Don’t worry, this isn’t intended to be a doom-and-gloom post about why the loyalty points game is crumbling to an end. It’s simply a reminder that while saving and hoarding points might be fun, it’s also a bad idea. You should make an effort to spend your points as soon as possible, no matter what program they’re in.
Signing up for credit cards is easy. Even “manufacturing” spend can be easy for many people. Many of us have saved so many points in so many programs that a devaluation doesn’t just upset us, it truly angers us. And that’s fine, get angry…especially when the loyalty program doesn’t give any advanced notice. But there are a couple of things you need to realize:
1. Devaluations Are Constantly Happening
They happen every year, sometimes more often than that. Hotels adjust reward categories on an annual basis (and sometimes even more often than that). Airlines usually adjust award charts every 1-2 years, but some adjustments can be complete overhauls for the worse. And you have absolutely no recourse – your points don’t accrue interest…they sit there and lose value every time a devaluation happens. Points are not an investment, and you should make sure to not save them like one. Use your points!
2. Lesser-Used Programs Have Devalued
Aeroplan can be useful in certain circumstances, especially if you have Amex points. While we appreciate that they recently gave advanced notice about changes, most of those changes still suck. Avianca Taca is quite possibly my favorite airline for loyalty points. I bought points for cheap and have been using them to fly on Singapore Airlines Business Class a ton, something you can’t do with US and United points. They had two devaluations in a week recently, with no announcement.
Speaking of no announcement, Club Carlson gave no announcement when changing a lesser-used transfer option. But with the amount of points they’ve been handing out recently, I wouldn’t be surprised if they devalue the hotel program as well.
3. Some of Your Favorite Programs Haven’t Even Devalued Yet
US Airways probably has the most generous premium-cabin award chart for airlines right now (90K round trip in Business Class to North Asia, 110K to Australia/New Zealand), and it’s been that way for a looong time. And you know all those Ultimate Rewards points you’ve been earning for the last 2 years? The ones from the Sapphire Preferred card, the Ink Bold Cards, and your Freedom card? The most popular programs to transfer these points into are usually United for airfare on Star Alliance and Hyatt for hotels. These programs haven’t had major Award/Reward chart changes in quite a while, and I wouldn’t be surprised to see some kind of a change over the next year.
I don’t have any special knowledge of any changes. I’m simply guessing. But just think about it – when was the last time either of these programs changed significantly? We know Delta is likely making drastic changes to their program, and surely the US/AA merger will bring about some negative changes to their award chart. That leaves United, and you know they won’t be far behind.
As for Hyatt, I’m going with similar logic. Hilton just blew up their program and IHG has made it much harder as well. SPG devalued the very popular Cash & Points option. Marriott didn’t exactly sit tight either. Hyatt is the only one left.
Here’s a good rule of thumb: When you see a loyalty program start to hand out points, there’s probably a devaluation coming. It happened with Hilton (6x at drugstores, 1:2 transfer ratios from airlines, etc.) and it happened with Avianca Taca (buy miles for 1.3 cents). Who else has been handing out points for free lately? US Airways constantly has 100% bonuses on purchased miles (they’ve run these monthly for quite a while), and Club Carlson cards earn 5x on everything. With many people essentially earning 5x on United and Hyatt, those ones seem likely targets as well.
I know this blog and many others might help you earn points faster than you previously thought possible. Just make sure that you use them just as frequently as you earn them, otherwise that award you were waiting to book might suddenly become out of reach.
Protect Yourself
Besides using your points, there are a couple of options you have to protect yourself. The first one is to accrue points in programs like Amex Membership Rewards or Chase Ultimate Rewards. Even if United and Hyatt are devalued, you can still transfer those points to programs like Virgin Atlantic, Southwest, Marriott, and others if you had UR points. At least you’ll have options, even if they weren’t as good as before. It’s better than having all your eggs in the United basket before they devalue, since those points would be stuck in that account.
Your second option is against the rules of loyalty programs. Let’s say a friend is about to fly overseas on a round trip ticket that will cost $1,300. And let’s say you have the points to get that person there and back on the same flights, but you can do it with 60K points. You can book the flight for them using your points, and have them pay you, for example, $1,200. You get 2 cents per point in value and get to burn some points, while your friend saves $100. Win-win!
Except…it’s against the rules. Airlines won’t find out unless you or your friend tells them, so just know that it’s against the rules. But it’s another option for the “criminals” among us.
Again – use your points. Don’t let them sit there. Believe me…it’s quite infuriating to learn that the points that you used to value at $X have dropped by 33% overnight. Now, go make time for that vacation!
Jesus. Didn’t realize there were so many just this year.
I feel a hyatt devaluation soon!
I agree 🙁
Inevitable and sad. I think they’ll add a higher category.
That was a good summary. Thanks for sharing your poignant perspective. You’re right, I guess this is the kick in the pants that I needed to get me going!
Burn burn burn!
Agree with you. I bet Club Carlson would devalue soon since they give away bonus so often. SO does United and possibly Hytt thanks to Ink Manufactured spending. But keep the UR points with Chase is also risky. Who knows someday Chase may send you a letter saying you used the card as not intended, so your points are forfeited. So my advise is 1) yes, use them as quick as possible. Make the same effort as much as you earn them. 2)at least have two frequent flyer programs such as UR and SPG or others.
I agree 100%.