At Oscape, a lot of our travel is achieved using points and miles. While some are earned through credit card spending, transfer bonuses, and flying, quite a few are purchased directly. This immediately raises the question of whether it is worth buying points and miles in the first place. Not to mention when to buy, how much you should pay, and so forth.
Buying Points and Miles: It’s Complicated
Sadly, the answer to whether it is worth buying points and miles is complicated, and sometimes it’s a great deal, while in other situations, it’s a horrible value and should be avoided like the plague. You need to weigh up three things when it comes to points and miles purchased and whether it is worth it for You.
- How much are you paying per point/mile?
- How much value can you leverage each point or mile for?
- What are your upcoming travel plans?
What are your upcoming travel plans?
This is perhaps the easiest thing to factor in, which is to look at your travel plans for the next 12 months or so. If you plan one or two tentative trips, then committing to purchasing points and miles is probably not a good idea. This is mainly because most points and miles have a limited lifespan. Therfore if your trips fall through, you could lose them or have to take an unnecessary trip to burn through them.
On the other hand, if you know you will be taking seven trips this year, it is another story. Then points and miles purchases can make a lot of sense since it is doubtful that all your plans will fall through even if one or two trips are canceled.
Points and Miles Pricing and Value
There is a clear connection between the per-point price and the per-point value of your purchase. For instance, you can regularly redeem your points at ₵10 per point. So is it worth purchasing them at ₵7, ₵5, or even ₵3?
This will depend on how much you value the loss of flexibility of holding cash. Which in turn is connected to your travel schedule mentioned above. With a solid firm plan, the ₵7 per point is okay but not great. However, if your schedule were less stable. You would be looking at a price of around ₵3 per point to make it worth committing to a points purchase.
At the end of the day, this is a calculation you can only make depending on your travel plans, goals, and budget. However, as a rule of thumb, if you purchase airline or hotel points, you should look at a 100% increase in value to make the transaction worthwhile. For instance, if points are valued at ₵10 on the redemption side of things. I would never consider paying more than ₵5 per point at a push.
Point Purchase Promotions Are Key
As a rule, never buy points and miles with no promotions on offer. Virtually every loyalty program will, at some point during the year, offer a points purchase promotion with a bonus. Depending on the program, these can be as low as 20% – Yes, we are talking about you, World of Hyatt. To around 100%, which is very common for IHG and Hilton Honors. To the whopping 145%, Which Avianca LifeMiles seems to do regularly.
A perfect way to decide whether the promotion is good is to do some historical research to see the typical pattern of promotions on offer. For instance, if most offers are in the 50% region and you have a 75% offer. Then this is a standout deal that may be worth snapping up. On the other hand, if this promotion is in the 30% range, you may want to pass and wait for the next deal.
This historical research will also give you an idea about whether you will likely see another deal soon or if it is best to strike now. For instance, IHG has run nine promotions in 2023 so far, nine in 2022, and eight in 2021. So, if you want to purchase IHG points, you can generally wait until the time and bonus are right. Since, in all likelihood, another promo will be coming around the corner in about six weeks.
The truth of the matter is that virtually anyone who is a regular points and miles user accrues points in a variety of ways. More often than not, these will include point purchases when the time is right. Since this can be an easy way to boost your balance massively. However, remember that true fans will almost never buy points without a promotion.
Fans will have multiple ways to earn and redeem points, including co-brand cards and transferring flexible point currencies like Chase Ultimate Rewards, American Express Membership Rewards, and Capital One Miles. The key to getting the most out of the points and miles game is always to have plenty of options. This diversity lets you take advantage of great deals when they come along, and pass when a mediocre one is on offer.
Finally, to answer the critical question of this article, should you buy points and miles? Yes, but only when you have the knowledge, experience, and budget to make it work for you!