In general my strategy with points is to “earn and burn.” My goal is always to earn miles as quickly as possible and to redeem them as quickly as possible. However, this doesn’t mean that I take the approach that they’re “free,” and that I should redeem them sub-optimally. Quite to the contrary, I give a value to each mileage currency, and then with each trip decide whether I’m better off redeeming points or paying cash (see here for my thought process when it comes to this).
So I like to earn and burn within reason. That’s to say that ideally I’ll never have so many points in an account that I couldn’t reasonably redeem them within a few months, in the event that a program were to devalue significantly. After all, having points in an account is no different than having cash in an account not earning interest. With the rate at which many programs devalue, you’re losing value with every year you hold onto those points.
While I use this strategy within reason, there are three points currencies that I don’t mind hoarding at all. That’s to say that these are the last points currencies I’ll redeem if given the option, since I view them as being lowest risk to devalue. Here’s what they are and why, in no particular order:
Starwood Preferred Guest points
Credit cards that earn this points currency: Starwood Preferred Guest® Business Credit Card from American Express, Starwood Preferred Guest® Credit Card from American Express
Value per point: 2.2 cents
Starpoints can efficiently be redeemed directly for hotel stays, can be converted into Marriott Rewards points at a 1:3 ratio, or can be converted into airline miles. The reason I’m not concerned about Starpoints being devalued is because of the ability to transfer the points to roughly 35 airline programs, mostly at a 1:1 ratio:
|Aegean Airlines Miles+Bonus||American Airlines AAdvantage||Hainan Airlines Fortune Wings Club||Qatar Airways Privileges Club|
|AeroMexico Club Premier||Asiana Airlines Asiana Club||Hawaiian Airlines HawaiianMiles||Saudi Arabian Airlines Alfursan|
|Air Canada Aeroplan||British Airways Executive Club||Iberia Plus||Singapore Airlines KrisFlyer|
|Air China Companion||Cathay Pacific Asia Miles||Japan Airlines (JAL) Mileage Bank||Thai Airways Royal Orchid Plus|
|Air France/KLM FlyingBlue||China Eastern Airlines Eastern Club||Jet Airways||topbonus loyalty|
|Air New Zealand Air Points||Delta Air Lines SkyMiles||Korean Air Skypass||United Mileage Plus|
|Alaska Airlines Mileage Plan||Emirates Skywards||LATAM Airlines LATAMPASS Kms||Virgin Atlantic Flying Club|
|Alitalia MilleMiglia||Etihad Airways Guest||LifeMiles of Avianca||Virgin Australia Velocity|
|ANA Mileage Club||Gol Smiles||Lufthansa Miles & More|
Best of all, you get a 5,000 point bonus for every 20,000 points transferred, meaning that you’re really earning 1.25 miles per dollar spent.
In the event that this ratio was ever devalued, I would hope that they’d provide some advance notice of this, in which case I’d transfer out a large percentage of my points to a few airline programs, so I could redeem those points within a reasonable timeframe and minimize the downside.
Transfer Starpoints to Alaska Mileage Plan for redemptions in Japan Airlines first class
The reason I feel pretty good about Starpoints not being devalued in the short term is because Marriott Rewards has a mechanism by which you can convert points into airline miles at roughly the same rate through their travel packages.
Chase Ultimate Rewards points
Chase Ultimate Rewards has over a dozen partners that allow 1:1 transfers:
|Aer Lingus Aer Club||IHG Rewards Club||Singapore KrisFlyer||World Of Hyatt|
|Air France KLM Flying Blue||Korean Air SkyPass||Southwest Airlines Rapid Rewards|
|British Airways Executive Club||Marriott Rewards||United MileagePlus|
|Iberia Plus||Ritz-Carlton Rewards||Virgin Atlantic Flying Club|
My favorite partners include Air France/KLM FlyingBlue, Korean Air SkyPass, Singapore KrisFlyer, United MileagePlus, and World of Hyatt. Still, there’s some risk of those individual points currencies devaluing (as we’ve seen in the past), and significantly lowering the value of those points.
Why do I still hoard these points? Because worst case scenario I can redeem Ultimate Rewards points for 1.5 cents each towards the cost of a travel purchase, since I have the Chase Sapphire Reserve℠ Card. That’s pretty close to my valuation of the points, so I could do that without losing too much value. However, if you just have the Chase Sapphire Preferred® Card or Ink Business Preferred℠ Credit Card you’d get at most 1.25 cents per point if redeeming as cash towards the cost of a travel purchase, which isn’t quite as lucrative.
Redeem Ultimate Rewards points for 1.5 cents each towards the cost of an airline ticket
Amex Membership Rewards points
Credit cards that earn this points currency: The Platinum Card® from American Express, The Business Platinum® Card from American Express OPEN, Premier Rewards Gold Card from American Express, The Business Gold Rewards Card from American Express OPEN, The Amex EveryDay® Credit Card from American Express, The Blue Business℠ Plus Credit Card from American Express
Value per point: 1.7 cents
Amex Membership Rewards has more transfer partners than Chase Ultimate Rewards, as follows:
|AeroMexico Club Premier||British Airways Executive Club||Etihad Guest||Virgin Atlantic Flying Club|
|Air Canada Aeroplan||Cathay Pacific Asia Miles||Hawaiian Airlines HawaiianMiles|
|AirFrance/KLM Flying Blue||Delta SkyMiles||Iberia Plus|
|Alitalia MilleMiglia||El Al Matmid||JetBlue TrueBlue|
|ANA Mileage Club||Emirates Skywards||Singapore Airlines KrisFlyer|
There are a couple of reasons I hoard Membership Rewards points.
First of all, for most Amex cards, you can get at most one cent per point if redeeming as cash towards the cost of a ticket. However, if you have The Business Platinum® Card from American Express OPEN you can receive up to a 35% refund on redemptions, meaning you’re getting about 1.54 cents per point. That’s an excellent “cash out” value, though there are some limits associated with this, including how many points you can redeem this way, what airlines you can redeem on, etc.
But there’s another thing that makes Membership Rewards points special. Even if a points currency devalues, Membership Rewards fairly consistently has transfer bonuses, which is a way to increase the value of your Membership Rewards points even more. For example, last summer we saw a 40% bonus on transfers from Membership Rewards to British Airways Executive Club, and late last year we saw a 20% bonus on transfers from Membership Rewards to Air Canada Aeroplan. I took advantage of both of those bonuses, and they got me disproportionate value.
I took advantage of the Aeroplan transfer bonus to redeem for Lufthansa first class
There’s no guarantee that those bonuses will continue, though I generally think history is a pretty good indicator when it comes to this stuff.
Personally those are the three points currencies that I have no problem hoarding. With the risk of many points currencies being devalued, I think those programs have the most ways you can liquidate your points quickly without losing much value, since you’re not tied into one specific currency.
Some might wonder why I don’t have Citi ThankYou on the list (the points currency earned on cards like the Citi ThankYou® Premier Card and Citi Prestige® Card). While I value Citi ThankYou points significantly and collect them, the reason I don’t think they’re in the same league is because the maximum value you can get redeeming them as cash towards a ticket is 1.25 cents each, which isn’t as good as the 1.5+ cents per point you can potentially get with Amex and Chase. Personally they also don’t have quite as many transfer partners that interest me.
Are there any points currencies you hoard? Which ones?
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