The Counterpoint
The counterpoint is our monthly column, dedicated to having a look at a contrarian view at some of the commonly held beliefs in the miles and points space. Last month, we wrote about how Daily Getaways aren’t really worth your time, given the paucity of quantities and the competition to grab those ‘deals’ in minutes, if not seconds. Today, we’ll go in detail about an aspect about flexible points programs.
Flexible Points Currencies
Flexible points and miles have always been a favorite in the frequent traveler community. You can accumulate these points across different cards and use them based on your preference and convenience.
American Express Membership Rewards and Chase Ultimate Rewards tend to dominate the space when it comes to flexible points currencies. Their programs cover a wide array of alliances and hotel programs and provide some great value. However, all isn’t as rosy as it seems. Given the plethora of changes that have been happening over the last few years, I believe that flexible points currencies are slowly losing the fact that flexibility is indeed their USP. Here’s why I think so.
Loyalty Program Devaluations
Traditionally, miles and points aficionados would accumulate miles and points on their cards in order to eventually transfer them to an airline. Many would have the goal of redeeming 75k to 80k miles for a comfy flight in business or first class.
Due to multiple airline devaluations and the disappearance of award charts, the pricing is now ambiguous. A seat in Delta One can cost upwards of 100,000 miles whereas ‘premium’ rooms in the Hilton Honors program can cost an absurd 300,000 points or more per night! A flight from the US West Coast to India in SQ business now costs 98,000 Miles each way after Singapore Airlines devalued.
Award Seat Availability
Even when points and miles are not devalued, you can often get stuck when you don’t find availability. If you frequently book award seats, you can relate to how infuriating it can be to keep looking for award space and then wondering when to transfer points.
Hotel Room Availability
A few recent reports about hotels playing games with availability have also cast a shadow on the viability of flexible hotel points. I’ve had an instance in the past when standard room availability was not available. However, after calling up customer service, it suddenly reappeared again.
Flexibility isn’t worth much, but the points still may be
Instead of focusing on flexibility, focus on the base line value that you can redeem your points at. If you have the Chase Sapphire Reserve, you’ll get a 1.5 cents per point redemption value. Given the declining value of airline miles and hotel points, a fixed value of 1.5 cents per point is decent.
I still continue to bank my miles and points to programs like Membership Rewards and Ultimate Rewards. Given how frequently loyalty programs are making changes, getting a fixed base line value seems to be a pretty good bet for now. Also, airline fares are lower, with a lot of fare deals popping up every now and then. A $450 round trip ticket from LAX to Hong Kong would only cost 30,000 Ultimate Rewards points with the Chase Sapphire Reserve Card.
The Pundit’s Mantra
If you have six figure balances in flexible rewards points, by all means they’re of great value. However, you must keep in mind the base line value that you can redeem them at. This will protect you from any unfavorable changes that loyalty programs make to their own redemption values.
If your dream is to stay in a plush suite or fly business class, then flexible miles and points are your best bet. Again, that’s still subject to transfer times, award seat availability and loyalty program changes. If you’re fine flying in coach, then by all means use your flexible points at their baseline values.
They’re more predictable and easier to use. Chase Sapphire Reserve will always give you 1.5 cents per point, whereas the Chase Ink Preferred and Chase Sapphire Preferred will give you a consistent 1.25. Other programs like Capital One Venture and BarclayCard Arrival will give you a consistent 1 cent per point. So the next time when someone says that your Chase points are valued at 2 cents per point and Amex at 1.7, take it with a pinch of salt.
What’s your strategy going forward with your flexible points and miles? Do you think that the flexibility is still a great feature? Are you earning and burning them quickly or slowly building them up for a ‘dream’ trip? Let us know in the comments section.
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Those “credit card gurus” can never explain how those points are worth 2¢ each when you can only transfer those points to a program where points are worth 0.5¢ -1.6¢. They try to say you have “flexibility” but they still cannot actually show you how to get that much value. I guess they just want you to use their link to apply for those credit cards?
Thanks for reading. I can’t speak for other bloggers’ motivations, but multiple devaluations made me rethink the value of these points and write this post. If you have a stack of flexible points, but the partners are devaluing their currencies, isn’t the value of your points diminishing? In such a case, flexibility to transfer to partners stops being a unique selling proposition for these cards.
I think the title of your article should be “Flexible points currencies aren’t as valuable as those who sell credit cards want you to think.” Anyone with a real job and family who has ever tried to book an award ticket knows this. If you travel alone and can vacation anytime you want, and don’t care where you vacation, yes you can get 8 cents per point on a midweek flight from BFE to BFI in first class by yourself. For those of us in the rest of the world, a realistic value would be a travel portal redemption, or… Read more »
Thanks for reading. Well, I can’t speak for others but I agree with you about the fact that if traveling or travel blogging isn’t your full time job, it’s quite a task to find award availability. Given that I too work full time, I struggle finding award availability even while trying flexible dates, in spite of the different points currencies I have.