Washtubs, not teaspoons

A few years back, reclusive travel hacking personality Mr. Pickles started tweeting pictures of a gas pump dispensing hundreds of gallons of gas for free and asking "what am I filling up?" Twitter's an elusive medium and I can't dredge up the actual thread (send me a link and I'll update this post!), but as I recall it ended up being a large wheeled diesel generator of some kind. There's nothing special about a travel hacker being able to buy gas for next to nothing, if they have access to the right stores during the right promotions, but Mr. Pickles didn't just have free gas: he had a plan.

In Warren Buffett's latest shareholder letter he wrote:

"Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do."

Many people in the country today are in the midst of such a downpour, which has got me thinking about the ways a travel hacker can equip herself with washtubs, not teaspoons.

Maintain a diverse collection of credit cards

I've been taking advantage of the current promotion with my Hilton Surpass American Express and US Bank Flexperks Travel Rewards cards, which I consider worth manufacturing spend on even in the absence of a promotion. But reasonable people disagree, and might instead manufacture spend primarily at unbonused merchants using cards like the Starwood Preferred Guest American Express or Chase Freedom Unlimited. Most of the time, that's a perfectly defensible decision. But when an opportunity like the current one comes along, it leaves those people at a disadvantage compared to people who keep one or more credit cards bonusing grocery store spend.

Manage credit lines

Like most travel hackers I have a general awareness of my reported credit card utilization rate, but unlike many travel hackers I don't really care about that rate, since my practice focuses mainly on manufacturing spend, not accumulating signup bonuses. However, being sure that you have the credit lines available to maximize an opportunity while it exists is a totally separate question. It's absolutely worth thinking in advance about how you'll open up credit limits suddenly when a unique opportunity emerges. How fast can you liquidate your spend in order to create additional headroom? Even if you manufacture relatively little spend, you might consider having a plan in place when a particularly lucrative opportunity comes along.

Come up with a plan

The benefits of the current promotion expire on April 6, which means there are two different timelines: the deadline to earn additional benefits and the deadline to redeem them. There's no point earning benefits that won't be used, or using benefits for things you don't want. That means I've been spending a lot of time looking around my apartment thinking, "what can I buy today that I'm certain to use eventually?" If you're hitting this opportunity hard, you may need to think further outside the box than usual. A few suggestions:

  • Paper goods: Paper towels, toilet paper, facial tissue, coffee filters.
  • Occasionally used products: batteries, lightbulbs.
  • Toiletries: toothbrushes, toothpaste, soap, feminine hygiene products, razors, deodorant, shampoo.
  • Canned goods.

Of course, the best time to come up with a plan is in advance, which is what Mr. Pickles did. I'm not saying you should buy a diesel generator just in case an unlimited free gas opportunity arises. But I am saying Mr. Pickles did and was able to hit that opportunity as hard as humanly possible.

Give stuff away

Once you've stocked up on everything you can possibly imagine needing, it's as good a time as any to think about folks who have unmet needs. I don't particularly care if you think of this as "charity" or as "paying it forward" or as "sticking it to the man," but if you have the ability to make somebody's day by giving them free gas, free groceries, or whatever else your travel hacking practice gives you free or cheap access to, then I think it's worth considering.


I happen to be in a position to take advantage of the current promotion fairly aggressively, but it should be obvious that I'm trying to frame this discussion in more general terms. If you don't have a plan in place in advance of a promotion, you're more likely to waste valuable time coming up with one while the promotion is ongoing.

Rewards programs, ranked by reliability

One fun thing about writing a blog is that reader feedback gives you a chance to see how different ideas interact and collide. Last Friday when I wrote "While I'm willing to take unlimited risk in my investment portfolio, I'm willing to take virtually no risk in my travel hacking portfolio," reader Danny commented:

"This seems like an interesting sentiment. I'd be far more concerned with keeping my investments sound than my points balance."

Then on Monday I wrote with respect to my findings on Hilton all-inclusive award pricing that:

"If points costs will fall to match low revenue rates, it is easier to justify earning large quantities of Hilton points knowing that you'll almost always get close to, or above, their imputed redemption value."

I've been thinking about these two ideas, risk and reliability, and how they interact in my travel hacking practice.

Devaluations are the big, unknown risk

For several years, the US Bank Club Carlson credit card offered the last night free on all award stays. Now, this benefit was never quite as good as it was cracked up to be since Club Carlson properties, even or perhaps especially high-end Club Carlson properties, are dumps (true story: months after the Radisson Blu Warwick Hotel Philadelphia finished their renovations to not be a dump any longer they left the program).

Many people, expecting that benefit to continue indefinitely, earned hundreds of thousands, or millions, of Club Carlson Gold Points (trust me — many of them are readers of this blog).

Then the last-night-free benefit ended, and those points could only be redeemed at still-crappy Club Carlson properties. The same spend that earned those millions of points could have been used to earn 2% cash back, unbonused Ultimate Rewards or Membership Rewards points, or another rewards currency.

That's the kind of risk that I do my best to avoid in my travel hacking practice, by earning the rewards I redeem and redeeming the rewards I earn.

Reliability is the certainty of being able to redeem rewards for the trips you want to take

Reliability is something slightly different than risk. A reliable program offers consistent redemption values, whether or not that value is high or low, attractive or repulsive.

