fly in a premium class? You can easily use any one of dozens of travel points or hybrid cards on the market that let you book travel how you want and when you want. You may say however, that all those cards max out at around a 2% return and this is rue. So why would you redeem those points against a premium class fare with only a 2% return when an airline card could get you a much higher rate of return. Yes it is true that the highest rate of returns happen when you redeem for premium class travel with an airline program but there are assumptions behind the notion in that premium class tickets are expensive to start with and that brings up the question of when premium class fares go on sale. Which they do and then your rate of return lowers on those airline frequent flyer program associated cards. When you redeem for economy class tickets, most travel points and hybrid cards trump airline cards since they all have roughly the same rate of return (1 to 2%) but they allow for much more flexibility since you can pick the airline, the dates, the connections etc. and still possibly earn frequent flyer miles on the flight itself and low and behold this is also the case when you book a premium class ticket that is on sale.

My beautiful girls also enjoying
AC Executive Class
As you are probably well aware, Rewards Canada pretty much shut down for most of July as we took some time off and spent the better part of three weeks in Hawaii. The first part was in Maui and the flights to get there were on WestJet since Air Canada does not serve OGG during the summer and we wanted to avoid connecting in the U.S.. However the second part of the trip was on Oahu and Air Canada does serve HNL during the summer and since the have moved their old 767’s to Air Canada Rouge’s European routes, the HNL-YVR flight used their XM’d 767 we figured it would be nice to end our trip in style! When it came time to book, Aeroplan did not show availability for 4 tickets on the days we wanted to travel from HNL back to YYC in Executive Class which meant we would just end up buying economy class tickets on AC for the return flight. We went to check out the pricing and noticed that Executive Class was relatively cheap and we knew we had enough Diners Club Club Rewards points to cover the price difference between Economy Class and Executive Class (about $3000). Bingo. Just like that we treated ourselves to Air Canada Executive Class on our flight home at no extra cost to us as I booked the tickets and once the charge showed up on my statement I called up Club Rewards and redeemed my points against the charge. In the end I only ended up spending what we had budgeted for economy class. My rate of return on the Diners Club Card is a flat 1.7% and if (and that is a big if) had I been able to redeem my Aeroplan miles for the flights the rate of return would have been in the 2.5% range. Still a bit higher than the Diners Club card but in reality the rate of return was 0% since there wasn’t availability on the days that we wanted. As an added bonus, since the flights were bought outright we earned the full amount of Aeroplan miles and Air Canada Altitude qualifying miles for flying in Executive Class.

Didn't have to bring our own food or
buy on board!
In conclusion, don’t think that just because you have a travel points card you cannot fly in a premium class. Had I had enough Diners Club Club Rewards points we could have flown in Executive Class totally for free (now that I think about since I have up to 9 months after the charge to redeem I could use my current points to cover the remainder and make the flight totally free if I wanted too) but we did what I have stressed many times in interviews: travel rewards programs don’t have to be all about getting it for free, they can be used to make your travel more luxurious while staying on your original budget. My experience in using our Diners Club card shows the beauty of credit or charge cards with flexibility and it is not limited to the card I used. Whether it is a great Hybrid card like the American Express Gold Rewards Card or the top travel points card in Canada the Capital One® Aspire Travel™ World MasterCard®, there are many cards that have the ability to be used in almost any regard for making your travel more rewarding on your time not your program’s time. 

What is a travel points card?

"A Travel Points Credit Card earns points that can be used to book travel via that credit cards travel agency, associated reward program or with some cards the ability to book travel how you want and use those points towards the charge on your account."

What is a hybrid card?

"A Hybrid card is a combination of an airline and/or hotel card and a travel points card. You can convert your points to airline or hotel frequent travel programs or use the points to book travel via the credit card's travel agency or with some cards to book travel how you want and then redeem the points against the charge on your account."

Related articles:
“The interest rates, fees, rewards details, benefits and other details of the Capital One product(s) described in the article may have changed since the time of publication. Please consult the product information pages on the Capital One website for accurate product details. In the event of any conflict between the product details in this article and the Capital One website, the details on the Capital One website shall prevail.”

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