031: Canadian Miles and Points | Prince of Travel

In this episode, Money Mechanic and Chrissy interview Ricky Zhang from Prince of Travel! We talk miles and points in Canada, how to optimize your earning, and what to focus on now, during the COVID-19 pandemic.

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Money Mechanic
Alright folks, thanks again for joining us on Explore FI Canada. Money Mechanic with you. And of course Chrissy. How are you doing this fine day?

Chrissy
I’m great. How are you doing?

Money Mechanic
Pretty good. I’m looking at some drizzly weather. So I’ve been trying to convince the dogs it’s not a walk day, but they’re not hearing any of it. So we’ll move on from that.

Money Mechanic
Yeah, we’ve been wanting to talk about travel rewards and points on the show for a while now. So I figured I better get on the expert in Canada. We have Ricky from Prince of Travel with us on the show. Welcome, Ricky.

Ricky
Hey, guys. Happy to be here. Thanks for having me.

Money Mechanic
So Prince of Travel is your blog. And yeah, let’s just start off with a little off the wall here… so many people refer to traveling with on rewards points as travel hacking, you really don’t like that. You wrote a strong article about that a couple years ago. Just give us a sort of brief overview of what you feel this hobby should be more referred as.

Ricky
Of course. So I guess a lot of people yeah, a lot of people know the practice of using rewards points and maximizing credit cards and loyalty programs to travel the world and they know that term. You know, they know that concept as the term travel hacking.

Ricky
And I think it’s a bit unfortunate that that’s the term that has caught on originally because they just think it sends the wrong message, right? I think those who are, you know, those who are practicing this understand the sense that it’s kind of a hack…

Ricky
In the sense that it’s a life hack, right, that allows you to do you know, it’s a clever way to use publicly available offers and products to get what you want kind of to travel the world. But I think externally, it doesn’t exactly send the best message in terms of what people’s intentions are.

Ricky
I think it sends a message of, you know, there’s an element of shakiness or unethical in nature about it. Whereas, you know, I think it’s something really that is extremely natural and intuitive for people to try to be maximizing.

Ricky
All the financial products out there all the credit cards, the loyalty programs, to pursue their goals, their travel goals. So really I like to call it you know, maximizing your credit card rewards, maximizing your credit card points.

Ricky
Generally, on my website, I tend to just refer to the whole practice as, you know, miles and points. Miles and points landscape, the miles and points community. And that’s what we’re all a part of.

Chrissy
Yeah, I agree with that view. I think it the term hacking does give it sort of an illicit kind of connotation. And we don’t really want that because everything we’re doing here is aboveboard, and it’s legal. It’s legitimate. There’s nothing wrong with what is happening here.

Ricky
Absolutely.

Money Mechanic
So you’ve got an excellent blog, PrinceofTravel.com, and you also have quite a good series of YouTube videos that are out there for all our listeners to go check out. So we’ll highlight some of those in the show notes.

Money Mechanic
And one of the questions I wanted to sort of start off asking is I’m definitely a beginner in the traveling with miles and points, sort of hobby and I’ve never really gotten involved in it. I’ve definitely collected Aeroplan before, but those were just sort of from flight rewards.

Money Mechanic
Anyway, I’ve collected Air Miles with my shopping. But I really haven’t dabbled into this. And you did a great video on some of the hard truths that is important for beginners to understand for when they’re going to start doing this… this, get serious about collecting miles and points. Can you outline some of those hard truths?

Ricky
For sure, I think a lot of people are initially attracted to the idea of maximizing their miles and points by you know, the the promise of traveling the world and business class in first class, and kind of seeing the end results of it without necessarily appreciating the entire process of earning and redeeming points and all the thoughts and energy and effort that goes into it beforehand.

Ricky
So I do think that when people are first starting out, it’s important for them to, you know, first of all understand the strategy and the process. And kind of the basic concepts that we talked about in the community, but also a few things that may not be immediately obvious.

Ricky
So I guess a few of those hard truths that I had covered in the video would be, you know, in order to first of all, in order to be able to maximize and juggle many credit cards at once, you do need to have a high level of financial literacy, and a high level of organizational skills, right?

Ricky
So that you never, for example, end up paying more fees than you need to or end up paying interest on missed payments. For example, you got to ensure that you constantly pay off all your credit card balances in full and on time.

Ricky
Because any such additional fees aren’t going to quickly eat into the rewards that you earn and wipe out the value that you’re getting. So that would be I guess, the first, you know, major, hard truth that I tell people.

Ricky
If you don’t have your financial house in order, then focus on that first before even thinking about maximizing rewards, because the rewards really is the gravy on top of having everything under control, which I’m sure many of our listeners, you know, the vast majority of our listeners do have their financial house in order. So that’s good.

Chrissy
I think it’s important that you outline that because this could do way more damage than than good if you’re not if you don’t have your finances in order to start with.

Ricky
Yeah, that would be the most major hard truth, I think to start out with the other hard truths, I think, is just to appreciate that maximizing your points is like anything else, you know, like building up other aspects of your, you know, financial strengths.

