Why Middle Class Budgets Are Cracking and How to Use Travel Points Before They Devalue

Summary

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NerdWallet's Smart Money Podcast

Episode: Why Middle Class Budgets Are Cracking and How to Use Travel Points Before They Devalue

Hosts: Sean Pyles, CFP®, Elizabeth Ayoola
Guest Expert: Megan Coyle, NerdWallet Smart Travel
Date: May 14, 2026

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Episode Overview

This episode tackles two central themes:

1. The mounting financial pressures on the middle class in the U.S., featuring a data-driven discussion with NerdWallet journalist Ana Helhosky.
2. Smart strategies to maximize travel rewards before they lose value, including real-world advice for using travel and credit card points, as demonstrated by Sean Pyles’ personal summer vacation dilemma.

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Financial Pressures on the American Middle Class

(Main Content: 03:12 – 10:49)

Key Discussion Points

• "K-shaped" vs. "E-shaped" Economy

  • K-shaped economy explained: After COVID, higher earners (the "upper branch" of the K) have done well, while lower incomes have suffered (the "lower branch").
    • Ana Helhosky [03:35]: "Picture the letter K with two lines diverging...Higher earning households were thriving...Meanwhile, lower income Americans were struggling."
  • Shift to "E-shaped" economy: Analysts now see the middle class (earning $56,000–$170,000 a year) squeezed in the "middle bar"—with top earners, middle class, and lower earners as the E’s tiers.
    • Ana Helhosky [05:12]: "The shape of the economy is now looking more like an E, with middle class Americans comprising the middle bar of that letter."

• Mounting Strain on Middle Class Budgets

  • Rising essential costs (housing, groceries, utilities) and stagnant wages are eating up household budgets.
  • Over 1/3 of middle-class families struggle to make ends meet; 20% can’t afford to live in their metro area.
    • Ana Helhosky [05:44]: "A December report from the Brookings Institution found that about one third of middle class families struggle to make ends meet."
  • Disparities by ethnicity: Affordability challenges are more acute in Latino, Native American, and Black households.
  • Many are living paycheck to paycheck; 25% have critical expenses that exceed 95% of their income.

• Debt and Vulnerability

  • Middle-income households are increasingly reliant on credit cards and more likely to carry month-to-month balances than both higher and lower earners.
    • Ana Helhosky [06:28]: "Federal Reserve data from last year shows middle income households are most likely to have a credit card and carry balances from month to month."

• Budgeting Under Pressure

  • The 50/30/20 budgeting framework (50% needs, 30% wants, 20% savings/debt repayment) is becoming hard to follow; essentials are now often 70–80% of income.
    • Elizabeth Ayoola [10:27]: "A lot of households are finding that their needs category is swallowing way more than half of their paycheck."
  • Hosts and guest recommend building any emergency buffer possible, cutting high-interest debt, and reining in recurring expenses.

Notable Quotes

• Ana Helhosky [07:16]: “A lot of people are just one step back away from falling behind.”
• Sean Pyles [07:52]: “The top 10% of earners alone account for rough half of all consumer spending in the country.”
• Elizabeth Ayoola [09:29]: “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.”

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Maximizing Your Travel Points Before They Devalue

(Main Content: 15:07 – 42:25)

Sean’s Travel Points Challenge

• Sean is planning a birthday trip to Chicago and has amassed ~250,000 Alaska (now called Atmos) points and 100,000 Marriott points (transferred from Amex).
• He wants to use points for flights and hotels, and asks expert Megan Coyle for help.

Key Insights & Practical Strategies

Understanding and Redeeming Airline Points

• Atmos (Alaska) Points Strategy

  • Use Atmos points not just for Alaska, but for partner airlines like American (both are within OneWorld).
  • Flexible dates can drive the point cost lower, but Sean prefers fixed dates.
  • Typical domestic flights cost 9,500–20,000 points each way; Sean spent much more to fly first class both ways.
    • Megan Coyle [18:48]: “The advice has been to book flights as soon as you’re ready and you find a price that you’re comfortable with.”
  • First class can cost tens of thousands per ticket, and may not be the most efficient use for short flights.
    • Megan [21:37]: “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.”
    • Sean [21:48]: “How would you have done it?...considering that for me, comfort was a big priority.”

