Points Hacking: What you need to know before you start

So you’ve decided to start points hacking. Maybe you’re fed up with flying economy. Or maybe you’re trying to cover your airfare or hotel stay with points. Either way there’s a few things you should know before you jump in. A few things they don’t tell you.

For the unintiated, “points hacking” is the name given to the act of trying to accumulate points en masse (whether they be frequent flyer, FlyBuys or others) in order to score discounts, upgrades or other freebies.

One of the most popular ways to do this is to sign-up to credit cards with bonus point offers, or to take advantage of bonus points for special purchases. But of course there are loads of other ways you can earn points.

But before you jump in and pledge never to fly ecocnomy class ever again, there are a few things you should know.

Earning enough points is actually kind of hard

It’s not easy to earn the points you need to get a free airfare or an upgrade. For context, you’ll earn 4,500 Qantas Frequent Flyer points flying from Sydney to LA on a discount economy ticket. To pay for that same flight in points you’d need 45,000 – equivalent to the points earned on 10 paid trips to Los Angeles from Sydney. And there are still additional taxes to pay even after you’d used the points.

But what if you want to upgrade to business class? Well, in that case you’d need 90,000 points even after you’ve paid for your economy ticket. That’s the points earned on 20 trips from Sydney to LA.

This is why so many people turn to signing up to programs, services or credit cards to score bonus points or choosing rewards credit cards to earn points faster.

You’ll probably end up spending more 

One of the best ways to get loads of points in a rush is to sign up for a credit card with a bonus points offer. There are always plenty around, a quick Google search will reveal the best. There are always three or four credit card offers promising 80,000, 90,000 or even 100,000 bonus points for signing up during the specific offer period.

To save you searching, you can use our offer to sign up for a new Qantas American Express Platinum Card and get 60,000 points if you meet the eligibility criteria. (Disclosure: redaktör gets referral bonuses for sign-ups).

But what is not immediately advertised is the yearly fee. Many of the cards offering loads of points can have annual fees of $300 or more. Even if there’s no bonus offer, standard rewards cards generally always have a much higher annual fee than a standard card.

I recently signed up for a card to score 100,000 bonus points. But I must admit, I was almost turned off by the annual fee of $450. This is the second credit card I’ve had and my last one had no annual fee. So yes, I’ve got enough points to buy a one-way fare or upgrade a ticket, but I had to pay a lot to get them. Considering a flight to LA is only about $400-600 one way, I spent roughly the fare amount on just having the credit card for a year. 

I’m planning to use my points to upgrade my fare to business class rather than use the points to pay for an economy ticket. So paying a $450 annual fee for some points is a lot cheaper than spending the $2000 or $3000 it costs to actually fly business class. Regardless, if I was content to just fly economy and abandon the pursuit of points, I’d be better off overall.

Another factor is that upgradable fares and airlines offering upgrades are often more expensive than cheaper carriers and their discount fares. When I recently flew to Hawaii, the one way fare with Jetstar was just $330. But my frequent flyer points are all with Qantas, so to be able to use them to upgrade, I had to book a Qantas fare. And the Qantas fare was $768 – more than double the Jetstar fare. Points hacking here has actually cost me money. It’s not made the actual fare cheaper, it just made business class cheaper. And even cheap business class is still a lot more than an economy fare.

In order to make the maths add up, you can’t think of points hacking as a way to get cheaper flights. Think of it as a way to get cheaper access to business class flights. If your goal is flying for fewer dollars overall, this may not be for you.

One of the other key things you can do to maximise your points is take advantage of special offers. It’s common to see things like “get 5,000 bonus points this week when you buy 12 bottles of wine” or “score 10,000 points when you buy a vacuum this weekend”. While these are easy ways to earn points, and often cheaper than buying airfares, it still involved spending money that you might not ordinarily spend. And you might find your hour is suddenly filled with wine and vacuums so you could reach the 50,000 points you need to pay for a fare that was only worth $600. Be sensible and try to only buy the things you need.

It doesn’t always work out

So you’ve got enough points to upgrade your fare or to pay for it entirely. Well, the “pay with points” system only applies to certain flights. You might find that the flight you were looking at booking isn’t available to be paid for with points.

Upgrades are a whole other issue.

Most airlines won’t actually lock in an upgrade. If you have the right amount of points you can “request an upgrade”.

This means your upgrade is only approved if there are available seats in the class you’ve requested to upgrade to. So if all business class seats are booked, you’ll be out of luck.

Likewise if other people have requested a points upgrade and they have a higher frequent flyer status than you, they’ll get approved first and you might lose out.

It all depends on how many spare seats they have. In most instances, you should be okay. But if you’ve booked a popular route, in peak season and there are a lot of other frequent flyers on the plane, your upgrade request could be denied and you may have paid for a pricey credit card all for nothing.

Beware of minimum spends and lead times

Another reason you may end up spending more is due to minimum spend requirements.

Some cards with bonus point offers may require that you spend a certain amount of money in a certain amount of time.

I was once looking at signing up for a card that required me to spend $4,500 in the first three months in order to qualify for the points. For someone who doesn’t spend too much on incidentals, that’s a tough sum to reach. And you might find you have to buy a few things you don’t need to reach that sum.

I managed to find a card recently that only required me to spend $3,000 over three months. But as a non-drinker and someone who likes to cook at home, it’s still not an amount of money I’d normally spend.

I ended up buying a new set of bed sheets and a new leather jacket in pursuit of hitting to the $3,000 amount. So, in a way, points hacking encouraged me to buy things I didn’t really need. That’s falling into the credit trap.

The other thing to watch out for is the lead time to actually get the points credited to your account. It might be six or even 12 weeks before you actually see the points you signed up to get. Most often this lead time will commence after you’ve hit the minimum spend.

So let’s say it takes you three months to hit your minimum spend and your points are deposited 12 weeks after you hit the minimum spend. That means it might be nearly six months between signing up for a credit card and actually seeing your bonus points.

So if you are planning to use your points on a trip soon, you need to sign up quickly and hit the minimum spend even quicker.

So, is it even worth it?

It depends.

I’ve known about points hacking for a while and always been keen to give it a go. But it wasn’t until recently that I could actually afford to.

If you’re looking to save, like really save, it will probably just be cheaper for you to look for great deals, flight sales and hotel offers. Points hacking will inevitably involve signing up for an expensive credit card, reaching a minimum spend, buying things you don’t necessarily need to grab more bonus points, plus paying a premium for an airline that offers pay with points or upgrades with points.

But if you’d got a little bit of extra cash, and you wouldn’t mind hacking your way into a business class seat, then it’s absolutely worth trying.

You’ll have to spend a tad more than you would on a standard economy fare, but certainly not as much as a full business class fare.

And if it doesn’t work out and your upgrade or pay with points is denied, there’s always next time.