For example, according to Hotel Hustle, the IHG Rewards Club offers quite remarkable consistency, with a median value of 0.58 cents per point, with 75% of award searches above 0.44 cents per point and 75% of awards below 0.68 cents per point. That doesn't make it attractive to manufacture IHG Rewards points, but it gives you a clear view of the value of any points you might earn in one of their periodic sweepstakes or promotions.

My top ten loyalty programs, by reliability

Whether a particular rewards currency is "worth earning" depends on both your cost of acquisition and your particular travel plans, so this is not a list of the top ten most valuable loyalty programs. It's only a list of the top ten rewards programs sorted by my view of their reliability.

  1. Cash. Cash has the great benefit of maintaining its dollar redemption value no matter what happens. It is, in that way, the most reliable rewards currency. Into this category also falls the fixed-value redemption of currencies like Ultimate Rewards, Membership Rewards, BankAmericard Travel Rewards, and other rewards programs with fixed values, like Delta SkyMiles Pay with Points redemptions. Their reliability is unimpeachable.
  2. IHG Rewards anniversary free night certificates. In the several years I've been travel hacking, I've never seen an IHG property that I would be willing to transfer points, buy points, or manufacture points in order to book. But they really do have a Chase IHG Rewards credit card that gives you an annual award night at any IHG Rewards property in the world! I've never seen a report of the certificate not being honored for any reason, except the chain's preposterously loose rules on award availability. As far as I can tell the thing is completely reliable. Compare that to Marriott's anniversary night certificates, which have become almost unredeemable as properties continually migrate up out of Category 4.
  3. Flexible Ultimate Rewards. Chase Ultimate Rewards points held in a Sapphire Preferred, Sapphire Reserve, Ink Bold, or Ink Plus account are more valuable than cash but slightly less reliable, since their value depends in part on the value of transferred points. One component of the value of a flexible Ultimate Rewards point is the value of one United Mileage Plus mile, but the value of a United Mileage Plus mile is highly volatile, so that portion of the value of an Ultimate Rewards point is also volatile. Nonetheless, Chase strongly supports the 1:1 transfer ratio of Ultimate Rewards points to their partners, so the reliability of the program overall is raised by the relative constancy of programs like World of Hyatt and Southwest Rapid Rewards.
  4. US Bank Flexpoints. Long-time readers know I love the US Bank Flexperks Travel Rewards Visa because of its generous bonused earning categories, but the process of redeeming Flexpoints introduces some unreliability into the system. Flights will sometimes be shown with odd fare differences which push them into a higher redemption band, for example. Nonetheless, the ability to redeem Flexpoints for between 1.33 and 2 cents per Flexpoint makes them one of the most reliable currencies around.
  5. Flexible Membership Rewards. Here the problem of transfer partner volatility is magnified by the eclectic range of partners Membership Rewards has. For example, in 2015 the transfer ratio to British Airways Avios dropped 20%, from 1000:1000 to 1000:800. Then in 2016 British Airways created a special exception to their distance-based award chart in order to charge between 33% (off-peak) and 60% (peak) more for business class flights between Boston and Dublin on Aer Lingus. Today, you may need to transfer 75,000 Membership Rewards points to Avios to pay for a flight that would have cost 37,500 Membership Rewards points before the two devaluations. This doesn't mean that Membership Rewards points themselves have radically decreased in value (how often do you fly between Boston and Dublin?), but the example illustrates the way in which their reliance on transfer partners for value introduces a lot of volatility into the value of their rewards currency, since they don't control their partners' award redemption rates.
  6. Southwest Rapid Rewards. Unlike a true fixed-value currency, Southwest Rapid Rewards points have fixed values only within each fare bucket: Wanna Get Away (between 1.4 and 1.6 cents), Anytime (about 1.1 cents), and Business Select (about 0.9 cents). That means that while you know you'll get one of those three values, which one you get depends on availability, reducing in my view the overall reliability of the program. Southwest enthusiasts avoid this problem by carefully watching the schedule and snapping up Wanna Get Away fares as soon as they become available, increasing the overall reliability of the program for them, at least for flights booked far enough in advance.
  7. World of Hyatt. According to the Hotel Hustle database of search results, the lowest value redemption at Hyatt properties is 0.91 cents per point (the median is 1.78 cents). If my Chase accounts were abruptly closed and I had to speculative transfer my entire Ultimate Rewards balance, I would choose World of Hyatt in a heartbeat. Hyatt doesn't have properties everywhere in the world, which makes it hard to rely on as a first-string hotel rewards program, but if there's a Hyatt in your destination you're exceedingly likely to get a good redemption value.
  8. Starwood Preferred Guest. Starwood has three different sources of value: their points can be redeemed for hotel stays at Starwood and Marriott, they can be transferred to airlines partners (either directly or through a Marriott Hotel + Air package), or they can be redeemed for revenue flights. That makes it almost impossible to get a bad value for your Starpoints, although it also causes the much more serious and common problem of hoarding Starpoints and being unwilling to redeem them for anything but the perfect redemption!
  9. Hilton Honors. As I've been discussing lately, the biggest effect of the recent changes to Hilton Honors is that they've apparently deliberately increased the reliability of the program. While there will always be sub-par redemptions in any non-fixed-value loyalty program, Hilton appears to have increased the number of properties where points redemptions make sense compared to paying cash rates.
  10. Legacy airline programs. I got into travel hacking at the very tail end of the period when, with flexibility and planning, it was still possible to fairly reliably book low-level domestic award tickets. Those days are over. Virtually all of my domestic travel today, in both economy and first class, are revenue tickets, not because revenue tickets have become cheaper but because award tickets have become completely unreliable as a means of booking domestic travel. International travel, especially on partners, hasn't seen quite as bad a gutting, and flexibility and planning still go a long way to booking flights overseas. Having access to legacy airline currencies through Ultimate Rewards, Membership Rewards, and Starpoints is still a reasonable tactic in case you happen to find award availability, but I don't think it can be the cornerstone of a strategy any longer.