• Calculating Value: Cents Per Point

  • Calculate cents-per-point by dividing cash cost by points cost. Aim for at least 1¢ per point for general value; Atmos points are valued at about 1.2¢ each.
    • Megan [19:15]: “We actually have calculators on NerdWallet’s website...generally you want to try to get at least $0.01 per point for your points.”

Strategies for Hotel Points

• Marriott Points: What to Know

  • Hotel points are generally a weaker value than airline points—often below 1¢/point.

  • Redeeming 100,000 Marriott points will rarely cover a full week at a good property; luxury hotels may be 150,000+ points per night.

    • Megan [26:14]: “Hotel points are generally worth a little bit less than airline miles in most cases...most of the hotel points are worth less than $0.01.”
    • Megan [27:08]: “I looked up...the Gwen...Oh my gosh, 177,000 Marriott points per night.”

  • Best Redemption Practices

    • Never transfer points “speculatively”—only move points when you have a property, dates, and cost in mind, as these transfers are usually one-way.

    • Marriott still offers "Fifth Night Free" on points bookings—book 4 nights, get the 5th free.

    • Megan [27:19]: “We always say not to transfer points speculatively...But you did sort of have a redemption in mind. It just didn’t work out.”

Accumulating and Rebuilding Points

• Creative Point-Earning Tactics

  • Use portals like Rakuten to earn Amex points instead of cashback on online purchases.
    • Megan [31:16]: “One thing I do with my Amex card is I earn extra Amex points through rakuten...just activate it and bam, you’re getting cash back on your purchase...But you can opt to earn amex points instead.”
  • Take advantage of new rewards programs: e.g., Bilt’s home payments, dining, and credit cards. Use category spending bonuses if you can, but without overspending.
    • Megan [35:27]: “...The Bilt rewards program is this loyalty program...They also have credit cards...They’re partners with Alaska Airlines and the Atmos rewards program.”

• Don’t Hoard—Burn Your Points

  • Points devalue over time through “point inflation”—redemption prices creep up.
    • Megan [36:25]: “Airlines and hotels can kind of quietly raise prices...you might not even know that you’re not getting as much for your 100,000 points as you would have before.”
  • Use them regularly for best value—even if the balance feels impressive to watch grow.

• Comparison Shopping Tools

  • Use award search tools (e.g., "Points" and "Gondola") to scan for the best redemption rates on flights/hotels across partners, maximizing utility with less effort.
    • Megan [40:09]: “Some examples are points. Yeah, they actually won our 2026 best of awards for best award search tool. For hotels, there’s a program called Gondola.”

Notable, Relatable Moments

• Sean [15:09]: "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."
• Elizabeth [26:14]: "Hotel points...we're talking about half of a cent. Everyone. That is just such a stingy amount of rewards."
• Megan [29:40]: “When your points balance is dropping, that means you’re doing it right, you know...there are new ways to earn more points every year.”
• Elizabeth [33:10]: “I'm partnering with my boyfriend, who also has that [Amex] card, and I've told him that he has to give me his lululemon credit every month so I can buy new workout outfits.”

Final Advice for Listeners

(41:30)

• Megan [41:30]: “Try just letting the points take you where they’re going to take you...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.”
• Sean [42:08]: “Okay, you're saying relinquish control. I might have to talk with my therapist about that one.”

