NerdWallet's Smart Money Podcast - Why Middle Class Budgets Are Cracking and How to Use Travel Points Before They Devalue

Starting point is 00:00:00 Hey, Elizabeth, we have to talk about the newsletter. What newsletter are you talking about, Sean? You mean the new, free, smart money email newsletter? Yes, and I have to say it is so good. It really is. It has clips, episode roundups, and behind the scenes takes from me, you, and our producer, the stuff that makes you feel like you're really part of the show. And listeners, for the record, you actually are part of the show.

Starting point is 00:00:23 I'm going to be sharing personal stuff. You know, I love sharing my business, and I'm going to be sharing parenting tips from an eight-year-old. a single mom perspective. And I am loading up the newsletter with my favorite gardening tips and lots of cute photos from my garden, including my pets, just napping among my flower beds. It's kind of adorable. And the best part is that this newsletter is totally free. So head to nerdwollet.com slash podcast to sign up. For the record, that's nerdwollet.com slash podcast. Come hang out with us. Let's say a certain host of a certain personal finance podcast has a bunch of credit card points and a big summer vacation coming up. Would you know the best way to use those points to get the most

Starting point is 00:01:04 value from them? Me either. So this episode, we're going to talk with another nerd who does have the answers. Welcome to Nerd Wallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles. And I'm Elizabeth Ayola. Later this episode, we're going to be talking about how, yes, it was Sean, who is a certain podcast host, can best use his travel points. But first, our weekly money news roundup, where we break down the latest in the world of finance so that we can help you be smarter with your money. Our news colleague, Anna Helhowski, is back once again

Starting point is 00:01:39 to talk about what shape the economy is in. Hey, Sean Elizabeth. Yeah, this is going to sound a little bit like a Sesame Street episode, but we have two letters of the day today, K and E. So let's start first with K. A few years ago, economists started using the term K-shaped economy to describe the state of the economy. Now, picture the letter K with two words,

Starting point is 00:02:01 lines diverging in different directions from the same center. That's what was happening after COVID. Higher earning households, that's middle and high income, were thriving or driving economic growth. Now, that's the upward line of the K. Meanwhile, lower income Americans were struggling, cutting back and falling further behind. And that's the downward line. And that seems like a pretty familiar story of been hearing over the past maybe 15, 20 years. People at the top are going up and people at the bottom are going down. Right. But here's the thing. Analysts are now suggesting that the K-shape is changing, and that's driven by economic shifts among middle-class households. The table set, middle-class households are considered by Pew Research Center

Starting point is 00:02:41 to be those earning between roughly $56,000 to $170,000 annually. Now, that group is the largest in the U.S., comprising just over half of the population. So it seems like there are so many potential factors that are actually squeezing people from every direction. I am currently being squeezed, guys. Prices are up. Housing costs are high. but thank you to my landlord for not increasing my rent for the past three years. Lucky. Mortgage rates are high. Yes.

Starting point is 00:03:08 If you're listening, thank you, landlord. Mortgage rates are high, as you would know, Sean. And also, job security is uncertain. Yeah, it is. And the middle class is starting to crack under the weight of it all. Okay. And what do you mean by crack exactly? Middle class Americans are starting to spend differently.

Starting point is 00:03:23 So when you're watching your grocery bill climb, your rent's renewing at a higher rate except for Elizabeth, and layoff headlines are in your industry, you start spending differently. And that's exactly what millions of middle-income Americans are doing right now. So those who are ones at the top of that K are shifting downward. And the shape of the economy is now looking more like an E, with middle-class Americans comprising the middle bar of that letter.

Starting point is 00:03:45 Oh. So what does the data tell us about how financially stretched middle-class families really are right now? Here's a good illustration. A December report from the Brookings Institution found that about one-third of middle-class families struggle to make ends meet. It analyzed income and affordability figures across 160 U.S. metro areas and found that at least 20% of middle class earners can't afford to live in those places. The report also found that affordability challenges in those areas tend to vary by ethnicity. So half of Latino or Hispanic families and nearly half of Native American families cannot afford basic necessities compared to 41% of Asian American families,

Starting point is 00:04:24 39% of black families, and 27% of white families. So what does it actually look like when families are technically getting by, but they have almost no breathing room? More households are simply living paycheck to paycheck. A Bank of America Institute report in November showed that in 2025, nearly one quarter of households had crucial expenses like housing, groceries, utilities, childcare, etc. That exceeded 95% of their income. So that means that everyday costs are really eating up the bulk of those households' earnings. Now, to be clear, those figures are primarily driven by lower income households, but middle income earners are in there too.

