Tuesday, May 30, 2023

Here’s how to get the most out of them


Airlines have been degrading the value of points for years

There have already been some post-pandemic shakeups to rewards point systems. Southwest, for example, changed the number of points it takes to earn a free ticket in April. And as more and more people take to the friendly skies, analysts like Rossman say additional changes are on the way.

For the last few years, airlines have been moving the goal posts of how many points it takes for travelers to redeem their rewards, Rossman says. First, they stopped tying points to the number of miles passengers traveled, instead basing them on the amount passengers paid for airfare. Then they started requiring more points to take a free flight.

Now, as airlines prepare to bounce back from the record-low year they had during the pandemic, they want to have customers who pay with cash, not points. The slow recovery of business travel — on which airlines make the bulk of their money — will only add fuel to the fire.

“They really want paying customers,” Rossman says. “So I do think there’s going to be a temptation among these programs to make the miles and points worth less. In other words, requiring more points or miles for that same free plane or that same hotel stay.”

Unused rewards points circulating in the system also weigh on airlines’ fiscal planning in years to come, since they represent future seats that they won’t get to sell for cash.

“A lot of these airlines and hotels may be looking to devalue their programs just to liquidate these points,” Rossman says. “These are liabilities for them.”

Use your points sooner rather than later

When it comes to deciding how best to use your points, the paramount piece of advice you should follow is to do so as soon as possible, Rossman says. While it can be fun to let them build up, unused points don’t get you anything or anywhere.

“You want to accumulate them to a point,” Rossman says, but “don’t just hoard them for hoarding’s sake.”

On the other hand, using your points may be a taller order this summer than others, simply because demand for flights is so high. On July 1, airport screenings at security checkpoints surpassed their 2019 levels for the first time since the pandemic began, according to the Transportation Security Administration.

Travel volume is likely to remain high through the remainder of the summer, and prices for everything from hotels to rental cars to flights are likely to stay elevated as well.

Consider these tips to get the most out of your points:

  • Book flights as soon as you can. In order to avoid price bumps and fee hikes from increased demand, try and book your travel as early as possible.
  • Compare the total cost of air travel. Compare your total cost before booking airfare. Basic economy is usually the cheapest fare class, but an inexpensive award fare might end up costing more in the end, because of all the restrictions and add-on fees.
  • Fly routes that are feeling the loss of business travel. Because business travel will most likely not be returning this summer, routes that depend on corporate travelers will have some of the lowest fares. Consider traveling to big cities that would traditionally be business hot spots, especially international destinations.

The article “‘Use Your Points and Miles’ ASAP, Says Credit Analyst: Here’s How to Get the Most Out of Them” originally published on Grow+Acorns.

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