Ricky
It’s also something that does require time and energy to learn and understand and try out for yourself in order to get good at, right. So when I say that, you know, I’m talking about the, the time and energy spent in terms of learning the learning the ropes at the start…

Ricky
Of learning all the important concepts and strategies, but also in the sense that the miles and points is really a game that rewards people who are willing to spend some money in the first place on travel. Right?

Ricky
I kind of I kind of like to say that it’s a pay to play game, where, the… sure that you’re able to get, let’s say $1,000 of value. If you don’t want to spend any money out of pocket, like if you want to spend zero dollars out of pocket, you’re able to take advantage of the credit card signup, bonuses that have, let’s say, first year free or no annual fee…

Ricky
And you’re able to get, let’s say $1,000 in value from your flights and hotels as a result. But if you’re somebody who initially are are willing to spend, let’s say, $1,000 out of pocket, then you could potentially leverage the rewards to get $10,000 in value, like a much, much more significant amount of value, if you’re willing to pay to play at the start.

Chrissy
Yeah, I like that concept that you outline that… as someone who has been in the game for a while and has seen the ins and outs of all the various credit card strategies. It’s nice to actually hear that you have to pay to play because a lot of us in the FI community, we are pretty frugal.

Chrissy
We are really careful about how we spend our money. And it can be painful to have to pay those annual fees or anything else that might be involved in trying to earn the higher bonuses. It can be difficult to justify that. But when you really sit down and do the math, and you know what you’re doing, you’re right. When you pay to play, you can really get a lot farther ahead.

Ricky
Yeah, absolutely. I think it’s something that most people in the community have had to deal with that change in mindset. I know I personally started out when I was a university student, and I didn’t have a lot of income.

Ricky
At that point in my life, I was all about the frugality and, and spending as little money out of pocket as possible. And then, as I you know, developed some disposable income. I came to realize that Yeah, the value that’s really there to be attained is more available if you’re willing to spend a little more On, let’s say annual fees.

Ricky
And, you know, the taxes and fees when you redeem points and that kind of stuff. So really, the mindset should be something like, you know, if you had an annual travel budget of a certain amount, regularly, you might be able to get, let’s say, one or two trips using your budget…

Ricky
But with points by knowing how to maximize points, you could potentially turn that into four or five trips and in a much greater level of comfort to so business class in first class, for example.

Money Mechanic
So I think it’s important to to point out pay to play means you can really level this up and leverage it up by paying for some of those fees. I mean, I’m definitely guilty of being adverse of paying any credit card fees, but that’s because I’ve never really made a plan to use the points I’m strictly a cashback person.

Money Mechanic
So I think it’s really interesting. And the more I learned about that, as you can definitely start with the no-fee cards and I think the people in our community probably would want to start there. But like you’re saying you might get one trip a year out of that. But if you want to level this up and travel in some luxury, then you do need to have to invest a little bit of money into it,

Ricky
For sure. And I think it’s also worth pointing out that, you know, even though I say that that’s the best way to unlock the most value, it doesn’t necessarily have to be the path that everybody goes down. I mean, at the end of the day, it really depends on your goals and what you want to get out of this.

Ricky
How much you you know, enjoy traveling in the first place, how much of a priority travel is in your life, right? If it’s something that you really want to pursue, you know, in a larger quantities than than otherwise would be able to then the tools are there for you to do so.

Money Mechanic
And I think that kind of leads us a little bit towards one of the next points we were going to have a little discussion about was having a good plan. Because for example, when I had my Air Miles, I was just getting them because I shopped Thrifty’s is in town here and I got Air Miles.

Money Mechanic
I had no idea what I was going to use before. So for our listeners out there that just think that they want to start accumulating miles and points and maybe start turning some credit cards. Unless you’ve got a plan. Tell us a little bit about how to think forward and go, this is the end goal I want to have and how do I get there?

Ricky
Absolutely. There’s two sides to the game, right? There’s earning points, which is most easily and most cost effectively done through credit cards and maximizing your return on spending and the signup bonuses.

Ricky
And then there’s redeeming points for excellent value. So the idea there is, you basically acquire points for as low cost as possible, and then you’re aiming to redeem them as expensively as possible. As in for the most, the greatest value, the most expensive, possible stuff.

Ricky
So usually, in terms of the retail tag price on stuff that’s going to be business class flights, first class flights. Now most people start out on the earning side, like you said, like kind of earning points here and there, you know, willy nilly without really putting much thought into what they’re going to be able to use those points for in the long run.

Ricky
I usually advocate if somebody is interested in starting out on the right path for them to think, you know, think very hard about what trips are possible using points, like what types of trips, which destinations traveling and what class of service staying and what level of hotel, what what’s attainable using the various points offers that are available on the market out there…

Ricky
Thinking about the exact trip that they’d like to take using points. And then thinking about the best points to use to book those trips. And then finally, putting together a strategy to earn the amount of points required, using the credit cards that are available on the market, and then executing on that strategy.