Starting point is 00:05:03 And it's why we're seeing middle income households increasingly in the middle of the E rather than at the top of the K. Basically, they're staying afloat for now, but it's getting more difficult to do so. And another sign that strain comes from Federal Reserve data from last year, which shows middle income households are most likely to have a credit card and carry balances from month to month. I just want to say as a visual learner, I really appreciate these E and this K illustrations. It's really helping me here. All right. So it seems like when you're spending 95 cents of every dollar you earn and taking on debt, there's no room for an emergency. Right. Or a medical bill or a car

Starting point is 00:05:41 pair or bulking up savings. Yeah, a lot of people are just one setback away from falling behind. So let's break down the other tiers a little more. At the top of the E are the higher earners. And I I imagine Elizabeth for you as a visual learner, the top part of this E would be way higher up than the middle tier. Thank you. Yeah, the top of the E is the smallest group. That's about 19% of the population, and they're earning more than roughly $170,000 a year. In fact, the top 10% of earners alone account for roughly half of all consumer spending in the country. That's according to a second quarter, 2025 consumer spending data by Moody's analytics.

Starting point is 00:06:18 All right, we talked about middle income earners where most Americans live. So now what happens to those with lower incomes? Yeah, the bottom of the E is a group that's been under pressure the longest. They're earning under roughly $56,000 a year. And these households are the most dependent on credit and often the most expensive kinds of credit. So we're talking payday loans, buy now pay later products, high interest credit cards, etc. Many don't have a traditional bank account at all. And for those who do have credit cards, most people are carrying balances from month to month.

Starting point is 00:06:48 So what is your place in this E economy actually tell you? you about your financial stability and ability to handle what comes next. Well, it's increasingly tied to measurable differences in your spending power, savings buffers, and reliance on debt. It also gives you a sense of how well you can weather future economic stress. I want to emphasize there is a lot of uncertainty right now about where the economy is headed. We've got a war spiking prices for oil with more price hikes in other areas likely to come. The Fed is pausing, not cutting rates. The market's doing well for now, but there may be an AI bubble lurking around the corner. Mortgage rates are high. The job market is stagnant. Consumer confidence

Starting point is 00:07:25 is down. And all the while, inflation is still persisting. So there's a lot going on out there and it's looking very messy to people. I know it's looking messy to me. And households that are feeling financial pressure may need to reassess their spending now. It's also bleak, guys, but I'm hopeful is an eternal optimist. So if someone listening feels like there's somewhere in the middle of this E, stretch thin, but still trying to stay ahead, here's where they can start. I would say the first thing is to map out where your money is going every month because a lot of people know their budget feels tight, but they don't necessarily have the figures laid out in front of them. Yeah, a budgeting framework can help you see how much of your income is going towards needs versus wants and debt payments and savings.

Starting point is 00:08:06 Yeah, I will say as of late, I do tend to try to check my spending regularly, but I have been checking every week to make sure I'm paying off my balances in full and I can scale back spending when I've spent too much for that week. But that said, nerd wallet uses the 50, 30, 20 rule as a baseline. Roughly 50% of income goes towards needs, 30% towards wants, and 20% towards savings and also debt payoff. But right now, a lot of households are finding that their needs category is swallowing way more than half of their paycheck. Yeah, if you're realizing that essentials are taking up a very high portion of your incomes, like 70% or 80%, that tells you something important. Your budget may not have room for shocks right now. Yeah. And in that case, the priority may be building even a small emergency buffer, try to cut back on high interest debt if you can, or reduce recurring expenses where possible before things get expensive.

