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Should I hoard my points or spend as soon as I can?

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When should I use my reward points?

One of the most common questions asked by people who have started collecting reward points is if they should hold their miles or spend as soon as they can. I have changed my strategy over the last several years as I used to be a hoarder. I always wanted to get the most out of my miles, but that can be a gamble. By holding on to them they are subject to the whim of the airline or hotel company.

The value per point will change each time the company makes an evaluation and decides they want to increase the cost of the room or flight. Example is when I would stay at the Palazzo in Las Vegas, two years ago would cost 50,000 points through IHG, now its 60,000 points. That is over a 15 percent increase for the exact same room.

Company risk if you hold reward points

Companies get bought and sold, one of the most popular programs is SPG Starwoods points.  Recently SPG was bought by Marriott and rumors point to the programs being merged into one program sometime in August. The travel partners you can transfer to with SPG Starwoods are huge and are worth about two cents per point. Marriott points are worth about 4/5th a penny. This is a significant difference and it leaves a lot of uncertainty about if/when they combine into one program. Everyone is waiting to hear what the final transfer rate will be or if they will even maintain the same transfer partners.

It is all up to the whim of the hotel and airline companies. It is their currency. They control the value and can change at no notice. If they want, they can suspend your account and remove the miles at their control.

Earn and Spend

I recommend a “Controlled Hold” or “Earn and Spend”. If you are saving up for a specific destination, such as Hawaii, go ahead and hold them but be fully aware that they can change in value overnight. Don’t plan on them being worth the same amount that they are now, two years from now. Right now, I book out as far as I can locking in before any type of increase occurs. Try to be savvy about how you book. For example, Southwest flights I can rebook if they drop in price. Within the last month though, they have decreased the value of their points meaning you have to use more points to book a specific flight.

Chase Ultimate Rewards

This is the other reason I like to hold points in programs with banks such as Chase’s Ultimate Rewards program. Chase Ultimate Rewards on my previous blog article. At worst, there is a cash value that you can redeem for statement credits or an increase level through their travel site. You still have the flexibility to transfer to other programs when you need it. This way you are not locked into United or Southwest if they decide to devalue their points.

Flexibility is the key in managing your reward points. Allowing for flexibility gives you the best option. This allows you can customize your travel and put things more under your control.

Want to know more or have ideas for future articles? Contact me or check out these other articles you may be interested in.

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Do You Amazon? Two Options to Free Points

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Everyone knows Amazon.com and most people do some or like in our case, a lot of their shopping there.  We have had the Amazon Prime membership for several years for the free shipping and music streaming benefits.  Our purchases have been everything from clothing, electronics, groceries and luggage from Amazon.  Actually we get so many packages with the free shipping that our recycling bin overflows every two weeks with the empty cardboard boxes.  So that begs the question… How can I get Free Points from shopping on Amazon? There are three great options to Amazon Free Points and these are in addition to the points you can get from your travel credit card.

Amazon Free Points – Option #1 – Shopping Portals

There are many different shopping portals that offer miles or cash back.  Unfortunately most of the cash back divide it up by department with lots of exclusions.  This is why I usually look at Jet Blue Airlines shopping portal.  Jet Blue offers 3 miles per dollar on all purchases.
Jet Blue has a large presence on the West and East Coast and not as much in the Midwest.  Right now, I would fly out of Minneapolis or Chicago and be routed most likely through Boston for any flights.  But keep in mind, these are free miles just by going through one link before doing your purchases.  Just by doing a quick search, I found I could fly from Chicago to Boston (One Way) to see a Boston Red Sox game for as low as 4600 miles.  So just by using the link and spending over $1500 over a year on normal purchases could easily get me a ticket out to Boston.  The points usually post within a month.
Jet Blue has recently had rumors of being purchased, or purchasing other airlines over the last one to two years.  If this happens, the points usually transfer to that carrier also.  Additional flight options may be opening up in the future.

Amazon Free Points – Option #2 – Gift Cards and MileaguePlusX App

Some credit cards allow for bonuses on gift card purchases at supply stores.  Our older Chase Ink Business Plus (no longer available) and the Chase Ink Cash offer 5 points per dollar.  We pick up gift cards for Amazon all the time at Staples or Office Max.  This will give me 6.25 to 10% back in free travel on that purchase depending on how I want to do the redemption.

If I forget to stop at Staples, I always hit up my trusty MileagePlusX app on my phone.  United Airlines offers an app for your phone where you can purchase gift cards for many businesses and get United Miles for the purchase called MileaguePlusX.  One of the best things about this app is you can create your “gift card” for the specific amount you are spending at some vendors.  Amazon unfortunately is done in flat amounts.  The rates for the gift cards is smaller at 1/2 miles per dollar, but its better than doing nothing.
Some of the better point options with this app that we use quite often are 5 miles per dollar for Bath & Body Works, Panera Bread and Applebees, 4 miles per dollar for IHOP, Buffalo Wild Wings, and Chilis.   Joni often reloads her Starbucks account from this app getting 2 miles per dollar.  Keep in mind this is above the miles or cash back you would get from your credit card.

Amazon Free Points – Combo Option

When you stack rewards you can get even more points for your purchase. For example, I need to buy something for $100 from Amazon.  I pick up the gift card from Staples when I am in town.  At 5 miles per dollar this nets me 500 Chase Ultimate Rewards points which I would value at $10.00.  I then go home, sign into my Jet Blue Account and use the link to go through their shopping portal for 3 miles per dollar.  This is 300 Jet Blue miles which is $5.02.  I got this amount by looking at the flight for 4600 miles that costs $77.  On this purchase when combining these steps I got $15.02 back towards travel on the $100 purchase.  This is just over 15 percent back on something that I would be purchasing anyways, by just adding two simple steps.
Travel hacking doesn’t have to be hard. By doing just a few simple steps before making your normal purchases and you will be surprised how quickly you can use those benefits to travel.
Contact me if you have questions or have suggestions for future posts.
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