How to use your credit card rewards

Dealing with points and miles can be overwhelming. Asking a simple question like “How should I use my Delta miles?” can send you down a Google rabbit hole of points-maximization madness. Many would-be reward travelers simply give up in the face of this complexity.

Unfortunately, much of the information online emphasizes squeezing every fraction of a cent’s worth of value from your points. That might be a helpful strategy for dedicated travel nerds, but it’s TMI for the average traveler.

Most of the value from a given reward program can be reaped by simply understanding the basics. That’s the 80/20 rule in action.

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The 80/20 rule, or Pareto principle, states that 80% of the effects in a given situation come from 20% of the causes. Originally developed by an Italian economist to describe wealth inequality, it has been expanded to other areas such as business and personal productivity.

Practically speaking, following the 80/20 rule means two things:

This applies to personal finance generally, where it’s easy to get lost in the weeds. But it’s especially important in the world of travel rewards, because many of us don’t even know where to start.

Everyone has different points, miles and travel goals, so there’s no “one size fits all” advice for finding the universal 20% of information that yields 80% of the value.

That said, here are some principles for figuring out what matters most to you:

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Don’t want to bother learning the difference between things like elite qualifying miles and elite qualifying dollars? Good news: The 80/20 rule encourages (strategic) laziness. The trick is figuring out what can be safely ignored.

Here are some starting places:

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Travel loyalty programs are designed to be confusing in order to keep you in analysis paralysis. Don’t let that stop you. Start applying the 80/20 rule with your reward travel plans today: Pick out a loyalty program you care about, learn the basics and make your first booking.

Simply using your points and miles instead of sitting on them will put you ahead of 80% of the pack.

Source: USA Today

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