There you have it, my completely subjective top ten ranking of rewards programs by reliability. This is certainly not the only ranking possible: those whose travel regularly brings them to expensive cities with Starwood properties will find they're able to get consistent value from Starwood Preferred Guest, and those who live in cities with many international partner airlines will likely get more consistent value from legacy airline programs than I do. But today, a combination of cash back, Ultimate Rewards or Membership Rewards, and one or two strong hotel programs seems most likely to help you pay as little as possible for the trips you want to take.

Quick hit: new Hilton all-inclusive award pricing is great

I earn a lot of Hilton HHonors points, and I'm going to be earning even more than usual this week, so I decided to take a look at some of Hilton's all-inclusive resorts to see if I could lock in some award space for next Presidents Day, since I had such a good time in Jamaica this year, and I remembered having a terrible time finding award space at Hilton's Rose Hall all-inclusive resort. While checking out the current award space availability, I discovered some pretty odd pricing anomalies — or features, if you prefer.

Searching for flexible dates doesn't work great (and never has)

When you search for flexible dates on the Hilton website, you'll be given something that looks vaguely like a flexible date search. For example, here's a search for flexible dates in July of this year:

This looks like you've got some expensive premium availability at the beginning of the search period, some not-unreasonable premium availability for a few days, some less-expensive award space for a couple days, one date of low-level availability, 3 sold-out dates, and then some more premium availability. That's not what's happening.

Here are the actual lowest-priced rooms I could find on the dates during this search period:

  • June 24: 70,000
  • June 25: 70,000
  • June 26: 65,000
  • June 27: 65,000
  • June 28: 65,000
  • June 29: 65,000
  • June 30: 70,000
  • July 1: No availability
  • July 2: No availability
  • July 3: No availability
  • July 4: 115,000
  • July 5: 65,000
  • July 6: 65,000
  • July 7: 70,000
  • July 8: 70,000

The award space on June 30 seems to flicker in and out of existence depending on whether I'm logged in, whether I'm doing a flexible search or a date specific search, etc. The search results shown on the website seem to be very path-dependent.

If this continues, it's a huge improvement over the old Hilton HHonors

Once I noticed these pricing anomalies, I decided to see whether I could find any more extreme prices. Here are a few weird prices I found checking the next few months

  • April 9: 70,000 (0.76 cents/point)
  • May 31: 45,000 (0.58 cents/point)
  • June 1: 50,000 (0.58 cents/point)
  • July 23: 41,000 (0.49 cents/point)

My original plan was to check each of the next 12 months and find the cheapest date with points. That ended up not being feasible because the Hilton website is terrible. It errors out after every 2-4 searches, periodically signs you out, and inflicts all sorts of other madness on you.

The key takeaway here isn't that there are atmospheric points redemptions (although they're squarely above Hilton imputed redemption values): the value you get from points depends on both the number of points charged and the comparable revenue rate, and the lowest points costs are on nights when revenue rates are in $200-400 range. Really brag-worthy redemptions are on nights when revenue rates are in the thousands or tens of thousands of dollars, and you're able to redeem a "mere" 95,000 points.

The real takeaway here is that by being willing to reduce point costs so dramatically on nights with low revenue rates, Hilton has increased the reliability of their points' value. Prior to the revaluation, the Hilton Rose Hall was 95,000 points per night regardless of the revenue rates available. In fact Hilton had a wide range of nice properties where on cheap nights it was difficult to justify redeeming points. If points costs will fall to match low revenue rates, it is easier to justify earning large quantities of Hilton points knowing that you'll almost always get close to, or above, their imputed redemption value.

The app works great

Last night after I scheduled this post I suddenly wanted to check over a few more things and opened up the Hilton app on my phone. After a few moments, I realized, "this isn't generating any of the errors the website was giving me."

If you think about there being a fixed "real world" of Hilton award space out there in the universe, it appears to me that the app is designed to tap into that world directly, while the website presents only a distorted image of it and requires you to rotate and adjust the lens in order to see different bits and pieces of the real world of award space.

Unfortunately the app doesn't have a flexible date search function, but since the one on the website is so terrible I hesitate to even say this is a disadvantage of the app over the website. In any event, if you know the dates you're interested in I highly recommend going straight to the app and skipping the website completely.

The advantages of prepaying for travel at a discount

I have never belonged to the "travel is free" school of travel hackers, not because I don't think there are free or negative-cost methods of manufacturing spend (there are) or because I think my time has intrinsic value (it doesn't), but for the much simpler reason that most techniques that can be used to generate travel rewards can also be used to generate cash back. No matter how cheap or profitable your travel hacking is, the same techniques can often be used to generate some amount of cash back; that cash is the price of your "free" trips.

