The sole reason anyone earns airline miles and hotel points is to use them for travel. If all you do is hoard points and never enjoy those points for amazing trips, the only person who wins in this situation is the airline. Of course the airline would love it if you don’t use those points, they’ve already been “paid for” via the credit card companies or marketing partner they were accrued from after all. So, unlike most financial rules in life, the lesson here is to spend away instead of saving.
9 Reasons Not To Be A Mile Hoarder
1. They can lose their value: By keeping a large stash of airline miles or hotel points saved up, you always run the risk of the points getting devalued. Over time as airlines and hotels pump out more miles into the marketplace they have to devalue them in order to keep the potential total cost down when customers redeem them. Just think of it as the same as cash and inflation: as more money is printed it will lower the value of the currency. For instance, take the recent Hilton devaluation where the points needed to book a night at a top-tier hotel went from around 50,000 points to 95,000. An unexpected devaluation will leave people scrambling to use up their points by a deadline to redeem at the old rate.
2. They can expire: Although some airline and hotel points don’t expire, most do after an extended amount of time. By continuously earning and using them for trips your account stays active and resets the expiration date, which safeguards them from expiring without you realizing.
3. You forget you have them: Although AwardWallet is one of the best tools to help keep track of all your miles and points, some airlines don’t allow you to link up your account. If you have numerous loyalty program accounts and some with smaller points balances you might forget about an account that you rarely use or doesn’t have enough for an award booking. The best solution is to earn enough points for an award and cash them out.
4. You can travel to amazing places for free: Who doesn’t like to travel for free? If you’re like me, you earn your miles and points for a reason: to take amazing trips for almost nothing. So, what are you waiting for, book that trip and start planning!
5. Don’t think of your points like money: That is, unlike money, points don’t accrue interest or increase in value. In fact, as mentioned above, they generally lose value due to “inflation” (or devaluation of points). With any sort of currency inflation, saving your points is worse than spending.
6. Never booking an award ticket because you cannot book a saver award: Of course your first strategy should be to maximise the value you get from your points by booking the flight you want for the lowest possible amount of points. Ideally this is the case if you can plan far enough out in advance, but sometimes life doesn’t work that way. If you have the time and want to travel, book the ticket–even if it’s double the normal amount of a saver award. You won’t regret it.
7. It might be harder to book awards in the future: With the way things are going, there are fewer and fewer airlines, which means there are just as many (or more) miles in the marketplace and fewer airlines to book awards with. For instance, everyone that has miles with both US Airways and American Airlines can currently book award tickets with both airlines depending on award availability with each airline. After the merger, everyone will be chasing after the same award space availability, so there will be double the points out there, but the same number of award seats.
8. You can always earn more miles: There are virtually endless credit card and promotional offers out there to earn more points. I don’t see this ending anytime soon as it is a great way for airlines and hotels to market new products and get an edge up on a competitor, not to mention it is an important revenue source for them. In this case you shouldn’t be too worried about burning through the remaining balance of your United miles or blowing the rest of your Marriott points on some extra free nights. More than likely you will be able to earn many more without a lot of effort. If you are a super points earning veteran and have applied for every credit card bonus offer out there, look for cards that you can reapply for the bonus of like the Citi AAdvantage Mastercard (every 18 months) or a new product with a bonus like the Barclaycard Arrival Plus™ World Elite MasterCard®. Both currently have a 40,000 mile bonus, so there are 80,000 more miles that can be earned right there.
9. You deserve a vacation: Come on, you work hard, the weather is getting warmer…it’s time to take a trip. When you don’t have to fork out $1,000’s of dollars for a business class ticket or luxury hotel, all you need is time!
And all things in moderation, here are a couple of reasons to save some of your miles:
Save up for some type of super trip. Maybe an around the world business class ticket? Or fly your whole family to a great destination next year?
Saving miles for an emergency (family illness etc.) It is always a good idea to keep an account with enough miles in it for an emergency fund, this can save you thousands of dollars in case you need to get a flight ASAP. Of course you might end up paying the $75 close-in award booking fee, but as least you won’t get price gouged by the airlines for purchasing a last-minute ticket.
*If you liked this post why don’t sign-up to receive free blog posts via email (max of 1 email per day!) or like us on Facebook! And as always feel free to ask questions in the comments below or email me!