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Key Timestamps & Segments

• Money News / The New Middle Class Squeeze: 03:12 – 10:49
• Listener (Sean’s) Travel Points Q&A: 15:07 – 42:25
• Calculating Point Value: 19:15
• Marriott/Amex Transfer Pitfalls: 24:07 – 28:31
• Comparing Airline vs. Hotel Points: 26:14
• How to Rebuild Points / Creative Earning: 31:16 – 34:06
• Why to Use Points Quickly (Devaluation): 36:25 – 38:45
• Award Comparison Tools: 40:09

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In Summary

• The middle class is being financially “squeezed” by inflation, housing, debt, and stagnant incomes, often running on tight or negative margins, regardless of income level.
• Travel points and rewards can provide major value, but it pays to know their real-world value, avoid hoarding, and book as soon as a good redemption is available—especially as point “inflation” erodes their buying power over time.
• Use budgeting frameworks for clarity, focus on key priorities (emergency funds, debt payoff), and explore creative, passive ways to earn more points.
• For both money management and rewards optimization, flexibility and planning ahead yield the best value.

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For more expert travel advice and point strategies, check out NerdWallet's sister podcast, Smart Travel!

Transcript

[A]

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[B]

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Services not available in all areas the following is a paid sponsorship, not an endorsement by NerdWallet's editorial team. Today's episode is sponsored by Bilt.

[A]

You've heard me talk about Bilt as the loyalty program that lets you earn points on rent wherever you live, and they just leveled up even more. As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.

[B]

This is thanks to Bilt's three new credit cards, the Palladium card, Obsidian card and Blue Card. All three can turn your housing payments, rent or mortgage into flexible rewards, so you can choose the card that fits your lifestyle without missing out on points and exclusive benefits.

[A]

Built points can be redeemed at top airlines and hotels, Amazon.com purchases, future rent payments, and so much more. Built points have also been ranked by top publications as the industry's most valuable point currency.

[B]

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[A]

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[B]

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 value from them? Me either. So this episode we're going to talk with another nerd who does have the answers. Welcome to NerdWallet'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 Pyles.

[A]

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 Ana Helhosky is back once again to talk about what shape the economy is in.

[C]

Hey, Sean. Elizabeth. Yeah, this 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 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. They're 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.

[B]

And that seems like a pretty familiar story I've 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?

[C]

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 to be those earning between roughly 56,000 to $170,000 annually. Now, that group is the largest in the US comprising just over half of the population.

[A]

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. Mortgage rates are high. Yes, if you're listening, thank you. Landlord mortgage rates are high, as you would know, Sean. And also job security is uncertain.

[C]

Yeah, it is. And the middle class is starting to crack under the weight of it all.

[B]

Okay, and what do you mean by crack exactly?

[C]

Middle class Americans are starting to spend differently. 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.

[B]

Oh.

[A]

So what does the data tell us about how financially stretched middle class families really are right now?

[C]

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. Now, it analyzed income and affordability figures across 160 US 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, 39% of black families and 27% of white families.

[B]

So what does it actually look like when families are technically getting by but they have almost no breathing room?

[C]

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. And it's why we're seeing middle income households increasingly in the middle of the 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.

[A]

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.

[B]

Right. Or a medical bill or a car repair or bulking up savings.

[C]

Yeah. A lot of people are just one step back away from falling behind.

[B]

So let's break down the other tiers a little more. At the top of the E are the higher earners. And I imagine, Elizabeth, for you as a visual learner, the top part of this E would be way higher up than the middle tier.

[A]

Thank you.

[D]

Yeah.

[C]

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 rough half of all consumer spending in the country. That's According to a second quarter 2025 consumer spending data by Moody's Analytics.

[A]

All right, we talked about middle income earners where most Americans live. So now what happens to those with lower incomes?

[C]

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, et cetera. 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.

[B]

So what does your place in this E economy actually tell you about your financial stability and ability to handle what comes next?

[C]

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 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.

[A]

It's also bleak, guys, but I'm hopeful as an eternal optimist. So if someone listening feels like they're somewhere in the middle of this E, stretched 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.

[B]

Yeah, a budgeting framework can help you see how much of your income is going towards needs versus wants and debt payments and savings.

[A]

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, NerdWallet uses the 503020 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.

[C]

Yeah, if you're realizing that essentials are taking up a very high portion of your income, like 70% or 80%, that tells you something important, your budget may not have room for shocks right now.

[B]

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.

