This may be the one time when saving and hoarding something of value doesn’t make the most sense. If you are the person that spends money like it is burning a hole in your pocket you might just be in luck when it comes to points. Your points have great value so it is important that you manage them wisely.
I will be the first to admit that having a huge pool of points is enticing to look at. Once your first account breaks into the six digits you begin to feel like a travel pro. (there are some people who have over a million points, not this guy)
Here is the problem with hoarding your miles and points, they decrease in value all the time. Yea I know it sucks, but the airlines and hotels have to keep the upper hand (but not if I can help!). People are flying more each year and people are spending more money each year, both earning us more and more points. That means that airlines and hotels have to devalue points to keep the “happy” balance.
Here are a two recent hits when it comes to earning points:
– American Airlines switched from a distance based to a revenue based earning system
– Chase implemented the 5/24 rule making it tougher to sign up for certain credit cards
Here are a few recent hits when it comes to spending your points:
– Delta is no longer publishing their award chart making it easier for them to jack up rates at-will
– British Airways removed their 4,500 points short-haul redemptions with American and Alaska (cheapest is 7,500 now)
– American Airlines increased their 20,000 points off-season rates to Europe to 22,500 (as well as many other routes)
– Alaska Airlines increased their first class award prices on Emirates by 80% and more
As you can see, most changes that take place are NOT in our favor. Some airlines and hotels give a fair warning when they are going to make changes to their point system but they are not required to. Alaska Airline did not give notice when changing Emirates award redemption, it pissed a LOT of people off.
Moral of the story, your points are worth more NOW than they ever will be, (other than a short-term sale or promo). We can look back at history and see that our points become less and less valuable each year. If you have been thinking about a trip but you really like seeing that huge point count, take the trip! Go!!
Pro Tip: Depending on the points you have available it may make sense at times to just pay with cash instead. Make sure you are getting at least 1 cent per mile when using your points for airfare. If you are really stingy like me, try for 1.5 cents per mile.