When do you contact the hotel, or, living gratefully

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The feeling I most associate with travel hacking is "gratitude." That's because before I discovered the world of miles and points, or at least before I knew just how big and beautiful that world is, I still traveled all the time.

Back then I traveled "on the cheap," the same way many people travel today: booking flights based on the price of a ticket, regardless of the number or inconvenience of the connections, and booking noisy, inconvenient hostels. That wasn't all bad — I once stayed in a trailer park reconfigured as a hostel on the far, far, far outskirts of Amsterdam and had a great time biking around the Dutch countryside. But it also wasn't great (the steel trailer got up to 100 or so degrees in the sun).

Altogether, that means I'm sometimes confused about what conditions rise to the level of a "complaint."

Club Carlson properties are confusing

Last month we stayed in two Club Carlson properties, the Radisson Blu Beke Hotel in Budapest and Radisson Blu Carlton Hotel in Bratislava, and both properties had an ice situation that was confusing (remember, I'm easily confused).

The Radisson Blu Beke Hotel had an ice machine on our floor that appeared to me to be a Soviet relic. After I tweeted about the thing, someone apparently managed to get it working and it was full of ice the next day. Although in all honesty, I'm fairly sure they just filled it with ice from the restaurant to get me to shut up.

The beautiful old Radisson Blu Carlton Hotel in Bratislava upped the weirdness ante: every single floor of the hotel had an ice machine in a specially designed cabinet across from the elevators, and every single ice machine was unplugged, apparently permanently. I called the front desk for an explanation and the young lady working was happy to send up a bucket of ice from the bar. So that was terrific service, on the one hand, but on the other hand what were the ice machines doing there on every floor?

Hyatt Diamond food and beverage amenities are confusing

One of my favorite things I learned last month was the neologism "regranding." It's when, well, it's when this happens.

But that's neither here nor there. What I find confusing is when a Hyatt property has already installed some fruit basket or something in your room, then asks whether you'd like the Diamond points amenity or the food and beverage amenity. As a rule, I always take the food and beverage amenity.

At both the Park Hyatt Vienna and Grand Hyatt Berlin, the property then sent up a bottle of wine, which was much appreciated after a day of travel.

But under those circumstances, does the already-existing bowl of fruit in the room count as the food amenity? If I selected the points, would someone come up and take the fruit away? At the Grand Hyatt Berlin I simply told the agent at checkout that we'd never received a food amenity and he gave me the 1,000 Gold Passport points instead. Was I wrong?

What kind of feedback do hotels appreciate?

The waiters at the Park Hyatt Vienna breakfast buffet are absolutely incompetent (with one marvelous exception). The first day, we got a cup of coffee from our waiter and never saw him again. The second day, I managed to place an order with my waiter from the à la carte menu, and never saw him again. Only on our third morning in Vienna was I able to actually receive eggs Benedict cooked to order from the à la carte menu, once I shanghaied the only competent waitress in the entire restaurant (if you're staying there, e-mail me and I'll let you know which one she is).

Why I started this post by mentioning "gratitude" is that none of these things bother me at all. I tweet about stuff because it amuses me, or because I think my readers will find it amusing, but the fact that I'm able to stay in a hotel with a spa (even if the guy who does massages no longer works there) is a radical improvement over the kind of travel I did before I learned about the game.

But the response on Twitter from the brands themselves is invariably, "did you contact the hotel?" And that's a question I never have a good answer to. The Radisson Blu Carlton Hotel presumably knows that its ice machines don't work, but does the Park Hyatt Vienna know that its service staff is incompetent?

What helps improve the experience of guests, and what is just another box the property has to check when the chain's social media team tells them a guest is complaining?

Conclusion

I never "contact the hotel" unless my comfort is directly impacted in some way, like the time we had to get a maintenance man to fix the lights in our very strange room at the very weird Grand Hyatt New York. So I'm just throwing this out there: when do you "contact the hotel," and when do you just enjoy the ride?

Quick hit: things I've learned about German trains

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On our trip to Italy in 2015, I reserved all our train tickets in advance, thinking by analogy to airline tickets and hotel rooms that I was locking in the best prices ahead of time. That turned out to be totally unnecessary, as Italian train tickets seemed to cost the same whether you book 6 months in advance or just walk up to the ticket counter on the day of travel.

