Big Question, Real Answer...Are Points, Miles, and Status Worth Your Loyalty?
We’ve become an incentive-based society where we should earn a point or mile for every breath we take! Our wallets and purses are filled with rewards cards, credit cards, etc. In terms of travel, are they really worth it? The answer…it depends.
WHO REALLY BENEFITS
Business Travelers - If you travel for work, points/miles/status are like a bonus and well earned for the true road warriors. When someone else is paying for them, pile them up!
Travel Hacks – These people play the game of applying for numerous credit cards, earning the points, then canceling them. The travel companies have caught on and you usually have to spend up to $5,000 on the cards in the first few months to get the bonus points or miles they advertise. Unless you can regularly charge those amounts, can make sure you pay off the cards so you don’t get charged interest, and aren’t worried about your credit score, this is not a wise option for most travelers.
Cruise Travelers – Once you gain status on a cruise line, you don’t loose it and you can keep building to higher status levels. You can also have that status on the partner lines of that cruise company. It’s not like with airlines, hotels, and rental car companies where you have to meet certain criteria to keep your status every year.
Long-Term Award Travelers – Long-term award travelers apply to many of the rewards programs out there and gain freebies over time without loyalty to one. They take a few big trips each year, get great deals, and will be rewarded over time. They aren’t racing for a free night or flight ASAP.
IMPORTANT ITEMS TO CONSIDER
A “Free” Night – If you want one free night at the Marriott Marquis Times Square in NYC, that will run you 45,000 points. You earn 10 points per $1 with the Marriott Rewards program. That means you have to spend $4,500 at Marriott’s or get the bonus points off their credit card to get that free night. Maybe the rate that night at the Marquis is $350. It looks good that you get something free worth $350, but maybe you could have saved $1,000 by choosing different hotel options instead of being wedded to Marriott’s. You gained a free night, but might have lost $1,000 in the process. With all that said, this is an example only. I’m a business traveler and proud Marriott Rewards Platinum Member!
A “Free” Flight – Airline credit cards offer up to two free flights for signing up for their credit cards. You also get perks like a free checked bag or priority boarding. Most of these credit cards have an annual fee for example $99, with the first year free. If you keep this card for five years, that's $396 in fees and your “free tickets” aren’t so free anymore especially if you ever carry a balance and pay interest on your charges as well.
Redemption Rates Can Change – Airlines and hotels can change their redemption rates at any time to use your points and miles. Last month, American Airlines increased their redemption rates on international travel. Delta and United did so in 2015. When this happens, your points and miles can lose significant value.
Low-Tier Status is Hardly a Status Anymore – Airlines and Hotels are gutting most of their low tier of status to give their higher tier status members more exclusive benefits. That’s why you’ll see upgrade lists 50 names long on airlines and nothing more than a thank you for being a member with some extra bonus points each stay from the hotels.
Most Points and Miles Have Expiration Dates – Each program is different, but you’ll need to usually stay or fly once in a year or two to hold onto your points and miles. If you lose your points or miles to expiration, you can usually pay a fee to get them reinstated.
Use an App Like AwardWallet to Track All of Your Point and Mile Programs – Once you load all of your award program and log-in information into Award Wallet, you can open the app and see all of your point and mile balances, status levels, and expiration dates. You’ll also get notifications in advance of your miles expiring. Its also great to have all of your award program account numbers in one easy-to-access location.
Use Points and Miles on Big Ticket Items – Let your points and miles give you the greatest value. Don’t spend 25,000 miles on an airline ticket that costs $300 (spending 83 miles per dollar). Spend 50,000 miles on an airline ticket that costs $1,200 (spending 42 miles per dollar).
BOTTOM LINE
Frequent a travel company because you enjoy the brand, service, or experience. Remember though that loyalty has limited rewards and benefits for many travelers. The focus should be great deals for the few major trips you take each year and begin to consider yourself a long-term award traveler. Sign up for many different rewards programs, earn points, keep an eye on expiration of your rewards, and save a lot of money in the process.