Chrissy
Well, that’s interesting, because you’re flipping the script, like most of us do it backwards, right? We earn the points first, and then we go, oh, what am I going to do is this pile of points. But what you’re saying is it might make more sense to first learn about these programs and see which one might work for the trip that we want, and then go backwards from there and figure out what the best credit card or whatever system might work best to earn us the points that’ll get us the trip that we want.

Ricky
Yeah, that’s gonna be the way to do it. That makes the most sense. And that ultimately, is the most time and cost effective for you to prevent you from you know, ending up with small balances of points, divided into multiple different programs, and then scrambling to figure out how to use them.

Chrissy
As most of us, me included, we have these little bits of points everywhere, and they’re useless because they’re spread out so far, right?

Money Mechanic
You’ve got the 4,000 Aeroplan miles sitting over there somewhere and like the 1,500 Air Miles that don’t do anything.

Chrissy
Yeah! That’s that’s fantastic to have that to help us focus our efforts in the right places at the right time. Because that will get us the most benefit. Thank you for pointing that out. It takes someone who knows that the ins and outs of this well, in order to see that overall concept that way, because we’re all so used to doing it the way that we all do, which is just earning first and then deciding later.

Ricky
Yeah.

Money Mechanic
Well, and I think, too, that the really nice part about looking at it from that perspective is, it’s pretty overwhelming for most of us that are beginners to look at the volume of programs that are there, whether they’re through the credit cards through the airlines through our banks, I just have no clue what to pick.

Money Mechanic
But if you take a look at down the road and say, I want to do a trip to South Africa, what airlines am I going to get there on what points are going to work the best and reverse engineer just like you described? I think that makes people’s decision how they start so much better.

Ricky
Yeah, and the challenge is, all the different programs are telling you that they’re the best, right? Of course, if you look at all the banks, all of the credit cards, they’ve all found some, you know, some obscure criterion to say that they’re the number one rewards program for Canadians or something like that.

Ricky
And the thing is, they may be number one for certain types of travelers, like I know, there are travelers out there that value, you know, programs like let’s say, Air Miles, or let’s say CIBC points. Further, you know, reasons that have merits, but it may not be the program that has the highest value on paper.

Ricky
And that’s where you’re thinking about: exactly which places you’d like to go, which airlines you’d like to fly, in what class of service? And then which programs make that possible? How do I earn those points? Those are the steps.

Money Mechanic
One of the things I got from one of the videos I was watching is that you talked about the sort of different types of points, those points that are representative of a dollar value. And then there’s also points that are transferable and what was the third one? I’m stumped now. There’s one in the middle there.

Ricky
Right. The third one was like fixed value points.

Money Mechanic
That’s right.

Ricky
That’s one cent per point.

Money Mechanic
So just briefly outline those three for our listeners, because that’s kind of what we’re all sort of dealing with and how they can be put to use just sort of a quick summary for us.

Ricky
For sure. So we’re familiar with, you know, the fact that there’s tons of programs in Canada. And in general, I’d say that they all fall into one of three categories. The first category would be an airline frequent flyer program.

Ricky
So an example might be Aeroplan, which is affiliated with Air Canada. Or let’s say, British Airways, Avios. So that’s the program for British Airways, but they do have some involvement here in Canada as well.

Ricky
Generally, for the airline programs, each point doesn’t necessarily have a fixed value of its own until you redeem it for something. So every program has their own charts and rules that you have to follow when you redeem your points.

Ricky
And these charts will be based on let’s say which geographic zones you’re flying to or how, you know, how far you’re flying. It’ll charge you a certain amount of points for the certain class of service. So the value really depends on what you use it for.

Ricky
And the more time you spend studying the charts and the sweet spots within the charts, the more likely you are to extract the highest value there. So after airline programs, we then have fixed value points. So when I say by fixed value points are programs like Scotia Rewards or CIBC Aventura rewards, or let’s say BMO Rewards.

Ricky
These programs, you know, they all give you a certain fixed value for every point that you earn, which you can then usually apply against travel. So an example is Scotia Rewards which is basically has a fixed value of one point equals one cent.

Ricky
And you can then make any travel purchase on your Scotia Rewards card, whether it’s a flight, hotel or car rental, and then you can go onto your, you know, Scotia online dashboard and redeem those points against that travel purchase at that fixed rate.

Ricky
So the advantage of fixed value points is that they’re simple to use, right? You know, you’re getting this fixed value. You don’t need to worry about studying any rules and charts, you can just go make your travel purchase and then apply your points against that purchase.

Ricky
Now the disadvantage is that once again, the value is fixed at one cent per points and you might not be able to extract higher valuations like 5, 10, 15 cents per point. But you would if you did study a flexible award charts and you know, redeem your points for let’s say, a business class or first class.

Ricky
And finally, we have transferable rewards, which is kind of the best of both worlds because they can be used as fixed value points. You know, if you just have a travel purchase that you’d like to make, you’d like to use your points for it without the hassle of, of looking into all the rules and charts, then you can use your transferable rewards in that purpose.