Having learned from that experience, on last month's trip to Europe I didn't book any of our train tickets in advance, planning to maintain flexibility in case we wanted to spend more or less time in a particular city. That worked great until we got to Germany.

Buy at least a day in advance

Unlike the Hungarian and Slovak trains we took, the German national railway service Deutsche Bahn offers multiple fare types on many of their trains. The price differences aren't always very large, but if you don't know about them you might find yourself overpaying. Here are the fare options for a non-stop train from Vienna to Berlin:

Here's the train we actually took from Vienna to Regensburg to visit my partner's relatives in Bavaria:

And here's the train we took from Schwandorf to Berlin:

While the fares are reasonably close, the fixed-date and fixed-routing tickets purchased in advance would save 36.50 Euro per ticket on our routing, or 28.50 Euro per ticket on the nonstop routing.

So if it's at all possible, buy German Deutsche Bahn train tickets in advance!

Reserved seats

Like coach class tickets on Amtrak, second class tickets on Deutsche Bahn do not come with assigned seats. However, for an extremely modest charge (4.50 Euro on a sample trip), you can request a reserved seat.

You can decide whether or not this is confusing (we were extremely confused), but reserved seats on Deutsche Bahn trains are indicated by a pair of cities listed above each pair of seats. For example, seat 65 on this train is reserved by someone boarding in Leipzig and leaving the train in Hamburg:

In other words, if you are departing the train before Leipzig, or boarding after Hamburg, you're free to sit there. If you are sitting there between Leipzig and Hamburg, you'll have an irate German standing by your seat angrily gesturing at his ticket and at the digital panel above your seat.

The travel hacking index card

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I popped by the library this week to pick up "The Index Card," the famously slender volume of personal finance advice by personal finance columnist Helaine Olen (author of "Pound Foolish," a previous entry in my pretty good book review series) and University of Chicago professor Harold Pollack.

It's a pretty good book about personal finance, although not spectacular. The authors' "model portfolio" is invested in small-cap and international index funds for reasons that are not made clear, presumably in order to keep the book as simple as possible. But people who don't understand why they're doing the right thing are just as vulnerable to persuasion from hucksters are people who are doing the wrong thing. So while their model portfolio isn't terrible, it also doesn't have a straightforward evidence-based argument presented for it.

Reading "The Index Card" got me to thinking about what would go on a travel hacking index card. There's plenty of information about individual rewards programs and "sweet spots," which makes it easy to get bogged down in specifics — and difficult to tell the difference between real values and credit card sales pitches.

So what kinds of simple rules can keep a travel hacker from making expensive mistakes while developing a travel hacking practice that helps them achieve their financial and travel goals?

Here's what I came up with, with a few words about each.

1. Start slow

When you're just getting started, there's absolutely no reason to sign up for more than a single new credit card as you get a feel for how credit card rewards programs and travel loyalty programs really work.

This rule also applies to experienced travel hackers testing out new techniques. I'm happy to take a loss by putting $5 on a prepaid debit card with a $5 activation fee, so I can find out whether it's PIN-enabled before I start filling up shopping carts with them.

2. Keep good records, but don't get hung up on a single system

When you're dealing with thousands of dollars in financial products or merchandise, you obviously want to keep good records. But the system you develop when you are just getting started might not serve you well as you scale up or down. A reseller handling $50,000 in merchandise per month has different record-keeping needs than one who just jumps on the biggest deals. When a system starts to get clunky, take a step back and think about how you can improve or simplify it.

Likewise, an envelop in the glove compartment may work great when you're handling a few thousand dollars in money orders, but may start to become unwieldy when you're handling a hundred thousand dollars.

3. Build relationships

The overwhelming majority of travel hackers love this game and love helping people think about the myriad problems we encounter on a daily basis. The rest are ornery bastards, but you'll learn to identify them pretty quickly.

I'm always reminded of the couple that spent a million Starpoints on a paid American Airlines flight using SPG Flights, instead of transferring a small fraction of that number to AAdvantage and booking award tickets. If they'd known to ask anyone in the travel hacking community, they'd have half a million Starpoints left in their account! Don't be them.

