Frequent Flyer Points are a Terrible InvestmentAccumulate enough frequent flyer points, and the world is your oyster! But how many points is too many?

Although frequent flyer points can be a valuable currency, they’re a terrible investment in the long term. Frequent flyer points – unlike money – don’t earn interest, can expire and may lose value at any time. In a way, a very large balance of points could be considered a liability.

AFF members are currently discussing their earning and burning habits, and how many frequent flyer points they have in their accounts. Many members find that, while it is relatively easy to earn points – for example, through credit card sign-up bonuses – it can be difficult to effectively redeem them for high-value rewards.

Just like money, it can be a good idea to save some of your points for a “rainy day”. But there is little point in earning points just for the sake of it.

The more points that you have, the more susceptible you become to airline devaluations. Airlines can and do change the number of points required to redeem for a reward at any time – sometimes even without notice. These changes are rarely in the customer’s favour. Points don’t earn interest either, so over time they are only going to become worth less – not more.

With some frequent flyer programs, points also expire after a fixed period of time. For example, Etihad Guest miles expire after two years and Singapore Airlines KrisFlyer miles expire after three years. Thankfully, Qantas and Virgin Velocity points can be kept alive indefinitely as long as you keep your account active. But there is still a risk that your points could expire if you don’t keep an eye on them.

Several AFF members are currently saving up their points for a round-the-world trip. The Qantas Oneworld Award can be a great use of Qantas points, especially if you’re able to book a trip in Business class. If you have a similar goal, then accumulating points towards your goal can absolutely be worthwhile. But if you have more points than you know what to do with, it might be time to start seriously looking at ways to spend them.

The problem with points balance as a measure is exactly as you say, a high points balance is in some ways a liability as you have a current account balance that has a certain value today, that does not appreciate it any way and that could be severely debased tomorrow with no recourse.

Yes the threat of devaluation at any time is always hanging there. I need to book those RTW’s.

Singapore Airlines, Cathay Pacific and Virgin Australia have all made customer-unfriendly changes to their frequent flyer programs in the past year. And it has been speculated that Qantas could raise the price of Classic Flight Rewards in the near future.

As GoldCanyon340 says, “the only good frequent flyer points are used frequent flyer points”. Points are not worth anything when they’re sitting in your account!

But some AFF members find that redeeming points can be easier said than done. For some, this is due to the difficulty of redeeming points. Others say they simply don’t have the time or ability to travel overseas for long periods – even if they could get “free” flights by redeeming their points.

It is so easy to accrue QF points from non-flying activities and getting even harder to redeem, which has made me rethink my strategy and whether to start using bank rewards which are transferable to other airline programs.

I have way more than I know what to do with. I’ll still earn but wish I had more time and opportunity to redeem.

Where do you stand? Join the discussion on the Australian Frequent Flyer forum: Points Count

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]