[A]

Well, thank you Ana, for this bleak but endingly optimistic episode. Also for teaching us visual learners about the K versus E economy.

[C]

Always happy to help.

[A]

Up next, we're going to answer a question and the question is 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. Whatever your money question is, please leave us a voicemail. Or you can text us on the Nerd hotline at 900-1730-6373. That's 901730, nerd. 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.

[B]

Or if you feel like it, you can shoot us an [e-mail] in a moment. This episode's money question, which is my money question. Stay with us. The following is a paid sponsorship, not an endorsement by Nerdwall's editorial team. Today's episode is sponsored by Bilt.

[A]

You've heard me talk about Bilt as the loyalty program that lets you earn points on rent wherever you live, and they just leveled up even more. As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.

[B]

This is thanks to Bilt's three new credit cards, the Palladium Card, Obsidian Card and Blue Card. All three can turn your housing payments, rent or mortgage into flexible rewards so you can choose the card that fits your lifestyle without missing out on points and exclusive benefits.

[A]

Built points can be redeemed at top airlines and hotels, Amazon.com purchases, future rent payments, and so much more. Built points have also been ranked by top publications as the industry's most valuable point currency.

[B]

Your housing payment is most likely your biggest expense. Make it your most rewarding. Find the card that fits your lifestyle and Apply today at joinbuilt.com smartmoney that's J O I N B I L T.com smartmoney make sure to use our URL so they know we sent you. Terms and limitations apply subject to approval and eligibility.

[A]

BILT cards are issued by column NA member FDIC pursuant to license for MasterCard International Incorporated.

[B]

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[B]

Quint.com smartmoney Today we're breaking down exactly how to maximize your travel points for a real trip miles, hotel points, when to transfer, and how to actually use them before they lose value. And that'll help us answer today's money question, which comes from me.

[A]

All right, Shawn, what is it this time? What's your question?

[B]

Okay, 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.

[A]

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 sponsor, Smart Travel. Welcome back to Smart Money, Megan.

[D]

Thanks for having me, you two.

[B]

Hey, Megan, thank you for coming on and indulging me because I have so many questions for you. A real travel expert here. 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, like, maximize points. So where do you think is a good place to start?

[A]

Hmm.

[D]

Okay, let's start with those Alaska miles, which are now called Atmos points. Yes, those are pretty 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. 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 flights.

[B]

Too much of a control freak to have flexible dates. But I love your thinking. Even just one day, I wish I

[D]

was that way off, you know?

[B]

Yep. Even just one day, I'm not gonna do it.

[D]

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 gonna make a den in your huge stack of Atmos points. You have a lot of ways to get there. And one thing I wanted mention is that Atmos 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 Atmos 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.

[B]

Okay, interesting. I, for some reason, have, like, a weird brand grudge against American and United, for that matter. Alaska has 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.

[D]

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.

[A]

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 points or instead to use cash?

[D]

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 would have to spend. We actually have calculators on NerdWallet'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 $0.01 per point for your points, because if you were to redeem your points for cash back or in a travel portal of some sort, you could usually at least get $0.01 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 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.

[B]

Mm. Okay. This is where I end up feeling lazy when it comes to all the points in the cash. And I just think it's not worth my time to be doing these calculations. I'm very glad we have a cut calculator at NerdWallet that can help me do that. We'll link to that and the other evaluation page mentioned in the show notes here. My decision was further complicated by the fact that I have a companion pass with my Atmos card. 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 points 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.

[A]

No.

[D]

How many points did you use?

[B]

Tens of thousands of them over for two tickets. Did I make a big mistake there, Megan?

[D]

I mean, that sounds like a lot considering I think you can get a lot of Domestic flights in the US on at most rewards points for about 10 to 20,000 points per way. So I guess, I don't know.

[B]

But for a first class ticket.

[D]

Okay. A first class. Yeah.

[B]

You're still saying you made a mistake.

[D]

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.

[B]

Thank you. That's what I wanted to hear justify my bad decision making. How would you have done it? That's what I want to know. Considering that for me, comfort was a big priority. Priority. I wanted to be in a nice seat and, you know, maybe get a glass of champagne for free.

