Rant: if you care about the American devaluation, you're doing it wrong
/Fact: I currently have no more than 100,000 of any airline or hotel rewards currency.
Does that sound like a horrifically low number?
Good. That means I'm doing it right.
Your miles and points are not safe
In case you've forgotten your loyalty program terms and conditions, allow me to refresh your memory.
"Always remember, the rules below are subject to change at any time. Unless otherwise stated, the current rules in effect at the time of your travel, request for a benefit or other transaction will govern that transaction."
"MileagePlus membership and benefits, including the Premier Program, are offered at the discretion of United Airlines and its affiliates, and United has the right to terminate the Program and/or the Premier Program or to change the Program Rules, regulations, benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the value of the mileage or certificates already accumulated."
"American Airlines may, in its discretion, change the AAdvantage program rules, regulations, travel awards and special offers at any time with or without notice. This means that the accumulation of mileage credit does not entitle members to any vested rights with respect to such mileage credits, awards or program benefits. In accumulating mileage or awards, members may not rely upon the continued availability of any award or award level, and members may not be able to obtain all offered awards for all destinations or on all flights."
What would it mean to "trust" a loyalty program?
There's an absurd conversation taking place between Gary at View from the Wing and Lucky at One Mile at a Time about whether American is a "trustworthy" loyalty program:
These are smart dudes, who have each forgotten more than I've ever known about earning and redeeming miles and points for free travel.
And yet here they are talking about "trusting" faceless, bankrupt multinational corporations.
Since those guys don't seem to get it, I thought I would share a few simple tips for never caring about an airline devaluation.
Tip #1: Earn points as cheaply as possible
The periodic US Airways "share miles" promotion allow you to buy US Airways miles for 1.14 cents each. Don't do it.
The only number that matters in this game is the spread between what you pay for your miles and points and what they're worth when you redeem them.
Unfortunately, you don't have any control over that second number.
Fortunately, you have complete control over the first number, and the lower that number is, the more pain you can absorb in the form of devaluations.
Tip #2: Redeem your damn miles!
There's only one mile that no loyalty program can devalue: the one you redeemed last year.
I only have 91,000 Alaska Airlines Mileage Plan miles. And look: I agree, that's a pretty low balance. Maybe you feel better having a cushion of 200,000 miles. Maybe you need 300,000 miles in your account to really feel comfortable.
But no matter how many miles you decide you need in your account for a rainy day, you need to be actively redeeming every single mile in excess of that number.
Why? Because the least value mile is the one you don't redeem. It's less valuable than a 1 cent per mile Pay With Miles redemption on Delta; it's less valuable than a 50,000 mile AAnytime award. It's less valuable than a $63 food processor.
It's worth nothing.
Tip #3: Earn cash back. Please.
There is one rewards currency that's totally out of the control of the airlines and hotels: the US dollar. You can redeem it for 100 cents per dollar online as well as at brick and mortar merchants. And it devalues at an extremely consistent and gradual rate of 1 – 2.5% per year.
Best of all, thanks to the techniques discussed here and elsewhere, you can purchase this rewards currency for a small fraction of its redemption value.
Sure, it takes a whole hell of a lot of US dollars to pay for a business class or first class international redemption. But that's what your huge stockpiles of (rapidly depreciating) airline miles are for...right?