Ricky
And since they’re transferable these points can also be transferred out to a variety of different airline and hotel partners as well. So the best transferable rewards in Canada would be American Express Membership Rewards which can be transferred to Aeroplan and British Airways Avios at a one to one ratio.

Ricky
As well as hotel points like Marriott Bonvoy, for example. And the other big one would be RBC Avion. RBC Avion points actually can be transferred to a handful of frequent flyer programs and redeemed for very good value there too.

Ricky
Or as I said, these points can also be applied directly to a travel purchase if you just prefer that simplicity. So really transferable points best of both worlds and are probably the most important points currency to prioritize earning.

Money Mechanic
Yeah, I think are a lot of our listeners are going to be pretty familiar with how to optimize their credit cards, if they’re been on a cashback. Trying to optimize that in the past, but if they’re looking for travel, and you mentioned the Avion and the Amex ones…

Money Mechanic
And that flexibility I think will be attractive to a lot of our listeners that maybe don’t want to have multiple credit cards or, or be churning all the time. And just the ability to transfer those between programs. That sounds very powerful to me.

Money Mechanic
I’m sure it would resonate with listeners that would like to optimize those things. So those two cards are really nice to have in Canada. But when it comes down to really accumulating points as a beginner, we have to start talking about churning. Can you just kind of give us a sort of overview of what that looks like as a beginner? How do I start going about churning cards?

Ricky
Sure, yeah, I agree. When you’re first starting out as a beginner, the real way to sort of level up your points earnings, if you don’t have you know, huge organic spending is to quote unquote, churn the cards, which is basically the idea of getting the cards purely for the signup bonuses.

Ricky
And then with a view of cancelling the card and eventually, perhaps within the first year so that you don’t pay the second year’s annual fee, and then reapplying for it in the future in order to get that bonus again. And, you know, this is a practice that’s perfectly aboveboard and legal perspective.

Ricky
But you, some credit card issuers may not actually like it very much, because obviously, it can be unprofitable for them. So that’s kind of why some people might be, you know, feeling a little touch and go about it.

Ricky
But generally in Canada, it works pretty well. You look for the credit cards, one of the best signup bonuses out there. Generally speaking, when you’re starting out, it’s it’s safest to hold the card for at least six months before thinking about canceling it.

Ricky
The reason for that is because of the impact on your credit score, right? When you open a card for six months and keep it open for six months. It’s no longer too new to report to the credit bureaus and instead it’s treated as in good standing so it actually contributes positively to your credit score.

Ricky
And that’s why we recommend to hold for at least six months. And then you know, let’s say that eventually you do decide to cancel if you do want to reapply for the card and get a shot at getting that bonus again, then again, it’s recommended to leave at least a six month gap there.

Ricky
And that’s really just about your relationship with the issuer, you don’t want to come across as you know, you’re just trying to get the bonuses and being a bad customer in general, right, you want to at least give them some opportunity to make profits as well.

Ricky
So you want to be spending regularly on your card ideally, and not coming across as you’re purely there to turn right. The bottom line is you don’t want to make that intention too obvious.

Money Mechanic
Right, so you’d basically open a card, get the bonus, a lot of them are going to have a minimum spend, you make that minimum spend, but you continue spending on that card for say that, like you said, maybe six months or whatever you feel is appropriate. Yeah.

Ricky
Exactly.

Chrissy
That’s a good point because I tend to just get the bonus and then stop my spending. Then I leave it for a few months and then I cancel. So it’s great to have these very specific, actionable things that we should keep our our eye on and and to do so that we’re not taking advantage in a way that’s going to hurt the overall system and make it look like we’re just out for the points and then we’re gone.

Ricky
Yeah, I think I think there, you know, there are cards out there that makes sense to spend on a day to day basis to in terms of the returns on spending. And those can be the cards that you prioritize in terms of your spending.

Ricky
After you’ve completed that minimum spend, there are cards out there that, you know, don’t offer as competitive a return on your spending. And for those, you could just think about, you know, perhaps putting a few small purchases on it every now and then.

Ricky
And I think the more the more serious people who are, you know, try to try to apply for as many cards and earn as many points from the signup bonuses as possible. Most of their spending is going to be going towards some of that minimum spend right in order to unlock the bonuses that they’re chasing.

Chrissy
So, if our listeners would like to pursue a more minimalist approach and just get one or two cards that will just serve long term, they don’t have to keep switching around from card to card. What are a few that a handful or less that you might recommend that people just hang on to long term? They don’t have to worry about, you know, thinking about a new card every few months?

Ricky
Right. It’s a good question. And I think a lot of people would probably benefit from a minimalistic approach. If they don’t want to, you know, go all gung ho with the credit card applications. I think it goes back to the fact that the transferable currencies are the most valuable…

Ricky
Because they offer the best of both worlds, right in terms of the simplicity of fixed value points, and the flexibility and higher value of frequent flyer programs. So like I mentioned, the two best transferable currencies in Canada would be American Express, and RBC.