Starting point is 00:08:57 Well, thank you, Anna, for this bleak but endingly optimistic episode. Also for teaching us visual learners about the K versus E economy. Always happy to help. Up next, we're going to answer a question and the question of Sean's about how to use his travel points. But before we get into that, a reminder to send us your money questions. Maybe you have a whole bunch of travel points and you don't know how to use them. Maybe you want a budget for vacation. Maybe you can't agree with your partner on what to spend the summer budget on.

Starting point is 00:09:26 Whatever your money question is, please leave us a voicemail. Or you can text us on the nerd hotline at 901, 730, 63, 73. That's 901, 730, N-E-R-D. We do stalk your comments on Spotify. Please leave us more. We love looking at them. and you can also follow us on YouTube or leave a comment on there as well. Or if you feel like it, you can shoot us an email at podcast at nervalot.com.

Starting point is 00:09:50 In a moment, this episode's money question, which is my money question. Stay with us. Today we're breaking down exactly how to maximize your travel points for a real trip. Miles, hotel points, one to transfer, and how to actually use them before they lose value. And that will help us answer today's money question, which comes from me. All right, Sean, what is it this time? What's your question? Okay.

Starting point is 00:10:17 I love hijacking the show for my own selfish purposes. And today it's all about my summer vacation, which is coming up in June. I'm meeting up with my twin sister in Chicago where we grew up for our 35th birthday celebration. And I have a boatload of points that I really need to use. I've had them for many, many years. And I've talked in the past about how I've often been too lazy to really play the point game. But this time, I'm determined to do it in no small part because airline prices are so stupid expensive right now. So I'm going to use my points and hopefully do it the right way, but I do need some help.

Starting point is 00:10:51 Well, luckily, Sean, we both have that in common. As you know, I was on our sister podcast, Smart Travel, to hash out my own travel credit card issues and questions. And I have made a little bit of progress, but I could make more. To help us answer Sean's burning travel questions, on this episode of the podcast, we are joined by Megan Coyle, one half of our sister podcast, Smart Travel. Welcome back to Smart Money, Megan. Thanks for having me, you two. Hey, Megan. Thank you for coming on and indulging me because I have so many questions for you, a real travel expert here.

Starting point is 00:11:23 So let me start by explaining my situation. I mentioned that I have this summer trip coming up to Chicago to see my twin sister for our birthday. Very excited for it, but travel is going to be expensive this summer, as it is every summer, but especially so right now. And I discovered a few weeks back that I had about a quarter of a million of Alaska points that I built up over many, many years. and I also have a bunch of points from Marriott that I recently transferred over from my Amex account and I want to use those for hopefully lodging. So those are my two main things I want to work out as well as other areas where I can just maximize points.

Starting point is 00:12:00 So where do you think is a good place to start? Hmm. Okay. Let's start with those Alaska miles, which are now called at most points. Yes. Those are pretty great because you have so many of them. So you have a lot of flexibility with what you can do. I looked up a couple of flights for you on the Atmos Rewards website.

Starting point is 00:12:20 It's great because you have this very specific type of airline miles. So you can just do a search right on the Alaska Airlines website. And you can even be kind of flexible with it. So one thing I like to do is hit flexible dates. I don't know how flexible your dates are since you're meeting up with your twin sister. I'm too much of a control freak to have flexible dates. But I love your thinking. I wish I was that way.

Starting point is 00:12:43 off, you know? Yeah, even just one day. I'm not going to do it. Okay, that's fair. You have plenty of points, so I think you'll be able to find a flight that works for you anyway. So I looked up a couple of flights, and it looks like flights to Chicago from Portland are starting at 9,500 at most rewards points. So that's not even going to make a den in your huge stack of at most points.

Starting point is 00:13:07 You have a lot of ways to get there. Yeah. And one thing I wanted to mention is that at most rewards actually lets you book. with multiple airlines, airlines that are partners of Alaska Airlines and Hawaiian Airlines, and both of those airlines are part of the One World Alliance. So you actually are able to book American Airlines flights using at most points. So I wanted to make sure you knew that was an option because you don't just have to fly on Alaska to Chicago. You could also fly American and use your points that way. Okay. Interesting. I for some reason have like a weird brand

