The old hair dryer you’ve had since college has finally given up the ghost. Your options are to:
- go to work with a sopping wet head of hair, and pass it off as the latest avant-garde style from Paris, or
- simply buy a new hair dryer.
Naturally, like all well-adjusted, normal-thinking people, your first thought is: how can I get the most miles as possible out of this? Like all good miles harvesters, you live by the maxim: get miles for things you were going to buy anyway.
After some quick shopping portal research, you realize that WorldOfHairdryers.com is having a fantastic promotion this month through the Oceanic Airlines shopping website – 10 miles per dollar! That’s fantastic – you’ve been trying to build up your balance on Oceanic for that dream island vacation to the South Pacific! You log into your Oceanic account, click through to the online store, and decide on the new HairMaster 2000 for $49.95. Now, to choose a credit card…
Wait – something catches your eye on the TV. It’s an advertisement for a big weekend sale at Humungo-Mart. And they’re selling the HairMaster 2000 hair dryer… for just $42.95.
Now what do you do?
While online shopping portals are a fantastic way to collect a bounty of miles, you always need to stop and ask an important question: are the miles actually worth it? Obviously, if the price of the item you’re purchasing is the same on the website as it is in a physical store (or if it’s even lower, as is common for online shopping), then the answer is easy: go ahead, buy it through the online shopping portal, collect your miles, and do a little happy dance. A question arises, however, when the online price is actually higher. You’re paying more money, but you’re also getting something additional in return – frequent flyer miles. What we need to do is determine just how much those miles are worth.
That actually winds up being a fairly complicated process, to which other bloggers have devoted an impressive amount of work. I’ll probably try my own miles valuation effort in the near future. For now, it’s sufficient to realize that different kinds of miles have different relative values, just like one Dollar, one Euro, and one Yen have different values. For the sake of simplicity, let’s say that Oceanic Airlines miles are worth two cents apiece.
Now – brace yourself – math. The question you need to answer is, do you want to spend an additional seven dollars (the online price of the hair dryer is $49.95 – $42.95 = $7.00) to collect 500 Oceanic miles ($49.95, getting your ten miles per dollar through the portal and rounding up)? Knowing that the miles are worth two cents apiece, you can now figure out that your bonus reward is worth 500 x 2 = 1,000 cents, or $10.00. In this case, the bonus reward is worth more than the extra money you’re paying, so yes, it’s worth it to go ahead and buy the hair dryer online.
In practice, of course, it’s more complicated than this. Depending on which state you live in, or which online store you’re shopping at, you may or may not pay sales tax. And you may have to pay extra for shipping. These things all have to be factored into the equation. But essentially, you’re still doing the exact same thing as you did before: you’re trying to figure out how much extra money you’re shelling out, and then see whether or not the miles you’re getting as a bonus are worth at least that much, or preferably, much more.
Another version of this choice frequently comes into play with coupons. It’s very common for online stores to offer promotional coupons, in the form of banners you can click on, or codes you can enter into the website during checkout. However, you usually have to choose: coupon or miles, one or the other. For example, let’s assume that WorldOfHairdryers.com is offering a 25% promotional coupon. Now, do you use the coupon, or go for the miles? We already know that buying the hair dryer will get us $10.00 worth of miles. If we decide to use the coupon, that will take 25% off the price of the hair dryer – that’s $12.50. In this case, the smart choice is the coupon. This blog is called the Frugal Travel Guy, after all.
A big part of your shopping and mileage strategy should be to collect miles for things you were going to buy anyway. However, never forget to ask the important question – am I paying more for the miles than they’re actually worth?
IHG® Rewards Club Select Credit Card
- Annual Fee: $49 fee waived for the first year
- Foreign Fees: No
- Card Type: Hotel
The IHG Rewards Club Visa is often cited as one of the most underrated hotel credit cards, with good reason. The official offer is for 70,000 points after $1,000 spent within three months, with the first year’s fee waived. The card comes with an annual free night certificate that can be used at any IHG property, including Intercontinental hotels - making this certificate worth upwards of 50,000 points. This is far more generous than some other hotel cards, which limit the categories in which free night certificates can be redeemed.
Cardholders earn 5 points per dollar at IHG hotels; 2 points per dollar at gas stations, grocery stores, and restaurants; 1 point per dollar everywhere else. Moreover, you’ll get a 10% rebate on award redemptions, up to 100,000 points per year. The card also comes with Platinum status, though that doesn’t get you much with IHG. Still, this is a fantastic card to have in your wallet, with benefits that far outweigh the already low $49 annual fee.
- Earn 70,000 bonus points after you spend $1,000 in the first 3 months of account opening
- Enjoy a free night of card membership at over 4,700 hotels worldwide
- Earn 5 points for each $1 spent at our hotels
- Earn 2 points per $1 spent on purchases at gas stations, grocery stores and restaurants
- Bonus points redeemable at hotels such as Intercontinental® Hotels & Resorts, Crowne Plaza® Hotels & Resorts and Holiday Inn®
- Automatic platinum elite status, as long as you remain a cardmember
- $0 introductory annual fee the first year, then $49