[D]

Oh, okay. Well, the glass of champagne for free. I would try to visit a lounge first.

[A]

I knew you mean to say that I would too, though.

[D]

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 Atmos rewards card. I have the summit card, and that one gives you two Alaska lounge passes every quarter. And so that probably would have been my move is just to use my two lounge passes and get some champagne before the flight. Um, but I generally save a lot of my at most rewards points when I want to fly first or business class for international flights that are a little bit longer. So I can have as many meals, as many snacks, as many drinks as possible before we land.

[B]

Yeah, yeah. Because my flight to Chicago I just about four hours, so it's not horribly long. But 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. In fact, maybe I want to keep hanging out in this plane because it's so comfy.

[D]

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. 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?

[A]

I'm stuck on bunk beds.

[B]

I want a 20 minute power nap. 4 hours stuck in a bunk bed sounds kind of miserable. What if you want to sit up? Are you stuck in the bunk bed?

[D]

Yeah, you kind of can't sit up. Super. Well, depending on which bunk you have.

[B]

If it was an overnight flight, I'm totally down for that. But then four hours Also isn't enough to sleep all night.

[A]

Can you choose your bunk roomy?

[D]

I mean, if your companion also buys a bunk bed space, then 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.

[B]

Wow.

[A]

I'm still stuck on that.

[B]

I think you need to do some investigative reporting here, Megan.

[D]

I know, I'm so curious.

[A]

So many questions.

[D]

Personally crawl into the bunk beds for you all and let you know how it goes, please.

[B]

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, I transferred all these points over to Marriott because we were at an Airbnb that was less than ideal. And then I almost was able to book a hotel room, but then something happened with their website where I 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, 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.

[A]

Oh.

[B]

So I've never really used Marriott points before. What's maybe best practices here?

[A]

Ooh.

[D]

Okay. So similarly to the way I tried searching your Atmos 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 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?

[B]

My husband and I will be there for about a week.

[D]

Okay. So that might be tough with only 100,000 Marriott points.

[B]

And I was hoping to 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.

[D]

That might be difficult unless you're staying at an airport hotel.

[B]

That's not going to happen. Yeah, I want to be near the lake.

[D]

Okay.

[B]

It's going to be a little more expensive.

[D]

Yeah.

[A]

Megan, 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 100,000 points isn't going to get you far with hotel points. How do they differ?

[D]

Hotel points are generally worth a little bit less than airline miles in most cases. You can see all of the airline programs and hotel programs that we analyzed for evaluations and most of the hotel points are worth less than $0.01. So you know, you're getting maybe 0.7 cents, 0.6 cents and some, I mean we're talking about half of $0.01. Everyone. That is just such a stingy 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 night. 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 amazing. Marriott property is called the Gwen. And I was like, let me just look and see how many points it is. Oh my gosh, 177,000 Marriott points per night.

[A]

How many years would it take to accrue those points?

[D]

Right, exactly.

[B]

So what I'm hearing is that I made another mistake by transferring over to Marriott. Would you have done that or no?

[D]

I understand the situation you are in. We always say not to transfer points to speculatively, which means not having a redemption in mind, 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. 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, 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.

[B]

Yeah. And I assume those have to be Consecutive days, right?

[D]

Yeah.

[B]

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.

[D]

There you go. Okay. This sounds like an amazing trip, Sean.

[B]

It's gonna 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 gonna be really lovely. But something I've been kind of grappling with, besides the fact that I realized 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 Atmos summit card, but that said, now my balance is much lower than it was just a few weeks back 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?

[D]

You know, I pour one out for it. I'm out there drinking my rooftop cocktail at some hotel, being like, there goes my 100,000 points. I used to book this hotel today. One thing I try to remind myself is that it's actually better to use your points consistently. 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 completely different type of experience. So I think the possibilities are really exciting anyway.

[B]

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?

[D]

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?

[B]

Yes, I'm thinking of canceling it soon.

[D]

Oh, no.