4. Every deal dies eventually

I like to joke on Twitter about bloggers killing deals, but the simple fact is, most bloggers of any merit are fairly circumspect about deals they believe are fragile, and most credit card affiliate bloggers either don't know or don't care about real travel hacking deals, since there's no money in it for them.

Bloggers don't kill deals; time kills deals. So when your favorite deal dies, take a moment to mourn, but don't lash out at the blogger you're certain is responsible for its passing.

5. Treat employees calmly and with respect

Let's stipulate that you're always right. You know a store's point-of-sale system better than any of the cashiers there. You know a chain's purchase limits by heart. You have a Christmas card from the CEO clearing you to purchase an unlimited number of cash equivalents using the payment method of your choice.

If you cannot explain yourself briefly, calmly and with respect for the employee you're dealing with, you will fail, you will be remembered, and you will draw attention to techniques that will become harder to implement. Service employees don't work for you: they work for their supervisors, managers and, ultimately, for faceless corporations that they know are completely indifferent to their well-being.

Customer service employees have more to lose than you do.

6. Spend cash last

Once you've dug deep into the travel hacking weeds, you're going to have some unavoidable expenses (or investments, if you prefer): annual fees on your most valuable credit cards, activation fees and liquidation costs, losses on reselling mistakes, postage on 94 envelopes, and so on.

The last thing you want to do is unnecessarily add to those expenses by paying cash for your travel while you hold out for some "ideal" points redemption! You've already paid for the points — now use them. Save your cash for expenses that can only be paid for with cash.

7. Be realistic about your travel goals

In other words, earn the points you redeem and redeem the points you earn. I'm not saying you should think small: if you want to go to the Maldives, travel hacking makes that possible, if not exactly easy. But don't build a travel hacking strategy around something amorphous like "this blogger made the Maldives sound nice."

If you have an ambitious goal, then pick a date (or range of dates, since award availability can be tough), pick a strategy (Hilton or Hyatt?), earn the points you need, then stop. Enjoy your vacation.

If you have less-ambitious goals, then focus on earning the miles and points you find yourself redeeming most often. Consider using fixed-value points currencies like US Bank Flexpoints. Earn points you're likely to be able to use across a range of destinations, like Hilton HHonors.

8. Don't structure transactions

It's against the law, and if you do it the government will ruin your life.

Conclusion

The travel hacking index card isn't a travel hacking strategy: it's a strategy for developing a practice that will achieve your travel and financial goals with mistakes as few and cheap as possible along the way.

So what did I miss — what would my readers add to a travel hacking index card?

About Hyatt suite upgrade awards

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Hyatt Diamond enthusiasts know that there are three kinds of room reservations at Hyatt properties: paid reservations, Free Nights, and Points + Cash reservations.

Points + Cash reservations are popular for two key reasons: they earn elite-qualifying stay credits and, like paid reservations, they're eligible for Diamond suite upgrade awards.

During my stay at the Park Hyatt Vienna, I got the best of both worlds.

Hyatt is thrilled to combine reservations into a single stay

There are few trivialities more annoying than having a room key deactivated in the middle of a hotel stay because you made two or more reservations as award availability or points became available.

As Joe Cheung pointed out during my most recent appearance on the Saverocity Observation Deck podcast, Hyatt is able to combine reservations so that multiple reservations are treated as a single stay, which is a terrific convenience given how some of their properties throttle Points + Cash award availability, potentially making you piece together a stay gradually over many months.

How I applied a suite upgrade award to two award nights

Soon after being matched to Hyatt Diamond status, I booked three Points + Cash nights at the Park Hyatt Vienna, and applied one of my four Diamond suite upgrade awards.

Then, since I don't chase signup bonuses and was well below the supposed "5/24 rule" for new Chase credit card approvals, I applied for a Chase Hyatt credit card and was approved, which quickly earned me two free nights at any Hyatt in the world, as long as award space was available.

I bided my time (i.e. set a Hotel Hustle award alert) and finally award availability opened up for my second and third nights in Vienna. I placed a quick call to Hyatt and had my Points + Cash award nights replaced with free credit card nights.