Starting point is 00:13:42 grudge against American and United for that matter. Alaska's treated me really well over the years. So I think I'm going to fly with them. And I actually have a bit of a spoiler, which is that I already purchased my flights using points. Oh, good. Actually, you know what? That's a good thing because we don't know what's going to happen with flight prices this summer, especially with rising fuel costs. And there's just a lot of uncertainty in the world. So the advice has been to book flights as soon as you're ready and you find a price that you're comfortable with. So I'm glad you did that. I have a question, actually, just for anyone who may be having the same question as me, when you're booking a flight using points, how do you know whether it's worth it to use the

Starting point is 00:14:21 points or instead to use cash? That's a great question, Elizabeth. So one thing you could do is calculate the cent per point value that you are getting. So you basically compare the cash price of the flight to the points price by dividing the cash price by the number of points you have to spend. We actually have calculators on Nerd Wallet's website that can help you do the calculation if you're not so great at the math. But generally, you want to try to get at least one cent per point for your points because if you were to redeem your points for cashback or in a travel portal of some sort, you could usually at least get one cent per point. But, you know, it can really vary, especially if you have a type of point that maybe is usually worth more. And my team actually

Starting point is 00:15:08 does a huge analysis of how much your points and miles are worth every year. So you could also check NerdWallet's website for our valuations and compare, hey, you know, an at most rewards point is generally 1.2 cents per point. So if I'm getting less than that, then maybe I'll just pay cash instead. Okay. This is where I end up feeling lazy. And it comes to all the points in the cash. And I just think it's not worth my time to be doing this calculations. I'm very glad we have a calculator at NerdWallet that can help me do that. We'll link to that. And we'll link to that. and the other evaluation page you mentioned in the show notes here. My decision was further complicated by the fact that I have a companion pass with my Atmos card.

Starting point is 00:15:47 So my husband and I were debating, do we want to use either of our companion passes? Because he also has the Atmos card. Or do we use Point or do we use Cash? And we ended up going with points because I had so many of them. I was feeling really rich. And I was able to get some first class tickets for us for both ways. to and from Chicago out of Portland. And yes, it did wipe out almost all of my points.

Starting point is 00:16:15 No. How many points did you use? Tens of thousands of them over for two tickets. Did I make a big mistake there, Megan? I mean, that sounds like a lot, considering I think you can get a lot of domestic flights in the U.S. on at most rewards points for about 10 to 20,000 points per way. So I guess, I don't know. But for a first class ticket.

Starting point is 00:16:40 Okay, a first class, yeah. You're still saying you made a mistake. I think that's a lot to pay for a sort of short flight. But, you know, if you wanted to go all out on the first class flights because you have the points, do it. Thank you. That's what I wanted to hear. Justify my bad decision making. How would you have done it?

Starting point is 00:17:01 That's what I want to know. Considering that for me, comfort was a big priority. I wanted to be in a nice seat and. you know, maybe get a glass of champagne for free. Oh, okay. Well, the glass of champagne for free, I would try to visit a lounge first. I knew you're going to say that. I would too, though. I'm not so tied to having the glass of champagne in my airplane seat, if that makes sense. So I actually have an Alaska At Most Rewards card. I have the summit card. And that one gives you two Alaska lounge passes every quarter. So that probably would have been my move is just to use my two lounge

Starting point is 00:17:37 passes and get some champagne before the flight. But I generally save a lot of my at most rewards points when I want to fly first or business class for international flights. They're a little bit longer so I can have as many meals, as many snacks, as many drinks as possible before we land. Yeah, yeah, because my flight to Chicago, just about four hours. So it's not horribly long, For me, that's kind of the point where at the end, I really want to get off the plane. So I'm hoping that I'm not itching in that same way at the end of the four hours. And in fact, maybe I want to keep hanging out in this plane because it's so comfy. There you go. Maybe. It's kind of, it reminds me that Air New Zealand just launched these bunk beds and you can book them for four hour increments.

Starting point is 00:18:22 And we were all debating. Is four hours enough? Or is it too short or is it too long maybe for a real nap? I don't know. What do you think? I'm stuck on bunk beds. I want a 20-minute power nap. Four hours stuck in a bunk bed sounds kind of miserable. What if you want to sit up? Are you stuck in the bunk bed? Yeah, you kind of can't sit up super well, depending on which bunk you have.