Now, there are a few exceptions. The IHG Priceless Surprises promotion didn't have a "cash back" option (although I did make some money when I sold the Bose speaker system I won). Likewise if you had 24 paid stays or 49 paid nights at Hyatt in 2016, you could pay for one additional stay and get a free night at any Hyatt in the world when Hyatt Gold Passport switched over to World of Hyatt. That's good old-fashioned travel hacking, with no obvious cash back equivalent.

But if you earn most of your loyalty rewards from manufactured spend, fulfillment by Amazon, or reselling private label products, you can almost always choose to earn cash instead of travel rewards. That's the simple reason I think travel is almost never free.

Instead, I prefer to think of my travel hacking practice as prepaying for travel at a — sometimes very steep — discount.

Prepaying for travel can save you money

This is obviously the most attractive reason you might choose to earn rewards currencies instead of cash back. If you need to choose between earning 1.5 Ultimate Rewards points with a Chase Freedom Unlimited card or 2.625% cash back on a BankAmericard Travel Rewards card, the obvious reason to do so is if you expect to get more than 1.75 cents per Ultimate Rewards point, for example on a premium cabin United redemption, expensive Hyatt stay, or Wanna Get Away fare on Southwest.

While I mentioned manufacturing cash versus rewards currencies, there are other ways to prepay for travel at a discount: Hyatt gift cards, for instance, are often on sale for 10% or more off face value, allowing you to "lock in" savings by purchasing gift cards on sale and redeeming them over time as needed.

It's more convenient to spread travel spending throughout the year

The other day I was chatting with a travel hacker who consults with businesses to use rewards to lower their travel costs and started thinking about the way a firm could use rewards earned throughout the year on business expenses to avoid month-to-month fluctuations in travel costs. After all, if you absolutely have to go to Louisville for business in May during the Kentucky Derby, you don't have the choice of paying the October cash rate — but you do have the option of paying the year-round points rate if, of course, you can find a standard room available.

This is more or less how I think about my Delta SkyMiles. I earn a block of SkyMiles each year with my Platinum Delta SkyMiles American Express card at a fixed cost, and then redeem them for my Delta flights whenever appropriate. Sometimes (hopefully more often than not) I save money compared to a cash back or fixed-value points card and sometimes I don't, but I don't have sudden Delta flight expenses as long as I have enough points to cover my flights.

This is partly what Frequent Miler calls "the joy of free:"

"When you book travel using miles & points, it may feel like your trip is free (or nearly free), regardless of how many miles and points you spend. If so, the pleasure you get from spending points and miles may greatly outweigh the pleasure you’d get from paying for the same trip with cash. In this case, miles & points are arguably (and ironically) worth more to you because you do not value them like cash."

But there's a more serious side to it as well. Travel expenses that can't be covered by existing points balances and have to be charged to a credit card require you to have cash available to pay off those new charges, lest you be stuck paying interest charges that quickly devour any profit or savings from your travel hacking practice. If you aggressively invest as much of your monthly cash flow as possible (have I mentioned my new blog, Independently Financed?), then having additional cash on hand to cover credit card payments necessarily disrupts the pace of your investments.

In other words, there are potential advantages to steadily building up and redeeming an inventory of travel rewards currencies even if you save relatively little in out-of-pocket expenses.

Some people need a permission structure to travel as much or as well as they'd like

Reader ed commented the other day:

"once a certain cache of points is retained, a freedom opens up to divert efforts toward cash back while still retaining flexibility for award-based travel. It would seem perfectly OK to me to pay for that increased flexibility even if I didn't use it. Therefore, I'm not sure that points that go unredeemed are without value. The value may simply be to clarify what my priorities are in the present moment, while retaining the means to travel on very short notice."

I think this is an interesting point that I don't always fully take into account. It's not just that traveling for "free" is more joyful, as I quoted Frequent Miler writing above, but that some people need the permission that paying little or nothing out of pocket provides in order to travel at all. A person who's both frugal and wants to see the world may need the impetus of high or even excessive points balances, hopefully cheaply acquired, in order to give herself permission to take the trips she's always dreamed of.

In this spirit, the constant drumbeat of devaluations may actually be a positive for the reluctant traveler! A trip that's affordable today might not be tomorrow, which may be enough to get someone out the door.


I love earning cash back, and try to earn as much of it as possible each month. But I admit that each of these different motivations drives me in part to earn rewards currencies in lieu of cash back: there are rewards currencies that I know will invariably save me money compared to cash back, there are rewards currencies like Hilton HHonors points that are so easy to earn and redeem that I'm able to spread my hotel spending evenly throughout the year, and there are currencies I accumulate just to give myself permission to book trips I might otherwise consider too expensive.

While the three rationales may differ in the degree of their economic "rationality," hopefully there's more to life than maximizing a utility function.

How do you want to think about budgeting for your hotel stays?

I've written a series of posts about my preferred metric for evaluating hotel loyalty programs, which I call imputed redemption values. This is a straightforward metric that tells you if redeeming hotel rewards points gives you a better or worse deal than paying cash that you've manufactured on your most lucrative cashback-earning credit card.

For example, a 95,000-point Hilton Honors redemption would require $15,833 in bonused spend on a Surpass American Express card. If your most lucrative cashback card earns 2%, that gives you a breakeven point of $316 (since for prices above that, a points redemption will require less manufactured spend), if it's 2.105% cashback you have an imputed redemption value of $333, and if it's 2.625% your IRV is $415. 