That made me wonder: would I have to change rooms after my first night, since that was the only night I had the right to apply a suite upgrade award to?

Of course not.

Can you apply suite upgrade awards to award nights? Maybe!

If you can replicate my experience, the advantages are obvious: you can earn a stay credit based on your first, Points + Cash night, but save cash by redeeming only points for all your subsequent nights.

So to review, here was my experience applying a suite upgrade award to my Park Hyatt Vienna stay:

  • book a Points + Cash stay;
  • apply a suite upgrade award to the entire stay;
  • replace all but the first night with award nights;
  • enjoy my suite for the entire stay.

Since my first night was also my 5th paid night during the current Stay More Play More promotion, I even got to take home 5,000 bonus Hyatt Gold Passport points for my trouble.

What did I miss: JetBlue edition

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I got back last night from New York, the final leg of a ridiculously circuitous trip through Hungary, Slovakia, Austria, Bavaria, and Berlin.

It was fun!

After managing to go all last week without a blog post (subscribers did get a newsletter out of me) this week I'll be easing back into the old blogging routine with some reflections on what I've learned. I mostly can't stand trip reports, so don't expect one! But it's an ironclad rule that travel hacking involves a lot of things that aren't immediately obvious, or spelled out in terms and conditions, and I've always sought to help readers understand how those things really work.

But first! Let's talk about JetBlue.

JetBlue is running a generous points match from Virgin America

You've certainly seen a rundown of this deal other blogs, but to refresh your memory, JetBlue is offering a tiered points match to Virgin America Elevate members with points in their Elevate account who book a new roundtrip JetBlue ticket after registering and before August 31, 2016.

To break that down even more clearly, the terms state:

  • you will receive bonus TrueBlue points up to 300% of your current Virgin America Elevate balance (30,000 TrueBlue points for a balance of 10,001 Elevate points);
  • if you submit a screenshot of your Virgin America Elevate dashboard and your TrueBlue account number by July 4, 2016;
  • and book and fly a new roundtrip JetBlue reservation after having your request approved but before August 31, 2016.

Should you go for it?

If you are planning to book a roundtrip JetBlue flight between now and August 31, 2016, and have a screenshot of your Virgin America account dashboard with more than 500 miles in it, you should definitely register for this promotion!

There's nothing glamorous about picking up nickels in front of steamrollers, but there's always a nickel in it for you.

Should you hack it?

On the other hand, a lot of bloggers are recommending "maximizing" the value of the promotion by transferring 40,001 Starwood Preferred Guest Starpoints to Virgin America (yielding 50,001 total Elevate points), then requesting the match, and then flying the cheapest JetBlue roundtrip flight they can find out of nearby airports.

As you might have guessed, I have a couple of problems with this.

First, a transfer of 40,001 Starpoints does not maximize the value of the promotion; a transfer of 10,001 Starpoints does. That's because at the 10,001-Elevate-point level JetBlue adds 30,000 TrueBlue points to your account, while at the 50,001-point level they add just 75,000 TrueBlue points. If 45,000 TrueBlue points are worth $630, you'll get just 2.1 cents per Starpoints for the additional 30,000 Starpoints transferred, which is below their imputed redemption value of 2.105 cents! That is, in short, not a promotion at all.

Second, even at the most valuable 10,001-point level, you're required to make and fly a new roundtrip JetBlue reservation by August 31, 2016. Maybe you have access to cheap JetBlue flights. Maybe you don't place a high value on your time. But you need to have access to cheap JetBlue flights and not place a high value on your time to justify booking a mileage run in order to trigger the promotion.

Finally, let me gently remind my readers that the point of travel hacking is not to accumulate as many points as possible in as many programs as possible, but rather to pay for the trips you actually want to take, while spending as little money as possible. If you are able to successfully redeem 30,000 TrueBlue points for $450 worth of travel, and you're able to successfully redeem 10,000 Virgin America Elevate points for $220 worth of travel, and you manage to trigger the roundtrip flight requirement on a trip you were planning to take anyway, then congratulations: you'll have earned $670 worth of travel for $210 worth of imputed redemption value (assuming you manufactured all 10,000 Starpoints at an otherwise-unbonused merchant). That's a pretty good discount of 68.7%.