Starting point is 00:18:45 If it was an overnight flight, I'm totally down for that. But then four hours also isn't enough to sleep all night. Can you choose your bunk roomie? I mean, if your companion also buys a bunk bed space, then yeah, yeah, but there's six bunk beds in the little sky nest. So you don't get to choose all of them, I would imagine. Wow, I'm still stuck on that. I think you need to do some investigative reporting here, Megan.

Starting point is 00:19:08 I know. I'm so curious, so many questions. Personally crawl into the bunk beds for you all and let you know how to those. Please, yes. Okay. Well, I want to turn now to my Marriott points and the fact that they were at one point, Amex points. And in a stressed panic when I was on my honeymoon in Seoul,

Starting point is 00:19:26 I transferred all these points over to Marriott because we were at an Airbnb that was less than ideal and that I almost was able to book a hotel room, but then something happened with their website where it didn't quite book it. I went back to look at the reservation again. And by that point, the room five minutes later was much more expensive points-wise. I feel like I was getting scammed a little. So I said, I'm not going ahead with this. I'm just going to stick it out in this Airbnb and it was fine. But I do still have all these points. It's around 100,000 points. So I've never really used Marriott points before. what's maybe best practices here.

Starting point is 00:20:03 Ooh, okay. So similarly to the way I tried searching your at most rewards points and what kinds of redemption options you had, I would just go ahead and search on the Marriott website for Chicago as a whole. You know Chicago a lot better than I do since you're up there. So try to find the hotels with the best location. Location matters so much more than any of the other amenities in my opinion. So I would look at it. there and figure out which ones meet the location needs first, and then which ones fall into your points price range. How many nights are you trying to spend there, by the way? My husband and I will be there for about a week. Okay. So that might be tough with only a hundred thousand. Yeah. And I was hoping to

Starting point is 00:20:49 book my sister's room in the same hotel as a gift to her hopefully using points, but it sounds like that's not going to be the case. That might be difficult unless you're staying at, an airport hotel. That's not going to happen. Yeah. I want to be near the lake. Okay. It's going to be a little more expensive.

Starting point is 00:21:07 Yeah. What I want to know is how do hotel points differ from airline points? I know this is a very broad question, but based on what you just said, that a hundred thousand points isn't going to get you far with hotel points. How do they differ? Hotel points are generally worth a little bit less than airline miles in most cases. You can see all the. airline programs and hotel programs that we analyzed for evaluations and most of the hotel points are

Starting point is 00:21:37 worth less than one cent so you know you're getting maybe 0.7 cents zero point six cents and some i mean we're talking about half of one cent everyone that is just such a small amount of rewards yeah yeah and so it's very common to see especially luxury hotels room rates going for more than 100 000 points a In fact, I looked up for your Chicago trip. I was like, ooh, you know, there's a great hotel I've heard about in Chicago. That's a Marriott property. It's called the Gwen. And I was like, let me just look and see how many points it is.

Starting point is 00:22:11 Oh, my gosh, 177,000 Marriott points per night. How many years would it take to accrue those points? Right? Exactly. So what I'm hearing is that I made another mistake by transferring over to Marriott. Would you have done that or no? I understand the situation you are in. we always say not to transfer points speculatively, which means not having a redemption in mind,

Starting point is 00:22:36 not having a property in mind, not having the dates in mind, knowing how much those nights at that property were going to cost before you transfer them. That's kind of what we want to try to avoid, but you did sort of have a redemption in mind. It just didn't work out. And that happens too. Like the availability just disappears one second. And then you're like, oh, no, I can't transfer them back to Amex, you know what I mean? It goes one way most of the time. And so now you have a bunch of points with Marriott and you now have to use them pretty much with Marriott. That's okay though. You know, I think there are so many different properties that fall under the Marriott umbrella. And maybe instead of doing your whole week-long vacation on points with Marriott points,

Starting point is 00:23:21 you could do just a couple of nights. One trick that I really like with Marriott is you can actually pay for four nights on points and get the fifth night free. So that's a great way to kind of maximize the value of your points because you're getting that extra night for free. And again, great for a long trip like yours. Yeah. And I assume those have to be consecutive days, right? Yeah. Okay. Yeah. So that actually might work really well because my husband and I are flying in on Monday and then my twin and her husband are flying in or driving in on Thursday. So, you know, I don't know if I'll be able to get all five nights, but I might be able to get some days out of my points and then just stay somewhere else with my sister. There you go.