This metric doesn't tell you what you should do with points you've already earned — I always prefer to redeem points before spending cash. But if your points redemptions come in consistently above your imputed redemption values (95,000 points for a $2,000 night), then you are well-advised to continue earning those points, while if you fall consistently short (95,000 points for a $95 night), you might consider moving away from those loyalty currencies and towards additional cashback, instead.

Yesterday Frequent Miler posted an interesting analysis of some data (with a followup here) from the Hilton Honors program showing, as I'd hypothesized last month, that the new program would see redemptions bunched more tightly around the 0.4 cent per point redemption level. He provides some important insight on different factors that might affect the ultimate value you receive; read the whole thing.

Such analyses are very useful, but it's also helpful to pull back occasionally and give some thought to more basic questions: what's the best way to save money on your hotel stays?

What programs allow you to earn the stays you want as cheaply as possible?

Bottom-tier stays

There are phenomenal values at the very bottom of several hotel loyalty charts:

  • If you have a US Bank Club Carlson credit card earning 5 points per dollar on all spend, you can earn a free night at any Category 1 property every time you spend $1,800. Even if your backup card earns 2.625% on unbonused spend, you're exceedingly unlikely to find a room for less than $47.25 per night — taxes alone are likely to be that much!
  • With an American Express Hilton Honors Surpass card you can earn 5,000 Honors points, which is, I believe, still technically the fewest points required for a Hilton award stay, after spending $833 at a bonused merchant. That's not a value that any other hotel loyalty program currently offers.

Mid-tier stays

If you're staying in a more expensive market, for example mid-sized or larger cities, there are a few options for getting reliably outsized value:

  • If you signed up for a Barclaycard Wyndham Rewards credit card back when the card still earned 2 Wyndham Rewards points for each dollar you spend, you can earn a free night at any of Wyndham's properties for every $7,500 you spend on the card — and Wyndham has a LOT of properties!
  • In my experience Hyatt offers consistently reasonable pricing for mid-tier stays. For example, while the Chase Marriott credit card's Category 1-5 annual award certificate has become worthless as desirable properties migrate up and out of Category 5, most of Hyatt's centrally located city properties still top out at Category 3 or 4, costing 12,000 to 15,000 points per night, and are eligible for the Chase Hyatt credit card's annual free night certificate. If you have a Chase Freedom Unlimited credit card earning 1.5 Ultimate Rewards point per dollar, and a premium Ultimate Rewards card that lets you transfer those points to World of Hyatt, these mid-tier properties have an imputed redemption value between $160 and $200, while nightly rates can be substantially higher.

Top-tier stays

At the most expensive properties, a travel hacker has a few options:

  • Hilton Honors currently tops out at 95,000 points per night (when standard room awards are available), allowing you to earn a free standard room award night for $15,833 in spend, or $12,667 on stays of exactly 5 nights, since the fifth night is still free on award stays;
  • World of Hyatt standard room redemptions top out at 30,000 points per night. If you choose to manufacture unbonused spend on a Chase Freedom Unlimited in order to transfer Ultimate Rewards points to World of Hyatt, such a top-tier redemption would require $20,000 in spend, with an imputed redemption value of between $400 and $525 per night, depending on your best cash back alternative.
  • Starwood Preferred Guest, and their new owner Marriott Rewards, seem like they should potentially offer some value, and indeed if you're committed to visiting one of their top-tier properties you should certainly redeem points instead of paying cash. If you're committed to visiting a top-tier, 45,000-point Marriott Rewards property, then manufacturing $15,000 in spend on a Starwood Preferred Guest American Express card and transferring the points to Marriott Rewards at a 1-to-3 ratio is clearly the cheapest way to pay for such a stay. However, for stay categories below top-tier Marriott Rewards stays I believe most travel hackers are likely to find more value elsewhere.


I have always thought it was a curious fact about travel that, when you do enough of it, transportation itself consumes a smaller and smaller portion of your travel budget. Of course you can make it more expensive by traveling in more expensive cabins, but the fact is a single night in a hotel can easily cost as much as a plane ticket!

I've never had any trouble finding miles, points, or cash to pay for flights; I spend much more time calibrating the points I earn for hotel stays than I do for my air travel.

Doubt, skepticism, and risk management

Late last week there was a widely-publicized deal allowing you to earn 150 Avios per dollar spent at Match.com (with follow-up here). I had an exchange on Twitter with Ralph at PointsCentric that got me thinking about an issue that comes up fairly regularly in any travel hacking practice: the intersection of doubt, skepticism, and risk aversion.

I doubt nothing

Every travel hacker knows the feeling early on when they say to themself, "there is no possible way this will work," only to discover that it does. Doubt gets pounded out of you fast when you're regularly being paid by banks and merchants to shuffle money in, around and through them.

That's why I doubt nothing, and am willing to evaluate any deal at face value: what's the out-of-pocket cost, how much will I earn in rewards, what's the potential upside of the deal compared to other opportunities?

I'm skeptical of everything

In this case, the best case scenario was purchasing roughly 82,000 British Airways Avios for roughly $550, or 0.67 cents each, a 33% discount compared to transferring Ultimate Rewards points (worth one cent each) to British Airways.

Next, you can start considering the risks:

  • The purchase won't track properly;
  • The purchase won't track at all;
  • The deal will be retroactively changed or revoked;
  • Your account will be closed for abuse.

It turns out that what appears to have happened so far is that points were only awarded for "base" subscription amounts, not any additional features added to the subscription, meaning people who "maxed out" the deal earned 30,500 Avios for $550, paying roughly 1.8 cents per Avios.