But to secure that pretty good discount, you have to build your redemptions around maximizing the value of your TrueBlue and Elevate points, even if another points currency would have offered you better connections, availability, or out-of-pocket cost.

Conclusion

There are a lot of people served by JetBlue and/or Virgin America, and a disproportionate number of travel hackers no doubt live in the large urban centers those airlines serve. If the stars align such that this promotion scores you huge, valuable points balances at little or no out of pocket cost, rest assured that I'm here cheering you on.

But if you've never flown either JetBlue or Virgin America and you find a credit card huckster is trying to get you excited about JetBlue because they've temporarily raised affiliate payouts to accompany this promotion, feel free to come back and re-read this post for a slightly different perspective.

Related reading:
On the value of not chasing deals
The JetBlue Points Match Is Worth It And You Should Do It
JetBlue Points Match Promotion: Is It Worth It?
 

Quick hits: Turkish Airlines, IST, Budapest

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Hello from the Radisson Blu Carlton Hotel in Bratislava!

It's been a hectic few days, so I'm taking it slow today and thought I'd check in with some thoughts on the first leg of our trip.

Turkish Airlines is very nice

Thursday night, I flew from Chicago to Istanbul on TK6 in the economy cabin. The seats were pretty comfortable but there was not quite enough legroom for me to ever get comfortable enough to sleep for more than a few minutes. Next time: business class (famous last words).

Fortunately, there was a wide selection of movies available on the large seat-back screens, so I got caught up on some movies I'd missed this year. I particularly enjoyed this bizarre Indian television show "Great World Hotels," which follows sultry hostess Elisha Kriis as she coos over fresh fruit and in-room swimming pools at Amansara.

I also enjoyed watching our tiny Turkish flight attendants free-pour cocktails from novelty over-sized bottles of liquor.

Istanbul is a pretty easy place to connect internationally

It's become fashionable in certain circles to lament that US airports are collapsing into rubble around us while international airports are sleek hyper-modern affairs. Not Istanbul!

Istanbul Ataturk Airport still features the teeming mass of humanity and rundown facilities that makes you proud to be an American. I don't think I've ever seen an airport with more toilet facilities, or an airport where such a high percentage of the facilities were closed for "cleaning." It's also been a long time since I've seen someone casually smoking a cigarette in a public restroom!

Travel is fatal to prejudice, as people are fond of remarking in their social media profiles.

Anyway, connecting in Istanbul to our Budapest flight was a cinch, although a mobility-impaired person might struggle with the long walk between gates, and our bags were checked all the way through to Budapest without issue.

Budapest is lovely, and cheap

I had a three-night reservation at the Radisson Blu Hotel Beke, which is a fairly basic business hotel, and like all Club Carlson properties featured a range of confusing amenities:

  • Treadmills and other workout equipment were placed poolside in the basement athletic center;
  • The health center prominently advertised massages, but when I inquired about a massage with the attendant, he explained that his colleague used to provide the massages, but he doesn't work there anymore;
  • Our room featured a real king-size bed, but with two twin comforters;
  • When our room was made up, the housekeeper didn't replace the coffee — but did artfully rearrange the empty plastic packets we'd already used.

We spent a few days exploring Budapest, and visited the Széchenyi bathing complex, which was a very interesting experience. I've never seen so many pools with such slight differences in temperature before. Pro tip: either bring your own towel, or bring cash to rent one. You'll pay 3,000 Hungarian forints and receive a towel, then get 2,000 forints back once you return it.

Speaking of forints, Hungary still hasn't adopted the Euro, and at this rate it seems unlikely to ever do so, making visiting Budapest ludicrously cheap. Over 3 days in the city, I spent $308 total, including our pre-arranged (i.e., overpriced) cab to the hotel, train tickets to Bratislava, and some pretty thorough minibar-raiding at the hotel, and I don't think I could have spent any more money if I were trying to.

That's it for now; I'm off to see what I can see in Bratislava!

Well, I'm going to Europe

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As much as it pains me to say this, having dropped out of the formal labor force a few years ago, for the last few months I've been busy.

