Points 2: Earn Aeroplan Miles with No-Fee Credit Card

In Points 101 I began by saying I like to focus on travel rewards and highlighted three of the loyalty programs most popular with Canadians. Next I'd like to discuss credit cards that earn points and show you how you can earn travel without paying hefty annual fees.

Several Canadian banks issue credit cards that earn 1 Aeroplan mile for every dollar spent. And though they usually come with a sign-up bonus, they also carry an annual fee, generally in the $120 range (plus extra for secondary cards). Since I value an airline mile at about 1 cent (that's open to debate, but let's assume), the sign-up bonus can make the fee worthwhile for the first year, and even thereafter, if you spend over $25K a year. There are other benefits that come with these cards, such as travel insurance, that may have additional value for you, but if, like me, you're not a high roller and don't need those benefits, there's a free way to earn miles.

Remember how in Points 101 I mentioned you can earn Aeroplan miles by shopping at Sobeys? You do this by setting up your Club Sobeys account to automatically convert points to Aeroplan miles (2 Club Sobeys points equals 1 Aeroplan mile). But you can also earn points with a Club Sobeys MasterCard, issued by Bank of Montreal. It gives you 1 Club Sobeys point (equal to ½ Aeroplan mile) for every dollar you spend anywhere. And it's a no-fee card. So, pay $120 year for 1 Aeroplan mile per dollar spend, or pay nothing and get ½ Aeroplan mile per dollar spend. As I say, this could be a good deal if you're putting less than $25K a year on the card.

I got a few thousand Club Sobeys points/Aeroplan Miles when I originally signed up for the card about two years ago. It was issued by Citi Bank then, but this summer Bank of Montreal bought Citi's credit card business in Canada. Next month, I'll receive 2,600 Club Sobeys points (equalling 1,300 Aeroplan miles) when I get my new BMO Club Sobey's MasterCard and make a purchase with it, but you can cash in too. Club Sobeys and BMO have an introductory offer on right now. You'll get a welcome bonus of 2,000 Club Sobeys points/1,000 Aeroplan miles after making a single purchase with the card. You can apply online. Enter offer code CS1.

I carry the Club Sobeys MasterCard as a back-up when I travel, but haven't used it much. That's because I have a free card that earns even more Aeroplan miles (and miles on many other airlines besides, if I choose). I'll tell you about it in part 2.

So, if you're keeping track, I belong to PC points, but only incidentally; I don't actively collect. I don't collect Air Miles, mainly because of poor earning potential where I live. I belong to Club Sobey's, but only to earn Aeroplan miles. I have a Club Sobeys MasterCard, mainly for the sign-up bonuses. Aeroplan is a focus program, but I don't have the annual spending to make paying a $120 annual fee worthwhile when there are cheaper ways to earn miles.

Points 1: Canada's Favourite Points Programs

A couple of conversations with friends lately about my points and miles collecting hobby (obsession?) led to requests for me to post on the subject. So over the next few weeks, I'll try to cover the basics of how to get the most out of loyalty programs. Keep in mind, these are my preferences; they may not always be suitable for you, but I hope you'll find something of use here.

For starters, many points experts advise that you focus on one program so you can achieve rewards quickly. I take the opposite view. I believe in signing up for almost any program, focusing on several, and taking a patient, long-term approach. There are a number of reasons why, but one is that I collect with the goal of travel rewards (hotels stays and flights), rather than merchandise or cash-back rewards. That takes a lot of points and that takes time. I find the dream of travel to be more inspiring than cash-back, and the value of travel rewards greater than merchandise.

I'll begin by discussing three of the programs most popular with Canadians.

PC points are earned through a variety of activities with President's Choice Financial, chiefly through the use of its credit and debit cards. Points can also be earned through bonus offers at supermarkets that sell President's Choice products. Rewards come in the form of groceries and other products sold in the stores and are redeemed right at the checkout, using your credit or debit card. No separate membership card is required. Ease of earning and redeeming makes this program the right one for many people.

I do have a PC Financial chequing account, but not a credit card, so my point earning is minuscule. The reason I don't focus on this program is because $20 off groceries doesn't inspire me (see paragraph 2, above), and because I can use a different credit card at the supermarket to earn points in another program that has more value to me.

Air Miles can be earned through a variety of retailers and affiliated credit cards offered by the Bank of Montreal and American Express. It is perhaps the most popular loyalty card in Canada. It seems almost everyone has one. Except me.

The main reason Air Miles has little value to me is that few of their partners are located in my town, so I have little chance to earn. But if you're a BMO customer and can shop at Air Miles retail partners, this program can be valuable to you, especially if you like merchandise or grocery certificate rewards.

That brings me to Aeroplan. Though a separate company, Aeroplan is essentially Air Canada's frequent flier plan and offers reward flights not only on Air Canada, but also on its partners in the Star Alliance, such as United, US Airways, Lufthansa, Singapore, Air New Zealand, and many others. As well, points can be redeemed for hotel stays, car rentals, cruises, and merchandise.

Aeroplan miles can be earned through flights, retail and travel partners, and affiliated credit cards and other products at a range of financial institutions. Aeroplan's gas and grocery partners (Esso and Sobeys) are located in my town, and that's a big reason why I collect Aeroplan miles.

Next time, in Points 201, I'll take a look at points-earning credit cards, with the emphasis on earning points and miles without having to pay an annual fee.