Ricky
And that’s kind of where I would focus my attention on if I just wanted to build a kind of minimalistic credit card portfolio. So I would probably choose to have one American Express card and one RBC card. Because remember, not every issuer out there accepts American Express.

Ricky
So you always want to combine that with an RBC Visa, for example. And the two cards, they’re are probably recommend for most people would be the American Express Cobalt and the RBC Avion Visa Infinite.

Ricky
Now the Cobalt is very unique card in the sense that it gives you five times the points on food and drink purchases, which is an incredible return pretty much unparalleled right within Canada in terms of that five times the points return.

Ricky
And I think since food and drinks, which includes groceries dining, food delivery services, and you know, cafes and bars and stuff, since that’s such a big chunk of spending for most households, I think it makes sense to choose the Cobalt as one of your core cards to hold on to…

Ricky
And then combine that with the RBC Avion which you would use as a Visa card wherever the retailer doesn’t accept Amex, in order to rack up some of your points. which you can then again, transfer to a variety of frequent flyer programs.

Chrissy
That’s perfect. I love how you just streamlined it and outlined it so clearly there because even me I, I would say I’m kind of an intermediate. I’m intermediate with my knowledge of credit card points. And it’s hard for me to wade through all that’s out there, all the noise, and figure out what would be the most beneficial but simple for for me to use. Thank you for sharing your knowledge.

Money Mechanic
Yeah, and I always find that every time I look on, you know, Rate Hub or any of the sites and kind of try and compare cards. The first thing I always see is the signup bonus. So it’s hard to sort of get past that initial bonus…

Money Mechanic
And dig in and go well, what’s gonna give me more value with my day to day spending as I work towards a bigger goal. And because I haven’t done much with doing travel miles and points before, I haven’t spent a lot of time into that.

Money Mechanic
I do dig more into the cashback in the past but I’m definitely at the point. Now I think I’m going to add a card into the rotation here to start doing ratings the miles and points to as we’ve I’ve got some time obviously right now before we travel again, so maybe it’s a good time to start leveraging up for that.

Money Mechanic
Now before we move on too far, we talked a little bit about churning, you mentioned organic spending, which I think is fairly obvious. That’s our day to day type normal expenses. There’s another like type of spending, which I actually misunderstood…

Money Mechanic
Because when I first heard what manufactured spending, I thought it was buying a gift card so that you could spend it later on but that’s not actually manufactured spending, by definition, that’s just, you know, using it’s an opportunity to spend ahead of time maybe to make your the signup payment requirement done that you know, you’re going to spend the money.

Money Mechanic
So manufactured spending without going into some crazy detail on this, but it’s a really interesting subject just give us a little bit of a high level look at what manufactured spending is and how people that want to really level up their points accumulation are gonna need to do some of the research and learn how to do this for themselves.

Ricky
Sure. So manufactured spending. Yeah, you’re right. So something like buying gift cards, and then using that gift cards for your regular spending, that still falls into the category of spending that you would have done anyway, right, you’re just kind of different or bringing it forward to spend right now.

Ricky
Whereas manufacturers spending, the idea there is that you’re putting purchases on your credit card, that can be easily liquidated into cash, and then you then use that cash to pay off your credit card and bring you back down to a zero balance.

Ricky
But then what you’re left with is the points from that purchase. So you kind of need to you know, think about this process a little bit and think about you know exactly how that works. But basically, it’s about generating points on your credit card through putting purchases on it that you can then easily liquidate into cash and then pay off.

Ricky
So obviously, this is something that you know, seasoned practitioners, who are very familiar with the process can use to generate huge amounts of points, because it just looks like purchases, regular purchases on your credit card.

Ricky
But having said that, seasoned practitioners tend to be very secretive about the exact methods that they use, to manufacture spend, because it’s something that necessarily imposes a cost onto a third party in the process of generating points, right.

Ricky
So one example from the past might be the Royal Canadian Mint used to sell these face value coins that you could buy on their website. So it was like $20 for $20, you could pay with a credit card, and then you would get this coin that was worth $20, that was legal tender…

Ricky
Which you could then use to pay off your credit card. So then people you know, bought up thousands of dollars worth of these points. And then you know, you use the thousand dollars to pay off the credit card leaving themselves with thousands of points on their account.

Ricky
So when you think about this method, you need to think about who was actually paying for those points that people were earning. And the answer is the Royal Canadian Mint was bearing the cost of everything right?

Ricky
They were, you know, producing this face value coin that was supposed to be a collector’s item. But then they were also accepting the coin back from the banks where these, you know, weird, big coins are being deposited, technically as legal tender.

Ricky
And then they were, you know, they’re bearing the cost of transporting those coins back to the Mint, and also paying the credit card transaction fees, the interchange fees on every transaction on the website that people were ordering for.

Ricky
And so eventually, because this imposes such a big burden on the Mint, they shuttered the program, and they stopped issuing the face value coins. And so the idea is yeah, manufacturer spending imposes a cost on a third party.