The bulk of that business has been maximizing the value of my Wells Fargo 5% cash back offer. But as of tomorrow, my 6 months of Wells Fargo 5% cash back will be at an end, and I'll be flying to Europe to spend a few weeks jaunting around Hungary, Slovakia, Austria, and Germany.

Since I'll be staying at perfectly normal hotels the entire time I'll be in Europe, I tentatively plan to continue updating the blog a few times per week, but while I'm overseas the focus may shift from day-to-day manufactured spend and loyalty strategies to my first-hand experiences in Europe.

But who knows?

In any case, I don't have any vacation posts scheduled or anything like that, so you can still expect my unvarnished opinions on whatever happens to be going on in Eastern Europe and the travel hacking universe.

By the end of June blog programming should return to normal, as long as you don't go and ruin manufactured spend while I'm gone.

Paid flights are not a strategy for earning redeemable miles

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This week as the blogosphere erupted like a school of piranhas around the bloody calf of the American AAdvantage devaluation, I quipped on Twitter that "'Where to credit your paid flights' should be of tertiary interest to travel hackers. Interesting question, but not very lucrative."

Let's break that down.

Primary interest: how much are you paying?

Due to the phenomenon I call price compression, how much you pay for your flights has only a glancing connection to the retail price.

  • If you manufacture spend on a US Bank Flexperks Travel Rewards card, you'll enjoy a discount of 62-75% off of retail, depending on where in a redemption band your flight falls.
  • A Citi Prestige credit card gives a 37.5% discount off ThankYou point redemptions on paid American flights, which increases to 79% if you're able to manufacture spend with a Citi ThankYou Premier card at gas stations.

Paying less for your travel may not be your only interest, but it should be a primary interest for the simple reason that the less you pay for your travel, the more of it you can afford!

Secondary interest: what are you getting?

Of course there's a difference between being frugal and being cheap: what you get for your money matters too, or we'd all be flying in the back of Spirit Airlines planes with our knees pressed against our chests (once — never again!).

In my experience, Delta Airlines is the domestic carrier most likely to get me where I'm going on time and in comfort. That doesn't mean I'll go out of my way to book Delta flights, but once price compression levels the differences in fares, Delta is far and away my preferred carrier.

Tertiary interest: where should you credit?

The reason I call the decision of where to credit paid flights of tertiary interest is that it's difficult to imagine a situation in which it would outweigh the factors of cost and convenience. In other words, there's no reason a travel hacker should pay more for less convenient flights that happen to earn a particular rewards currency.

There are two reasons for this. First, redeemable miles are cheap. When you can manufacture spend to earn exactly the number of redeemable miles you need, whenever you need them, miles earned through paid flights should be a rounding error in your overall rewards portfolio. Admittedly, it's a rounding error in your favor, and I'm not suggesting flying without a frequent flyer number attached at all. But if you have an award redemption in mind, it would be strange to count on your revenue flights to earn the needed miles.

Second, I'm happy to admit that elite status is valuable. But under most circumstances, it's unpredictably valuable. Here's a real-life example: I'm currently booked in economy on a United award reservation to Europe. I've been occasionally checking for business class award availability, and yesterday it suddenly appeared. For 40,000 more United miles, I can move to a premium cabin on a flight over 10 hours. Good deal! But as a MileagePlus general member, United also wants to charge a $100 change fee for each ticket. As a Premier Silver, I'd pay $50 per ticket, a Premier Gold would pay $25, and Premier Platinum and 1K members would pay nothing. That's real value: not some kind of squishy mental accounting, but cold hard cash that would be left in my pocket due to elite status.

The same example shows the problem with counting on elite status to generate big savings: to get predictable value from elite status you would need to know in advance which reservations, booked with which miles, are likely to require changes. If you spread your award reservations around between Alaska, Delta, American, and United, let alone the other transfer partners of your flexible rewards currencies, you will be left paying change fees (or keeping suboptimal reservations) on all the ones you don't earn elite status on.

Conclusion

When elite status is the natural byproduct of your travel hacking practice, it's a fine way to stretch the value of your rewards. As a checked-bag enthusiast, I enjoy my Delta SkyMiles Silver Medallion status, which saves me a few hundred dollars a year in checked bag fees.