Starting point is 00:24:01 It sounds like an amazing trip, Sean. It's going to be really fun. My sister is pregnant right now, and so I'm excited to see her coming along in her pregnancy and seeing all of our Chicago sites together and celebrating our birthday. So it's going to be really lovely. But something I've been kind of grappling with besides the fact that I realize I maybe made a mistake with booking my first class ticket is that there's always a sense of disappointment after I burn through all of my points. Like it took me probably around eight years to get up to a quarter of a million Alaska points. I did just get my sign-up bonus for the Atma Summit card. But that said, now my balance is much lower than it was, just a few weeks back.

Starting point is 00:24:38 And I would like it to get back to where it was and not have to wait eight years. How do you handle a disappointment? Are you just over it? And then how do you work to build it back up again? You know, I pour one out for it. I'm out there drinking. rooftop cocktail at some hotel being like, there goes my 100,000 points I used to book this hotel okay. One thing I try to remind myself is that it's actually better to use your points consistently.

Starting point is 00:25:08 So when your points balance is dropping, that means you're doing it right, you know? So that's reassurance. And the other thing I think about is that there are many ways to earn more points. And in fact, there are new ways to earn more points every year. And it might not necessarily be opening a new credit card because I know not everyone wants to do that every single year. So there are all sorts of different programs that come up. There are new promotions that come up. And I've always been surprised that even though you might spend your points on one thing, the next year, you find a new opportunity to earn points and you might take advantage of that. And then maybe you have a different type of point and you can go somewhere else and have a

Starting point is 00:25:48 completely different type of experience. So I think the possibilities are really exciting anyway. Okay. Are you referring here to the sort of coupon book structure where certain credit cards will have like quarterly categories that are revolving through where this quarter we're giving you X amount more on gas or groceries. Is that what you mean? Yes. There are some credit cards that have quarterly bonuses on certain categories. But actually, that's not exactly what I was thinking of. So you mentioned you have an Amex card, right? Yes. I'm thinking of canceling it soon. Oh, no. Okay. We can have a conversation about that later. before you do. One thing I do with my Amex card is I earn extra Amex points through Racketon. Have you heard of Racketon? Yes. I have. Yeah. It's generally known as a cashback shopping platform. It's an online shopping platform. And basically, you can go through either their website or you can download their online browser extension. And then anytime you're online shopping, if they have a deal or promo for Cachita, with that retailer, you just activate it, and bam, you're getting cash back on your purchase. But the best part is you can opt to not earn cash back, and you could opt to earn amex points instead if you have an eligible amex card. So I actually do this with my amex card is I've set up my racketon to earn amex points.

Starting point is 00:27:15 And, Sean, Elizabeth, you would not believe the bonuses on this racketon platform. like I just bought my contact lenses and for some reason it was 10 points per dollar for 10% cash back on my contact lens purchase which is honestly a couple hundred dollars right because I have to wear contacts every single day and so suddenly I'm getting thousands of points just for buying my $300 contact lens supply. Yeah what is typically a really boring purchase anyway you've made into a huge opportunity to get a lot of points. Exactly and they have all sorts of offers like that. on things I actually like to spend on, like travel. I've been able to get huge bonus points on the tours I've taken and different locations,

Starting point is 00:28:01 on hotels that I've booked with cash. So I'm like, at least I got something. At least I got some extra bonus points. Even, you know, things you like buying. Like, for example, I have an Amex Platinum card and I try to use the Lulu Lemon, $75 quarterly credit, right? Megan, you're going to be proud of me. Can I interrupt you in? tell you that actually I'm partnering with my boyfriend who also has that card. And I've told him