Ricky
It’s somewhat exploitative, and that’s why people don’t like to talk about it too openly. Because if the methods, you know, got widely distributed, if everybody started doing it, then the methods would be shut down.

Ricky
It’s definitely very high level very advanced method to generate points. I would say something that not everybody, absolutely not everybody needs to pursue. Only if you’re really, really serious about wanting to travel the world and business class or first class, then it’s something to consider.

Ricky
And if you do you know, if you’re interested in at least want to hear more about the subject, then I would say the best way to actually learn more is to attend some in person events with people who know their stuff.

Ricky
People in the miles and points community, where it tends to be much more open to talk about this stuff than online where nobody really knows each other. And there’s always the chance of, you know, speaking to too many people and getting it shut down.

Chrissy
Interesting. Yeah, that’s what I’ve heard, like, both in Canada and the States where it yeah, it has to become kind of a secretive thing so that it doesn’t get shut down. because too many people are taking advantage.

Ricky
Yeah.

Chrissy
The, Ricky, part of the reason why we wanted to get you on the show now is because the landscape has changed a little because of the environment we’re in with the pandemic, and all travel has stopped.

Chrissy
So we’re wondering, as expert you are, what kind of strategies should listeners… should anyone who’s interested in miles and points be focusing on right now, since we can’t travel? What, what should we be doing?

Ricky
Right. Most of the advice that I have given so far right, is, is applicable during ordinary times when people are traveling when you’re always thinking about, you know, what’s the next big trip I can go on these days?

Ricky
Obviously, there’s lots of uncertainty across all industries, including this one. So one of the elements of uncertainty in loyalty programs is that you know, nobody really knows whether the the future of the loyalty programs will remain the same whether or not they’re going to be devalued or the rules are going to change and stuff.

Ricky
So the idea is right now the most important thing is to not have all your eggs in one basket, right? Not be collecting, you know, hundreds of thousands of the points only in one program, because on the chance that that program gets devalued or the rules change unfavorably…

Ricky
Then the value of your points, entire points holdings has decreased, right? You want to remain as flexible and as versatile as possible. And again, it would go back to those transferable rewards currencies. If you held you know, major balances in American Express points, RBC Avion points…

Ricky
Then let’s say that one of the transfer partners, let’s say, you know, let’s pretend that Aeroplan changes the rules and makes it much more unfavorable in the future for redemptions right? You’re kind of protected from that devaluation because you still have the opportunity to transfer your points to different programs…

Ricky
Like British Airways or Delta or American Airlines, or WestJet, or hotel points too. So you’re definitely insulated from single programs devaluing if you focus on transferable currencies. Like American Express, and RBC.

Ricky
In addition, I would also say that right now there’s a real case to be made to perhaps take things a little easier than ordinary times in terms of racking up points quickly. And I say that again, because nobody really knows when we’re going to be able to travel again… you know what that timeline looks like?

Ricky
And so it could make sense to spend this time kind of doing more research and understanding what the possibilities are, and thinking about your own travel goals and developing strategies before jumping into action. hopefully sometime soon in the future when we’re able to travel again.

Chrissy
That’s great advice. I think all of us need a bit of guidance right now with so much stuff up in the air. It’s helpful to hear your thoughts on it and helps me personally because I have been collecting kind of haphazardly.

Chrissy
And now it it helps me realize that yeah, if we have all our points focus in certain programs is a bit of a risk. And it would be helpful to maybe start considering those.. what are those? The transferable points. That they sound like they have a lot of value, especially in times like these.

Chrissy
So maybe we’ll move on to the next point we’re going to talk to you about: what should we be looking at as in the future, as far as booking travel? Should we just be focused continuing to focus on learning about the systems and accumulating these more flexible points? Do you have any ideas on what we should be looking ahead to as far as planning and booking future travel?

Ricky
Yeah, it’s a good question. And it goes back to what I was saying about, nobody’s really sure about the timeline in terms of when we’re going to be able to travel. So the strategies as a result are a little bit all over the place.

Ricky
And there are a few different items to talk about, but I’ll try to touch upon all of them. One of them is, you know, the future of whether or not we’re going to be able to get value out of our points compared to, let’s say, just paying cash for travel for flights and for hotels, for example.

Ricky
You know, I’ve talked about how the reason that we’re able to get such high value out of our points in ordinary times is because we’re able to redeem for business class or first class. We understand that, you know, those fares that people pay for business class…

Ricky
Regular people who buy these tickets are business travelers, right? That’s the reason why the fares are so high because business travelers just pay a large amount of money for for these fares often on the last minute basis too.

Ricky
Now, with the future of travel uncertain, with the future of business travel uncertain because people are doing more work online, etc. nobody really knows if those fares are going to stay nearly as high. And indeed, we’ve already seen like in the past few weeks or so we’ve already seen a bunch of cash fares for business class flights and economy class flights that are way below the usual amount, right?

