Yesterday, I posted an article about my strategy to fly a brand new AWESOME PLANE, to an AWESOME DESTINATION (at least from what I read), for a CRAZY AMOUNT of points. However, the airline is discontinuing the route before they use the new plane on that route. AARRRHH!
The good news is that the route (and older plane) are still available to book for the CRAZY AMOUNT of points but I have to fly the route before September 1, 2019 (less than 3 weeks from now). AARRHHH!
Attempting to book this flight (and others) into the wee hours of the morning generated this public service announcement (PSA)…don’t hoard points!
Racking up credit card points and miles is exciting and it can seem like an ideal way to pay for a dream vacation. However, “stacking” points should not be a long-term strategy as it may not yield the results that you are searching for.
WHAT IS A POINTS DEVALUATION?
A points devaluation is, simply, when your points are worth more today than they are in the future.
Let’s start with an easy example. Even if you do not have any points right now, you’ll be able to follow this example.
First, every airline has a chart with static numbers that tell you how many miles are required to get from Point A to Point B (except Delta and their shenanigans but that’s a rant for another blog).
Example #1: Let’s say that you are interested in flying one-way in economy from San Francisco to Boston. You sign-up for a credit card that allows you to transfer your points from the credit card to the airline that you are flying. The “signup bonus” for the credit card is 50,000 points/miles. You discover through your research that United Airlines offers the best flight for your schedule and they require 10,000 miles one-way.
Although you may not be extracting the greatest value from your points, it is easy to see that you have, essentially, 5 one-way “free” tickets (or 2 round trips and an extra one-way) with this example.
However, the equation can become a bit more difficult when you begin planning more expensive dream vacations.
Example #2: Let’s say that you are interested in flying roundtrip in business class from the US to the Maldives. You sign-up for a credit card that allows you to transfer your points from the credit card to the airline that you are flying. The “signup bonus” for the credit card is 50,000 points/miles. You discover through your research that all airlines require 200,000 miles for your trip.
Obviously, there are a number of considerations when thinking about a strategy for garnering 200,000 points. Each strategy will take time and won’t be easy.
While you are building up your “points stash” for this amazing trip, it could lead to disappointment because you are never guaranteed that your points and miles will retain the value over time. One glaring example (that I referenced above) is Delta Airlines.
In 2015, Delta Airlines stopped publishing an award chart that outlined how many miles you’d need to travel from Point A to Point B (domestic and international). The only way to determine how many miles are required for a trip is to go to their website and search. However, there is a HUGE PROBLEM…Delta can change their rates on any route at any time. Their rates are no longer static like the other airlines.
Search a route on Monday, and Delta could require 10,000 miles. Search on Tuesday and they could require 80,000 for the same trip. Without an award chart, you basically have no way to plan or “save up” for a flight you want to book later on.
There’s always the chance that you won’t be able to redeem your points for the same rewards as you can today.
In the summer of 2018, Chase dropped Korean Air as a transfer partner and eliminated a lot of great Korean redemptions. If you were planning to redeem your points on Korean, you would have been out of luck.
Yesterday, South African Airways announced the end of their Senegal route and you know how I feel about that.
EARN AND BURN MANTRA
You may hear people say “earn and burn” as it relates to points meaning they redeem points as fast as they acquire them. Personally, I think that’s a bit extreme but I also do not fall on the other end of the spectrum where I plan a trip 2 years from now. A lot happens in two years, and in this hobby. If you wait too long you run the risk of devaluation.
Similar to life, everyone will have their own timeline and comfort level when it comes to points.
But think of it this way…why delay your joy? Entertaining dreams of a grand trip is inspiring, but it may bring you just as much joy to take that trip today. So redeem your miles and points soon, if you can, not at some obscure future date.
Do you have a plan for your points? What is your points strategy?