[B]

Okay, we can have a conversation about that later.

[D]

Before you do, one thing I do with my amex card is I earn extra amex points through rakuten. Have you heard of rakuten before?

[B]

Yeah, I have, yeah.

[D]

Yeah. It's generally known as a cash back 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 cash back 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 rakuten to earn amex points. And Sean, Elizabeth, you would not believe the bonuses on this rakuten 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.

[B]

Yeah. What is typically a really boring purchase anyway, You've made into a huge opportunity to get a lot of points.

[D]

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 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 Lululemon $75 quarterly credit. Right.

[A]

Megan, you're gonna be proud of me. Can I interrupt you and tell you that actually, I'm partnering with my boyfriend, who also has that card, and I've told him that he has to give me his lululemon credit every month so I can buy new workout outfits. And I'm gonna use mine too. A win, Double win.

[D]

Hell yes.

[B]

$150 every quarter for Lululemon alone. Good on you, Elizabeth. That's.

[D]

Wow. Wait, is. I think it's $75.

[B]

Hers and her boyfriend's, right? Is that.

[A]

Yeah, exactly. So.

[B]

Com.

[D]

Oh, wow. Okay. You can actually afford a pair of leggings then. Because that's the problem with that.

[A]

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.

[D]

There you go. Okay. And you can use Rakuten now. So since you have an amex card, when you go to Lululemon to make the purchase, just make sure your Rakuten bonus is activated and then you'll be earning extra AMEX points on it as well.

[A]

So 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

[D]

way 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, 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 cardholders. Like if you fly with some of these airlines and you don't have a card, you're truly missing out on some benefits.

[B]

My issue, Megan, is that I'm so lazy when it comes to travel credit cards that I really admire how much time you and Sally, your co hosts and smart travel spend thinking about how to maximize your points. But I simply can't channel my ADHD hyper focus into this channel. How can I earn more points without spending a lot of time? Ooh, more money.

[D]

That's a great question. So like I said, the shopping portals is one of my number one ways. I'm a built stan for built credit card. The built. Honestly, you don't even have to 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 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 Atmos points, I really am. You don't want another credit card? Looking into the Bilt program could be a good one.

[B]

Okay, so it sounds like signing up for programs like the Bilt program or even getting on the Rakuten, 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.

[D]

Yeah, exactly.

[B]

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, because there's essentially point inflation. Right.

[A]

And they're hoarding.

[D]

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 cash back. 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 Amex 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 $0.01 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 get slightly more value for your points, but otherwise you're just getting this sort of constant $0.01 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 stays. 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 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 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?

[B]

Okay. Y. Yeah, yeah, yeah. What I'm hearing is I should probably book my hotel room sooner than later.

[D]

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 100,000 points as you would have before.

[B]

Okay, that's helpful. Well, I'm wondering if you can think of anything else besides what I've already outlined that people do wrong when it comes to booking hotels or flights with points.

[D]

The thing I think people are doing wrong with their points and 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 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.

[B]

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.

[D]

Some examples are points. Yeah, 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.

[B]

Okay, well, I have already transferred my points, 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.

[A]

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. Oh, I did use points for that. Yeah. It 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.

[B]

So Ohio is quite the exotic location to use your planes to travel to.

[A]

Well, I'm going to see a friend, so not very exotic. It's a play date vacation.

[B]

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 is, I guess, doing everything wrong here, it was one final piece of advice. What would that be, Sean?

[D]

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 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.

[B]

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.

[D]

Thanks so much for having me, you two.

[B]

All right, Megan, can you do the honor of reading us out?

[D]

I would love to. 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 [e-mail] join us next

[A]

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.

[B]

Here's our brief. 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.

[A]

This episode was produced by Tess Figland. Hilary Georgie helped with editing. Eve Krogman edits our audio and video. And a big thank you to NerdWallet's editors for all of their help.

[B]

And with that said, until next time, turn to the nerds. Hey Smart Money listeners. We have a brand new email newsletter and it's completely worth signing up for, especially since it's free.

[A]

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