Starting point is 00:28:27 that he has to give me his Lulu Lemon credit every month so I can buy a new workout outfit. And I'm going to use mine too. A win. Double win. Hell yeah. $150 every quarter for Lulu Lemon alone. Good on you, Elizabeth. That's amazing. Wait, I think it's $75. But she's, yes, she's getting hers and her boyfriends, right? Is that what you're saying? Oh, wow. Okay, you can actually afford a pair of leggings then because that problem with that is started. Don't get me started on the cost of the stuff on that website. Okay. I was like I could barely buy something for $75. But hey, two is better than one. There you go. Okay. And you can use racketon now. So since you have an Amex card, when you go to Lulu Lemon to make the purchase, just make sure your Racketon bonus is

Starting point is 00:29:11 activated and then you'll be earning extra Amex points on it as well. This is why we have you on the show. And also, Megan, I love that you're bringing out creative. ways to earn those bonus points because sometimes I find my mind stuck on having to spend more money. And I'm like, I don't want to spend more money to get more points because I don't need to buy, you know, to overspend basically. So I love that there are other ways to do it. 100%. I also get really excited about new cards. I'll be honest, you know, I love traveling on points and just seeing how creative some of the credit card benefits are, I think is fun. So if you are trying to look for more bonus points and you are ready for a new credit card, I would check some of the roundups we have on the Nerd Wallet website for Best Travel Cards.

Starting point is 00:29:58 And you'll find that there are tons of new cards. If you haven't looked in a while, they have a lot of different benefits and benefits that are specific to card holders. Like if you fly with some of these airlines and you don't have a card, you're truly missing out on some benefits. My issue, Megan, is that I'm so lazy when it comes to travel credit cards that I, like, I really. really admire how much time you and Sally, your co-host and smart travel spend thinking about how to maximize your points, but I simply can't channel my ADHD hyperfocus into this channel. How can I earn more points without spending a lot of time? Or money.

Starting point is 00:30:34 That's a great question. So, like I said, the shopping portals is one of my number one ways. I'm a built stand for... Bill credit card. The bill, honestly, you don't even have to use. use the built credit card. But the built rewards program is this loyalty program. They call it like a neighborhood loyalty program. And they let you earn points possibly on rent and mortgage payments, as well as dining out and all these things. They also have credit cards that we talked about a bit

Starting point is 00:31:03 on the smart travel podcast. So that might also be another great option to earn more points. They're partners with Alaska Airlines and the Atmos rewards program. So, Sean, if you're looking for more at most points. I really am. You don't want another credit card. Looking into the built program could be a good one. Okay. So it sounds like signing up for programs like the built program or even getting on the racketeen

Starting point is 00:31:25 having that connection. Just having the systems kind of work for you as you're doing your regular everyday shopping is going to be the easiest way to do it. Yeah, exactly. Something else you mentioned earlier was why it's really important to use your points and not let them devalue over time. Can you talk more about that? because I think that some folks aren't aware that their points do lose value, just like the dollar,

Starting point is 00:31:45 because there's essentially point inflation, right? And they're boarding. Right. Okay. So let's talk about, I guess, some definitions of points. On one side, there are credit card points, and those are the points like Amex points or chase points that you earn through a credit card. And those points can then be used for cashback.

Starting point is 00:32:05 You could use them to book flights or hotels in those issuers travel portals, or you could transfer them to other airline and hotel loyalty programs the way you transferred your MX points to Marriott. So credit card points generally don't devalue as much because they have a standard constant cent per point value for the most part for their redemptions. For example, in Chase, if you redeem your chase points in the Chase Travel Portal, then you're generally getting about one cent per point. unless you happen to get one of these special points boost eligible bookings, I won't go too much into what that is, but basically you could get slightly more value for your points. But otherwise, you're just getting this sort of constant one cent per point value. But then when you transfer your points to airlines or hotels, those loyalty programs often use dynamic pricing and they can charge, you know, more points for more expensive flights or more expensive hotel sales. days. And the thing about this is it can be a little bit opaque, like how much value you're actually getting for your points. And with dynamic pricing, you might not even realize that a hotel

Starting point is 00:33:21 stay, that's $300 would have cost you, let's say, 40,000 points last year. And then this year, it's going to cost you 50,000 points for that same $300 hotel stay at the same hotel. So sometimes, you know, points lose value because of inflation, where, you know, you know, points lose value because of inflation, where the rates of hotels are going up and then they are charging more points, but it's not at the same proportion as it was a year before. Does that make sense? Okay. Yeah.