Ricky
Because, again, nobody’s traveling right now, it makes sense, the cash fares are lower. I think for the foreseeable future, we’ll see cash fares that are generally lower than what we’ve expected to see them in the past.

Ricky
So there’s definitely reason to kind of also think about the cash side of paying for travel in addition to rewards points, right? When you think about the relative value that you could be securing, so that’s one thing.

Ricky
The other thing is, is now the right time to be planning and booking travel? And I think, and I think that depends on, you know, your appetite for traveling soon after, let’s say, the worst of the pandemic passes, right.

Ricky
I think it will be a gradual process in terms of governments relaxing the travel advisories and countries opening up their borders and relaxing the requirements for quarantines, for example. So it depends on if you’re willing to kind of play that game and trying to travel as soon as possible.

Ricky
Or if you feel more comfortable waiting for everything to blow over first, maybe you’ll be waiting, you know, six months, one year from now, before taking a trip. And whatever decision you make. Another thing that you need to be thinking about is how you’re paying for these flights and hotels, and especially flights.

Ricky
And I say that because right now the airlines all around the world are strapped for cash, right? They have negative revenue because more people are canceling than booking travel, obviously, because nobody’s traveling.

Ricky
And so what’s been happening what we’ve been observing is a worrying but somewhat understandable trend, where if you book you know, a ticket with an airline, and they’re the ones who canceled your flight, then they actually refuse to provide you with the full refund to your original method of payment.

Ricky
And instead they they provide you with the travel credit for the next 24 months which is, you know, under under law, they’re supposed to give you a full refund. So that’s a risk that you’re taking by booking tickets right now, booking regular tickets with your cash.

Ricky
And instead, I would say for anybody who has points on hand, use your points to book trips that you’d like to take over the next six to 12 months. Because even if those trips need to be canceled, the loyalty programs have been a lot more generous about providing those refunds refunding your miles and the taxes that you’ve paid compared to the airline’s themselves who badly need to hold on to that cash.

Chrissy
That’s so interesting. And I found in the past too, that loyalty programs do tend to be more generous with their refunds. They often don’t even charge a fee or if they do, it’s much smaller than if you had paid in cash.

Ricky
Yeah, it’s also a benefit of loyalty programs in ordinary times too, because you’ll find that a lot of their cancellation policies are much more friendly. Sometimes they don’t charge a fee if you’re canceling, let’s say 60 days or more before your date of departure…

Ricky
And even if they do charge a fee, it’s like 75 bucks, and you get all your miles back, for example, compare that to oftentimes when you’re booking, let’s say, the cheapest economy class ticket. It’s fully non refundable, right? It’s like take it or leave it.

Ricky
Or even if you cancel, it becomes a travel voucher that you have to use in the future. So in general, traveling on points is much more flexible than traveling the normal way. And and that’s one of the reasons we love it so much.

Chrissy
So personally, for you, what are your plans? Are you going to be booking travel? Are you going to wait for six months, 12 months, or are you going to start booking earlier than that? Because there might be some deals to be had?

Ricky
Yeah, I’m definitely on the more eager side, right. I love traveling. I built my whole website around the idea of traveling as much as possible. And so I’m looking to obviously get going as soon as it’s safe and appropriate to do so.

Ricky
Now exactly what when that is, I’m not sure, but I think my strategy will be to book trips and reschedule my existing trips for the future, but with the understanding that they might not materialize, and I may need to make further changes or push it further into the future as well.

Ricky
So I’m staying flexible. Right now, for example, I was supposed to take another like round the world trip in May, but I’ve pushed that into August. Some people are still saying, like, you’re not going to be able to, you know, enter these countries by August, and there’s a good chance that that happens. And I’m comfortable with the fact that I may need to call that trip off eventually, as well.

Ricky
But yeah, I’m just remaining flexible and keeping an open mind in terms of being able to make the bookings, again, using my points instead of cash to take advantage of the flexible cancellations. But also having that open mind and being willing to cancel if need be.

Chrissy
So if someone like me, needs to be booking on cash because I’m a family of four and it’s really hard to accumulate enough points to book a trip all in points for a family of four, would you recommend it’s probably safer to hold off then?

Chrissy
Because we don’t know what the refunds are going to be like in a year from now. If we were planning to travel in a year, it would it be safer to hold off on booking anything on cash? And if you have enough points and use that, but if not, maybe don’t make cash bookings right now.

Ricky
I think right now, like as, as of the time that we’re recording this, I think that’s probably true. I know that many passenger advocacy groups in Canada are working hard to have, you know, have the Canadian transport agency, have the government review these rules on refunds…

Ricky
And kind of step in and, you know, stick up for consumers rights in terms of if the airline cancels your flight, you’re entitled to a full refund. Right, end of story. Until that happens, yeah, I would kind of observe the situation and see if there’s any changes to this worrying practice of the airlines just holding on to everybody’s money.

Ricky
Having said that, you know, I have noticed that in the US and in Europe, the governments have stepped in and have said that airlines should be providing the refunds. And they’ve given airlines a little bit of a relaxed timeframe to do so.

