Travel hacking during the plague

I know my gentle readers have a lot on their minds these days, but so does everybody else. That makes the current crisis as good a time as any to step back and see if there are any unusual opportunities to deploy your very specific set of skills.

What to do with existing miles and points balances

This is the easy part. Since you already have the miles and points in your account, you should already be looking for opportunities to strategically redeem them, and those opportunities are now everywhere. Even with reduced flight frequencies as the airlines go into shutdown mode, there are thousands of unsold seats airlines are trying to remainder off by opening up award availability. To take as an example the first route I looked at, non-stop economy and premium cabin award space is wide open between Washington, DC, and Munich during Oktoberfest.

Remember: you don’t need to plan on taking any flights you book. If the crisis hasn’t abated by the time your travel dates come around, the flights will be canceled and you’ll be refunded. If the airline goes under, your miles won’t be any good anyway. The point is, as always, to redeem the miles and points you have for the trips you want to take. The fact that it’s hard to imagine what the world will look like 3, 6, or 9 months from now shouldn’t stop you from jumping on the opportunities that are available here and now.

The same goes for hotel reservations. For example, a casual check revealed 5-night award availability over New Years at the Grand Wailea, A Waldorf Astoria Resort. As above, you don’t need to actually intend to take the trip, but you should certainly take advantage of increased award availability now, while paid bookings are non-existent.

What to earn now

Your existing miles and points balances are a “sunk cost,” and you need to set them aside when considering what to earn now, unless you’re very close to redeeming one of the newly-available awards mentioned above. The last thing you want to do is chase award availability that’s gone by the time you earn enough points. Redeem your existing balance if you can, and forget about them if you can’t. If you don’t anticipate traveling, or even booking travel, for at least three months, you should pivot hard to cash back.

Fortunately, we’re in a great spot for earning cashback. Discover it cards will still earn 5% cashback at grocery stores for the next few days, and then you can pivot to Chase Freedom cards to earn 5 Ultimate Rewards points per dollar (in both cases on up to $1,500 in spending per card). Safeway, Meijer, and Giant are all running promotions on PIN-enabled prepaid debit card purchases (either in the form of immediate rebates or gas discounts) so this is as good a time as it gets to hammer out those rewards.

What about transferrable points?

So far, so good: if you have points, redeem them for refundable reservations while award availability is wide open. But what about your points balances which can be transferred in only one direction, like Chase Ultimate Rewards and American Express Membership Rewards points?

With these points, it’s necessary to think probabilistically. This is true all the time, but it’s especially true when we’re facing this level of uncertainty.

Once you’ve transferred a point from your flexible points currency to a given program, there are three possible outcomes: you’ll redeem it for a high value (expensive flight, premium cabin), you’ll redeem it for a low value (cheap flight, economy cabin), or you won’t redeem it at all (expiration, bankruptcy).

The same is true if you don’t transfer the point: you can redeem it for a high value (1.5 cents per point with a Chase Sapphire Reserve, for instance), or a low value (1 cent per point in cash, for example).

It’s common to ask the question, should you speculatively transfer points during promotions that award bonuses on inbound transfers? This is a version of the same question: should you speculatively transfer points to book awards you aren’t certain you’ll use just because award availability is wide open?

Manufactured spend, reselling, portal cashback

Two things are true: the present moment is characterized by unusually high risk and uncertainty. Many businesses, large and small, will survive the calamity. Many businesses, large and small, will not. That naturally creates an elevated level of uncertainty in otherwise-calm markets.

Metabank seems to do a pretty good job of manufacturing and distributing prepaid debit cards under normal conditions, but I don’t know whether they have enough cash on hand, or access to federal bailout money, to survive a total shutdown of economic activity.

Likewise most of the cashback portals seem to have low overhead and predictable cash flow. But if online spending shuts down for the next three months, where is their cash flow going to come from? Without it, how are customer cashback payouts going to be funded?

One response to these conditions is to scale back your activities to reduce your personal exposure to these vulnerabilities. That’s a good, natural response and no one will ask questions if you say you took the second quarter of 2020 off to see how things shook out.

But I’ve been around long enough to know that some people are going to be scaling way up, in order to take advantage of huge discounts today to reap outsized profits tomorrow. That’s not for me — I’m a small fish in a very, very large pond, but the folks who pull it off are going to be bragging about it on Twitter, or whatever the post-plague version of Twitter is, for the next 30 years.