Let me be clear: I did not predict this in any way, and am not taking credit for being prescient. I stated clearly in the Twitter exchange I linked to that I expected they would honor the deal (as they partially did). What I did say was that "you can buy Avios for one cent each year-round. The extent of the discount is the extent of your confidence." While I thought they would honor the deal, my level of confidence was extremely low, far too low to commit $550 to finding out whether my prediction was right or not.

It does sound like people are being refunded their Match.com subscription fees upon request, so those folks who jumped on the deal will, fortunately, be made whole.

Risk management is the intersection of belief and skepticism

There are two rules that are as true in travel hacking as they are in virtually any other field of human endeavor:

  • The majority of gains accrue to those willing to take the most risk, and;
  • The majority of losses accrue to those willing to take the most risk.

While I'm willing to take unlimited risk in my investment portfolio, I'm willing to take virtually no risk in my travel hacking portfolio. For me, travel hacking is about easy, consistent wins: I can calculate my profit on manufactured spend down to the penny, and I can fully comprehend the (not inconsiderable) risks.

I wrote back in January about a relatively speculative play I made, counting on an increased portal payout that never arrived. For that play I managed my risk in several ways:

  • I made the purchase on a card the statement closing date of which had just passed, giving me the benefit of a full statement cycle and grace period to determine if the purchase would track and post properly;
  • I made the purchase from a merchant with a generous, extended return period, ensuring that if the purchase failed to track properly (as it ultimately didn't) I wouldn't have to resell the merchandise at a loss.

As I explained in a recent subscribers-only Newsletter, I ended up making a small profit on the deal anyway, but I was only willing to pursue the deal in the first place due to the risk-management I had available.


When these time-limited deals come along, the fear of missing out that is the object of much popular fascination swings into action.

My basic view is that people should have a perfectly rational fear of missing out on the experiences they want to have, while trying to assuage that fear with respect to a particular deal or particular opportunity is far more likely to lead to expensive (or at least time-consuming) errors.

It's perfectly reasonable to relentlessly chase every deal that helps you achieve your goals, while only pursuing the fashionable deal of the moment after the most careful consideration.

Rebook your Hilton award reservations, but carefully

Some friends recently told me that since the latest changes to Hilton Honors went into effect they'd seen prices go down at some properties where they had existing reservations. I hopped online and saw that, indeed, the pricing on one of my upcoming reservations had dropped from 50,000 points to 46,000 points per night, and another had dropped from 60,000 to 57,000 per night.

Since both reservations were for 3 nights, that's 21,000 in found points, or $3,500 in American Express Hilton Honors Surpass grocery store spend. In other words, not that much, but not nothing either, and worth a few clicks in order to rebook at the lower rate.

Hilton is not good at stuff

First I attempted to change a 150,000-point redemption into a 138,000-point redemption. After completely the change, I was expecting to see my available Honors point balance increase by 12,000 points. Instead, it went down by 138,000.

In other words, instead of either calculating the difference in points required or redepositing the entire award amount and then deducting the new cost, the Hilton website simply deducted the new total points required.

That's not great. Today I called in and got a Diamond agent who, after I carefully explained what had happened 3 times, was able to figure it out and told me, "you should have cancelled the reservation and rebooked, or called in." She then proceeded to cancel my second, correct reservation and make me another, correct reservation, "explaining" that "the old reservation still has your certificate attached."

Also surprisingly rude!

Since I had her on the line, I also asked her to change my second reservation to reclaim another 9,000 miles. I was booked into an accessible room that had dropped in price, and the agent started interrogating me about whether I really needed an accessible room, and scolding me that they had a very limited number of accessible rooms, "like handicapped parking spaces."

This was so obviously inappropriate I don't have much to say about it, except to pass along what the Hilton booking engine itself says about the issue:

If Hilton thinks there is a problem with people booking accessible rooms in order to save points they can address the problem by not charging more for non-accessible rooms. Instead they chose to go the opposite direction, fine-tuning to an ever-increasing degree the number of points they charge for different room types, dates, and properties.

I'm reminded of the study made famous by Freakonomics, in which charging parents fines for picking up their children from daycare late increased parental tardiness, since it swapped a monetary incentive for an ethical incentive. The price mechanism is marvelously effective, but one of the things it's effective at is swapping financial calculations for moral calculations.


Naturally the reason I was trying to change my reservations was to ensure that space wouldn't disappear between cancelling a reservation and trying to rebook. That turned out to be a mistake! If you're worried about award space disappearing, your best bet is to call in.

Otherwise, just cancel your reservation and use the redeposited points to make your new reservation — that's what they'll do over the phone anyway.

Blending earning and redemption rates

When an affiliate blogger is trying to sell you a credit card that allows you to redeem bank points against a travel purchase, they sometimes pull this fairly ingenious, if transparent, sleight of hand:

  • When you earn airline miles for a purchase, then redeem those miles for travel, the value you get per dollar spent depends on the value you get per airline mile.
  • When you earn bank points and redeem them against a paid flight purchase, you don't just get the value of your bank points, you also get the value of any airline miles earned for your paid flight.
  • Therefore you should value a dollar spent with, for example, a BankAmericard Travel Rewards card not as the 1.5 cents in travel you get, but as 1.5 cents plus the airline miles those 1.5 cents in airfare will earn.

