Top 5 airline rewards strategies

With an estimated 180 million members of frequent-flier programs and 10 trillion unused frequent-flier miles in circulation, what are the best airline rewards to spend your miles on? If you've done the right thing and accumulated most of your miles with one airline to maximize your redemption power, here's how how you can reap the benefits (or at least try):

Seats. Actual flights are the most popular use of airline rewards, but are also some of the toughest to redeem. Remember the first time you naively tried to redeem miles for a flight and found out that all dates were blacked out, sold out or would cost you triple the miles you expected?

Expiration is another problem with this particular airline reward. In fact, Sen. Charles Schumer (D-NY) recently requested a review of frequent-flier programs for "deceptive business practices" for not giving customers a heads up that they are going to lose accounts or miles. Assuming Sen. Schumer's probe gets nowhere with solving this frustrating airline rewards problem, you need to call way, way, way ahead of your desired days of travel to get seats for the "advertised" miles. And don't neglect to research and manage your mileage program (most airlines allow three years of inactivity before miles expire, though JetBlue, AirTran and ATA only allow one year; Continental allows only 18 months; and Southwest allows 24 months).

Partners. This is where the bigger airlines rewards programs have an advantage. Continental and United; Delta and Northwest, etc., allow you to redeem miles with their partners, which increases flexibility and opportunities to get the flight you want.


Upgrades/Elite Status. Popular with business frequent-fliers, using miles to score an upgrade to first or business class is the true incentive to belong to an airline rewards program. Airlines rewards redemption rules vary -- whereas American and United offer elite members complimentary upgrades from unrestricted fares only, Delta and Northwest allow upgrades from any published fare. Also, Elite members usually get free baggage (no small thing, considering how often airlines are raising baggage fees), access to airline rewards lounges and priority check-in and boarding.

Charity. Did you know you can use your airline rewards to donate to charity? American Airlines' charitable program, for example, is called AAdvantage Charities, supporting Make-A-Wish, Miles for Kids in Need, National Parks and USO. They add 1 mile to every 3 you donate. United's charitable program is Mileage Plus Charitable Contributions, and if you donate more than 10,000 miles, you can choose from a list of supported charities, including Salvation Army, Make-A-Wish, Red Cross, Children's Hospital and Special Olympics.

Magazine subscription. When all else fails, subscribe to a magazine. Most of the bigger airline rewards programs let you redeem miles for magazines; for as little as 400 miles, you can get an annual subscription. Not super exciting, but at least that way, you won't lose the miles, and, for most programs, the redemption keeps your airline rewards account active.

But tighten your seat belt: Airline rewards as we know them could change in the near future. Enter the game changers. Virgin America started its Elevate airline rewards program two years ago, and members first started redeeming points for airline rewards in October 2008.

Elevate offers two airline rewards perks not seen elsewhere: Awards are unrestricted, which means there are no blackout dates or capacity issues; and Virgin airline rewards are points based on the price paid for tickets (five points for each dollar spent) vs. miles flown. Meanwhile, Southwest announced plans to completely revamp its Rapid Rewards airline rewards program and relaunch in 2010. They're already one of the easiest airline rewards programs to redeem miles from -- if they up their game on airline rewards, they could not only benefit their members but members of other airline reward programs as well, should the major carriers feel the need to compete.