Do Not Store Airline Miles and Bonus Points for Too Long
If you love to travel and do not accumulate miles or credit card points, you should do so. If you’ve already done this, be careful with how long you keep them. Accumulating points for a dream vacation may sound exciting, but I know one word that will ruin all your plans: devaluation.
Miles and points have a specific monetary value depending on the program you earn and through which you earn them. For example, an airplane ticket for $ 400 can be purchased for 25,000 points, which would cost approximately $ 0.016 per point. That’s not much, but if you accumulate enough of these points through regular travel and shopping, you can use them to get tons of free stuff. The problem is that points don’t always have the same value, so they are a pretty terrible investment.
As rewards expert Ben Schlappig of the One Mile at a Time blog explains , keeping a large mile or points balance is a risky strategy. These miles and points are likely to devalue over time. Those points that were once worth $ 0.016 may suddenly become $ 0.008 when the reward company thinks it is. Moreover, points and miles may expire or programs may change in such a way that the rewards you have accumulated become useless. To give a real-life example, here’s a reward-saving horror that recently aired on The Points Guy :
“Overnight, Qatar Airways transformed me from the Qmiles royal family to a beggar. After reading your article on the quiet devaluation of Qatar, I rushed to Qcalculator to see how the cost of rewards changed, and it turned out to be even worse than I expected. The CGK-ORD route that I usually fly cost 190,000 miles in business class and is now 391,000 miles. That’s 106% more! Worst of all, I have hidden 300,000 hard-earned miles in my account, which I have accumulated in three years. I set out to please my parents with next year’s US vacation at QSuite, and while I was 80,000 miles short of my goal before, now I can’t afford to fly with just one person. “
That’s how his glasses lost half their value! A chill runs down my spine. How can you avoid these problems? First, keep in mind the terms of the reward program and see how often the company changes attitudes. In addition, Schlappig believes that when it comes to miles and points, it is best to stick to the “earn and burn” philosophy. Bank points can only be used for what you plan to use in the next year or so. Anything beyond that, and you run the risk that a terrible demon of devaluation will come and ruin everything.