Did you catch the switch? All the work here is being done by the value of a dollar, a value which the blogger then assigns to whichever credit card has the highest signup bonus this week.

I thought of this yesterday because I'm in the process of booking a couple of spring and summer trips, and found myself in a somewhat related situation.

A Southwest Business Select fare buys a lot of Wanna Get Away fare

When I was booking my Southwest ticket to Montego Bay using US Bank Flexpoints, I booked a Business Select fare since Wanna Get Away fares weren't available and the difference in cost between Business Select and Anytime didn't move my fare into a higher Flexperks redemption band.

This creates the somewhat interesting situation wherein I redeemed 50,000 Flexpoints, worth $500 in cash, for a ticket worth $953.61, and earned 9,336 Rapid Rewards points, worth roughly $93 in Ultimate Rewards points I wouldn't have to transfer to Southwest in the future.

That future turned out to be yesterday, when I booked a ticket to Las Vegas for dates when Wanna Get Away fares are available. Since my ticket cost about 16,000 Rapid Rewards points, I only had to transfer 7,000 Ultimate Rewards points, worth $70, to Southwest to buy my ticket.

Now, it's worth saying that actual Southwest Airlines enthusiasts don't run into this situation: they book Wanna Get Away fares on every flight they're even remotely considering taking as soon as the schedule opens up, knowing they can cancel all their unwanted flights up to 10 minutes before departure.

But since I'm not a Southwest enthusiast, I was pleasantly surprised to see my best, cheapest choice for one flight earn over half the cost of my next flight on Southwest, which was also my best, cheapest option.

My first Delta Pay with Miles redemption

As long-time readers know, I earn 1.4 miles per dollar spent on my Platinum Delta SkyMiles American Express card by spending $50,000 each calendar year (or sometimes slightly more for technical reasons).

In order to break even against a 2.105% cash back credit card, my overall objective is to get about 1.5 cents per SkyMile on my award redemptions. If I can break even on my spend in that way, then I'll end up paying a $195 annual fee for 20,000 Medallion Qualification Miles and a domestic economy companion ticket.

Meanwhile, Delta-operated flights have a kind of "floor" on redemptions of 1 cent per SkyMile, since you can use Delta's Pay with Miles feature to reduce the price of revenue tickets by that amount: 10,000 SkyMiles reduces the cost of your ticket by $100, for example.

With all that said, today I made two Delta SkyMiles redemptions, both below my target threshold of 1.5 cents each!

I needed to book two one-way tickets, with a retail price of $362.80 and a SkyMiles award ticket price of 32,500 SkyMiles and $5.60 in fees. That produces a redemption rate of 1.1 cents per SkyMile for an award ticket, or just 1.54% cash back for purchases with my American Express card. Since I had the SkyMiles in my account, and I know my miles are worth nothing until they're redeemed, I booked my partner's ticket that way.

For my own ticket, I used the Pay with Miles option to redeem 35,000 SkyMiles against $350 of the fare, and pay $12.80 in cash for the remainder, getting exactly 1 cent per SkyMile in value. However, since Pay with Miles tickets now earn Medallion Qualification Miles, I'll also earn 2,663 Medallion Qualification Miles for the ticket. Compared to the award ticket redemption I booked for my partner, I'm paying 2,500 SkyMiles and $7.20 for 2,663 Medallion Qualification Miles.

From a pure imputed redemption value perspective, these two redemptions together leave me with a shortfall of $305.30, getting just $707.20 in cash value compared to the $1,012.50 I needed to break even on the prorated amount of spend (67,500 out of 70,000 SkyMiles).

What do these redemptions have in common?

I connected these redemptions in my mind because I happened to be making both of them on the same day. But they also both illustrate that, for me, there's no such thing as the perfect redemption: there's only the perfect redemption for the moment.

Instead of refusing to fly Southwest unless there were Wanna Get Away fares available, I redeemed fixed value points for the flights I actually wanted to take, and earned a boatload of Rapid Rewards points towards a future redemption. On the other hand, instead of redeeming SkyMiles at a low valuation, I redeemed them at an even lower valuation in order to accumulate a few thousand more Medallion Qualification Miles.

Finally, what all these redemptions have in common is that they let me pay as little as possible for the trips I want to take. And that, for me, is what travel hacking will always be about.


While the affiliate blogger version of this phenomenon is a barely-concealed attempt to sell credit cards, there's another element that rings perfectly true: earning a combination of fixed-value points, flexible points, and brand-specific currencies may give you the opportunity to leverage currencies against each other.

On the other hand, such a combination may cause you to orphan points in multiple programs without every getting sufficient value from any of them.

Money is fungible, but only if you funge it

Back in October, over at the Saverocity Observation Deck podcast Joe Cheung interviewed Noah from Money Metagame and they discussed a post Noah wrote last year asking the question, "Is Anyone Actually Saving Money By Travel Hacking?"

Read the whole piece, as they say, but rather than respond directly to him, I am going to be more proactive and explain how how you really can save money using the tools of travel hacking.

Money doesn't funge itself

Perhaps after opportunity cost, the fungibility of money is one of the most popular concepts from economics applied to travel hacking. If money is fungible, then it doesn't matter how you earn income: whether from employment, reselling, manufactured spending, or high-stakes poker, every dollar you earn goes into the same pot, out of which you make decisions about consumption and savings.

This is true as a description of money, but need not be true about your own behavior towards money.