But the less a person flies, the less value they receive from elite benefits. The problem with chasing elite status is not that there's anything wrong with elite status, but that it's expensive and inconvenient. If you live in a city where two or more airlines battle each other constantly on price and convenience, then it makes sense to pick one with which to run up your elite-qualifying tally.

Otherwise, chasing elite status and redeemable miles is playing the airlines' game, not ours.

Earn valuable points, or expensive points?

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I've been messing around with shopping portals for the past few days, which is always a good opportunity to reflect on deeper questions about the miles and points lifestyle.

Manufactured spend gives one vision of cost

As a manufactured spend enthusiast, I spend a lot of time comparing different credit cards, merchants, and earning rates to make sure I'm getting the most value for each of my manufactured dollars in spend. Using that perspective, every mile or point I manufacture costs precisely the dollar value of the cash rewards I would otherwise earn on the same spend. That's my opportunity cost: the value I need from a non-cash currency to justify earning it instead of cash.

Portal spend can turn things sideways

What I started thinking about while mucking about on shopping portals was this question: should you earn the most valuable points (usually the points you'll actually redeem), or the most expensive points when clicking through a shopping portal?

Here's a simple example: according to Cashback Monitor, you can earn 5% cash back when clicking through the Discover Deals portal to purchase Apple merchandise. Alternatively, you can earn 1 United MileagePlus mile per dollar spent at the Apple store.

Paying 5 cents per MileagePlus mile is a preposterously bad deal, since United miles can be purchased for 3.76 cents each any day of the week directly from United.

Now take a look at a merchant like eBay, where we can earn either 1.3% cash back or 0.5 United miles per dollar spent. At 2.6 cents each that's a little below the retail price of United miles, so you might consider using the United portal instead of earning cash back.

How opportunity cost differs from price and value

At this point you should be asking yourself, "why would I pay 2.6 cents per Mileage Plus mile when I can pay 1 cent per mile by transferring flexible Ultimate Rewards points into my United account?"

And that's exactly right — if you would, in fact, redeem your Ultimate Rewards points for cash, then the price you would pay for United miles would be 1 cent. But if you would otherwise redeem your Ultimate Rewards points by transferring them to another travel partner, like Southwest or Hyatt, then your opportunity cost isn't 1 cent — it's one Rapid Rewards point or one Hyatt Gold Passport point.

This matters because you may get more value from a Rapid Rewards point (for example, if you have a Southwest Companion Pass) or a Hyatt Gold Passport point (by redeeming at expensive properties or taking advantage of Points + Cash redemptions) than you do from a United Mileage Plus mile. Using the example above, the opportunity cost (2.6 cents) of earning United miles rather than cash back may be lower than the opportunity cost (1 Rapid Rewards point or 1 Hyatt Gold Passport point) of transferring Ultimate Rewards points to United.

United miles aren't valuable, but they are expensive

I don't like United Airlines. I find them consistently rude and unreliable, so I don't fly them if I can help it. But even I admit that their miles can be useful for redemptions on their Star Alliance partners, like my upcoming Turkish Airlines flight to Europe. The problem is that United miles transferred from Ultimate Rewards are expensive, because I place a lot of value on the ability to transfer Ultimate Rewards points to Hyatt Gold Passport, and each point I transfer to Mileage Plus is one I can't transfer to Hyatt.

This creates the kind of situation I've described, where it may be worthwhile to pay a high price for each United mile, since doing so preserves the ability to transfer Ultimate Rewards points to Hyatt, where I'll get more value, instead.

For the sake of completeness (and to silence quibblers), I do want to mention that Hyatt also sells points (up to 55,000 per year before bonuses are added) for 2.4 cents each. So it's not strictly speaking worthwhile to pay 2.6 cents per United mile just to "save" your Ultimate Rewards points since your total cost will be lower simply earning cash back, transferring Ultimate Rewards points to United, and using the cash to buy Hyatt Gold Passport points. Using other merchants and portal payout levels, and accounting for bonuses on purchased miles and points, the numbers will naturally be different.