Ricky
But they have said they have kind of put their foot down and said that, yeah, it is your obligation to provide the refunds. So if you’re booking travel, you know, to Europe or on a European carrier, then they will be subject to those rules.

Ricky
But again, it you know, if you’re more risk averse, it is a situation that’s worth monitoring for a while before jumping in on a hot deal.

Chrissy
So that covers my questions. We have a few more but…

Money Mechanic
I’ve got a I’ve got a really important…

Chrissy
Yeah, okay…

Money Mechanic
Really important question. This cant, this can’t wait. Do you have any idea, how… do you keep track of how many credit cards you’ve had?

Ricky
I do I do. You need the you need the organizational skills right. You need to be on top of everything. So…

Money Mechanic
For fun, how many of you had in your lifetime for travel, for accumulating miles and points?

Ricky
Um, yeah, that’s a question that I get all the time. And I’m just pulling up my spreadsheet now, because I, you know, I don’t keep it off the top of my head, but so I think I personally have had 45 in Canada, open and closed life to date.

Money Mechanic
I thought it would be more actually interesting, okay.

Chrissy
Yeah.

Ricky
Yeah. And here’s the thing. I know, I know, a lot of people out there actually do have a lot more, because they, you know, they go for like 12 new cars per year or something. But then that’s just under my name in Canada.

Ricky
You know, there are more dimensions to this game to, obviously getting credit cards for your household for your family members, for your friends. And there’s the US side of the game to us credit cards, obviously, much more lucrative than they are here.

Ricky
So across, you know, all all the accounts that I manage, maybe across all geographies, it’s probably closer to 60, 70.

Money Mechanic
Wow.

Chrissy
Wow!

Money Mechanic
That’s, that’s pretty cool. Yeah, well, I think we, you know, we’ve just barely scratched the surface. And that’s why we wanted to have you on the show because you’re a wealth of knowledge. And definitely let our listeners know where they can go and dig into this. where they can find you.

Ricky
Yeah, absolutely. So I mostly share my content in in blog form over on PrinceofTravel.com. That’s my website, I usually publish seven to eight times per week in terms of new content. And, you know, there’s always lots of new stuff to talk about exciting news and developments in the miles and points space…

Ricky
As well as my own analysis, and advice on the best deals and the best opportunities. In addition, I also publish video content on my YouTube channel. So Prince of Travel, you’ll be able to find it. And that’s really, I noticed that there were a lot of YouTubers in the US were talking about credit cards and optimizing your credit card holdings and portfolio anf stuff…

Ricky
But not really anybody in Canada doing it. So I decided to also jump into the video space too. And that’s been a lot of fun. And I know a lot of people have found that valuable. And finally, you know, I’m on Instagram a lot.

Ricky
I share the highlights of my travels, you know, the fancy business class pictures and stuff that’s kind of showing people the end results right and getting people interested in what’s possible and learning more about that.

Ricky
Yeah, so I would say those are the three main platforms that you will find me on PrinceofTravel.com, the YouTube channel, and the Instagram.

Chrissy
I would throw in your email list too. I’m your, one of your email subscribers, and you often send out these last minute deals or these breaking news articles that we need to pay attention to if we’re serious about earning points. So join Ricky’s newsletter it’s it’s been really helpful for me I’ve I’ve learned a lot and I’ve gained a lot from it.

Ricky
Yeah, absolutely. And thanks for that, Chrissy. If you’re on PrinceofTravel.com, you can join the newsletter which you’ll receive on weekly basis every Sunday, that gives you the latest, you know summaries of the posts of the week as well as the biggest news from the week.

Ricky
You can also choose to join my Insiders email list, which is basically a license for me to email you whenever I want, when time sensitive deals and just thoughts that come to my mind and stuff like that. Yeah, I hope to see you all on the list too.

Money Mechanic
Well, and fair warning to our listeners. If you start watching Ricky’s videos, you’re gonna get caught up, he has got an awesome intro to your videos, and the music’s quite catchy. It’s stuck in my head.

Ricky
Yeah, I would agree with that. Actually, I find myself watching the intro quite a few times… editing too.

Money Mechanic
Yeah, it’s a good one. Yeah, I enjoyed all your videos and it’s been an absolute pleasure talking to you today. There’s so much to learn in this area and for any of our listeners that are interested in it. Ricky’s a great place to start with his blog and his YouTubes.

Money Mechanic
And yeah, it’s I’m kind of a little bit excited about this. Now there I do have some time to learn more about it and that’s sort of downtime. And I’ve never really put as much thought into this as I have recently. So thanks again for being on the show. Great talking with you.

Ricky
Thanks so much for having me. Chrissy and Mister Money Mechanic.

Chrissy
Yes, thank you, Ricky, we’re happy that you are sharing what you know, in the Canadian space because there’s not enough info and you put out great content. So thank you for sharing it. And thank you for coming on to the show.

Ricky
Yeah, it’s my pleasure. Thank you guys.

Transcribed by Otter.ai

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