Ringfence your profits

One way to turn your travel hacking into asset-building is to identify and isolate your profits from travel hacking and direct them exclusively towards long-term asset accumulation. For example, if you have a Fidelity Visa Signature card earning 2% cash back, you're already depositing your cash back each month into a Fidelity account. Instead of withdrawing it into your regular checking account, where it will funge with all your other money, put it into a separate account (I personally use a Consumers Credit Union Free Rewards Checking account that pays 3.09%+ APY).

The key point is that it has to be additive. If you already have an IRA housed with Fidelity that you would max out each year anyway, you aren't increasing your savings by depositing cash back rewards into it, you're just changing the funding stream. Instead, you could open a brokerage account and use your cash back rewards to fund investments in that account.

Buy travel from yourself (with a friends and family discount)

When I'm booking travel for other people, I normally charge them either the cash value of the points I redeem or the fairest price I can think of, for example one cent per mile for airline miles and half a cent for Hilton Honors points. Since in virtually all cases I would rather have money than miles and points, this is usually a way to get my friends and family big discounts and turn my stagnant balances into cash — a win-win.

I don't pay myself for travel I redeem on my own behalf, but you could! After all, if you treat a 25,000-point Hyatt redemption as "free," instead of costing as it does $250 in transferred Ultimate Rewards points, you might travel more than you really, objectively speaking, can afford to. If you instead sold travel to yourself (with the same friends and family discount you'd give anyone else) and moved money permanently into an investment account or other place you were sure you wouldn't spend it, you might develop a more tangible sense of the costs of your "free" travel.

A related issue arises when you redeem bank points like those earned with the BankAmericard Travel Rewards card, Capital One Venture, or Barclaycard Arrival+ against travel purchases: the redemption really does reduce your outstanding credit card balance, and so is clearly some form of "income," but you never actually see a deposit into a bank account. Instead, you simply don't pay off part of the credit card balance you incurred booking your travel. "Buying" travel from yourself is a way of dealing with this curious situation and converting hypothetical profits into long-term assets.

Liquidate into your net worth, not your bank account

I've written before about using Plastiq to liquidate tiny-denomination prepaid debit cards, like the balances left over on 5% Back Visa Simon Giftcards (you can find my personal referral link on my Support the Site! page). Plastiq has a lot of billers in its database, so you might be tempted to use it to pay monthly recurring bills, like your rent or utilities. But making those types of payments won't help you accumulate assets, they just leave extra cash in your already-funged checking account.

Instead, you could deliberately target those payments towards long-term debt reduction, like making additional payments towards your mortgage, auto loans, or student debt. That way, instead of replacing payments you are already making anyway, you're using travel hacking to pay down those debts more aggressively and both increase your net worth and reduce the interest you'll pay over the life of the loans.


The economics professors in my audience are welcome to tut-tut me for suggesting such degrading psychological tricks, but it seems crystal clear to me that if you don't use one of these or some other method of isolating and investing your profits from travel hacking, then it's exceedingly unlikely to actually improve your overall financial position. On the flip side, a few additional thousands of dollars invested in sensible low-cost index funds have the potential to turn your short-term travel hacking profits into long-term financial success.

Quick hits: hijinks booking Mileage Plan awards on Virgin America

In the last few months I've written a couple posts about booking award travel on Virgin America, with Alaska Airlines Mileage Plan miles and with HawaiianMiles, mentioning a few things I had come across doing everyday research.

Lo and behold, I actually just had occasion to book a Virgin America ticket with Mileage Plan, and found a quirk that might cost you thousands of Mileage Plan miles if you aren't paying attention.

Virgin America sometimes only makes one First Class award seat available to Mileage Plan at a time

I was searching for two tickets between the East Coast and San Francisco for June, and saw two First Class seats available for 60,000 Mileage Plan miles on Virgin America's nonstop flight:

After running the dates by my partner, I decided to just book one ticket for myself and book hers later. After running a search for one passenger, I found a First Class ticket available for just 25,000 miles:

While selecting my seat, I noticed that the First Class cabin was completely empty. After booking my ticket, I decided that booking a refundable 60,000-mile ticket for my partner made sense to make sure we were on the same flight. But when I searched again, another First Class ticket had become available at the 25,000-mile level!

Then I remembered that all Alaska Airlines tickets are refundable greater than 60 days before departure, so I went ahead and booked her a low-level ticket as well.

Out of curiosity, I searched again and yet another 25,000-mile ticket had become available. In other words, Alaska Airlines was only showing one low-level First Class award seat at time, but immediately made an additional seat available each time one was booked.

This doesn't seem to be a universal phenomenon, since I was able to find 7 First Class seats simultaneously on the same route on January 18, 2018, but it does seem fairly common for dates in June, when I'm planning my trip.

Since Alaska award tickets are refundable within 24 hours of booking, and outside of 60 days, there's no risk booking low-level award tickets one at a time to see if additional seats become available. If they don't, and you'd like to make different plans, you can quickly cancel all the reservations you were able to make.

The Mileage Plan search engine shows incorrect fees on Virgin America

For some reason the Mileage Plan search engine shows fees and charges of $19, but once you select a flight and continue the correct fees and charges, in this case $5.60, are shown.

My only theory is that the engine might be adding half the $25 partner booking fee, $12.50, to the security fee of $5.60, and rounding up to $19.

In any case, when you proceed to checkout you'll see the correct, lower fee before paying.