Starting point is 00:33:48 Yeah. Okay. What I'm hearing is, I should probably book my hotel room sooner than later. Exactly. And same with airlines. This happens because people don't really know the value of their points. And so airlines and hotels can kind of quietly raise prices and you might not even know that you're not getting as much for your 100, thousand points as you would have before. Okay, that's helpful. Well, I'm wondering if you can think of

Starting point is 00:34:12 anything else besides what I've already outlined that people do wrong when it comes to booking hotels or flights with points. The thing I think people are doing wrong with their points in miles is not doing enough comparison shopping across all of them. And I know that sounds really, really hard because you get some type of credit card point. Maybe it can transfer to like 12 or 15 different partners and you're like, am I going to check all these airline programs and see which one has the lowest rates? But the answer is you don't actually have to do that. There are a lot of award search tools out there that let you search across all of these different programs and find the best points prices. I really wish people looked at those a little bit more often. A lot of them have

Starting point is 00:34:58 free versions. So you can kind of get an idea of what points programs might be best for your points. and then book actually the best redemption for you. Okay. I think that would do the legwork for me that I really don't want to do, that I feel a lot of resistance to even engage with. What's the name of maybe one of these platforms, just so I can look into it? Some examples are points, yeah.

Starting point is 00:35:19 They actually won our 2026 Best of Awards for Best Award search tool. For hotels, there's a program called Gondola. We have a whole roundup of these on the NerdWallet website that we can link to, but you should try them. They're really fun. And honestly, it helps you kind of understand the whole ecosystem a little bit better. Okay. Well, I have already transferred my points.

Starting point is 00:35:42 So I'm kind of stuck with Marriott for now and I have my flights. But for my next travel using points. Elizabeth, maybe if you have travel coming up, you can do all these things. I do. And I have been a notorious point hoarder. So thank you for telling me why I should use my points, Megan. Actually, since I came on y'all show, I decided to use my points. I used them this year to book my trip to Barbados.

Starting point is 00:36:02 Oh, amazing. points for that. Yeah, I felt good to not have to pay for the ticket. I'm also going to Florida. I plan to use points for that as well. And I might be going to Ohio. So who knows, maybe I'll end the year spending all my points. I probably have like 150,000 airline points left. Ohio is quite the exotic location to use your points to travel to. Well, I'm going to see a friend, so not very exotic. It's a play date vacation. I've been through Ohio many times before. So yeah, I know it well. Wonderful. Well, Megan, thank you so much for coming on. If you could leave me, someone who,

Starting point is 00:36:33 who is, I guess, doing everything wrong here. It was one final piece of advice. What would that be? Sean, I think you should try just letting the points take you where they're going to take you. So being more open to flexible dates or even a flexible destination, that's one thing I do all the time, is I actually just look at the explore tab on Google flights. There's also an explore tab on some of these points award search programs that I was talking about. And they will just show you, hey, if you want to travel in the month,

Starting point is 00:37:03 of August, here's where you could go for less points. And I'm like, okay, I'll go there. So really having no destination in mind and letting the points take you where you want to go, I think you might be surprised at how much fun it is. Okay. You're saying relinquish control. I might have to talk with my therapist about that one. Well, thank you so much, Megan. And listeners, if you've not checked out smart travel, I highly recommend it. It's super fun. And there's way more about travel and points and everything else on that podcast. Thanks so much for having me, you too. All right, Megan, can you do the honor of reading us out? I would love to.

Starting point is 00:37:36 So that's all we have for this episode. Remember, listener, that we're here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730 N-E-R-D. You can also email us at podcast at nerdwallet.com. Join us next time to hear about how to get out of a debt crisis. Follow smart money on your favorite podcast app, including Spotify, Apple Podcasts and IHeartRadio to automatically download new episodes.

Starting point is 00:38:07 Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Tess Figlin, Hillary Georgie Help With Editing. Eve Krogman edits our audio and video. And a big thank you to NerdWallets editors for all of their help. And with that said, until next time, turn to the nerds.

Starting point is 00:38:32 Thank you.

NerdWallet's Smart Money Podcast - Why Middle Class Budgets Are Cracking and How to Use Travel Points Before They Devalue

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.