While I didn't coin the aphorism, I repeat it every chance I get: the least valuable point is the one you don't redeem.
It doesn't matter how big the portal bonus, or how cheap the manufactured spend, if your balance in a single account never dips below 900,000 you have 900,000 worthless miles.
I'm not judging; we all make mistakes. But the first thing to do when you find yourself halfway up a mountain is to stop climbing!
Earn the miles you redeem
There are two typical strategies for an affiliate blogger promoting the flavor of the month increased signup bonus (or increased affiliate payout):
- explain how great a loyalty program is and how valuable the signup bonus is;
- or highlight specific destinations or properties that the signup bonus can get you to.
So you can find Bankrate.com employee Jason Steele discussing free one-ways on United award trips in order to sell Chase credit cards, or Summer Hull name-checking aspirational Marriott properties to promote an increased signup bonus on their co-branded card.
But if United miles aren't the miles you redeem and Marriott properties aren't the properties you stay at, you shouldn't be thinking about these cards at all!
Even if you do read a review of Lufthansa First Class and think to yourself that it wouldn't be too bad to try it sometime, you need to do a reality check first: are you going to learn the nuances of Lufthansa award availability? Are you willing to buy a tag flight to Lufthansa's US gateways if you can't find United award space? Are you able to plan your vacation time around those flights?
My point is that mere interest isn't enough to waste a credit card application on — you need a plan you're willing to commit to. Otherwise you risk ending up with a pile of worthless United miles or Marriott points.
Everyone's miles and points strategy is different, and I'm not going to tell you what miles and points you should be earning, or which are the most valuable, because you already know which loyalty currencies are the most valuable: they're the ones you're able to consistently redeem for the trips you actually want to take.
Redeem the miles you earn
So you got snookered into earning a bunch of miles and points that have been collecting dust and are slashed in value every 18-to-24 months. It's true they're worthless until you redeem them, but the good news is they're only worthless until you redeem them, and that's completely in your power.
So here are some suggestions for cleaning out those stuffy old accounts and finally turning your aging miles and points balances into real-world value.
- Pay with points. I get e-mails a few times per month from readers who are frustrated that after earning a few hundred thousand Membership Rewards points, they find they're virtually unusable for the supposed "sweet spot" redemptions: Delta and Frontier are the only US-based airline transfer partners, British Airways is distance-based and imposes fuel surcharges, and the other airline programs have learning curves too steep to quickly master. But if you ever pay cash for airline tickets, you're in luck — you can simply buy those airline tickets with your Membership Rewards points and unlock one cent per point in value (more with the Business Platinum American Express)!
- "Worse" transfer partners and rates. It's true that Membership Rewards points transfer to Starwood Preferred Guest at a 1000:333 ratio. It's also true that Starpoints are both more valuable and more flexible than Membership Rewards points. If Starpoints are the ones you're comfortable aggressively redeeming, 50,000 of them are worth more than 150,000 unredeemed Membership Rewards points.
- Standard awards. I wrote about "standard" or "high-level" awards in a slightly different context last month, but they fit right in here. If you are sitting on hundreds of thousands of AAdvantage miles from multiple Citi Executive / AAdvantage signup bonuses because you can't find low-level Business or First award space, book an AAnytime award instead. Yes, between the US and Tokyo you'll pay 120,000 AAdvantage miles for Business or 170,000 miles for First class each way, but you'll also have your pick of dates and American-operated flights.
- Hotel stays. You'll hear many bloggers tell you that airline miles are best redeemed for flights and hotel points for hotel stays. My question is, compared to what? If you're sitting on millions of miles while paying cash for hotel stays, you're missing out on an opportunity to save money, whether or not you're "maximizing" the value of your miles. Kenny at Saverocity wrote last week about redeeming AAdvantage miles for hotel stays and getting up to 1.6 cents per mile, but even getting 1 cent per mile in value is 1 cent more per mile than you're getting while they sit in your account unredeemed.
- Give away and sell awards. Are your friends and family planning a trip? You may not be able to find award space for the dates you want to travel, but you might have better luck searching for their dates. Have them pay you for economy and book them into first. In my experience, people tend to like that.
Conclusion: remember why we play this crazy game
Everyone's motivation is different for travel hacking. Maybe you want to travel more. Maybe you want to pay less for the trips you were already taking. Maybe you want to travel in classes of service and stay at hotels you wouldn't be able to otherwise afford.
Whatever your motivation is — and no motivation is right or wrong — it's realized only at the moment of redemption, not the moment of earning!