If You Have a Huge Points Balance, You Might Be Doing It Wrong

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Many people think of a large balance of frequent flyer or loyalty points as something of a status symbol – the bigger, the better. But points are not like money. I don’t think the number of points you have is necessarily a good metric of loyalty program success.

Of course, having lots of frequent flyer points is nice. You can use those points to do some really cool things. But that’s exactly my point: those points are only worth something when you use them.

The fact is that points gradually lose value over time, as loyalty programs increase the cost of redemptions, and the availability of specific rewards evolves.

There’s nothing wrong with saving up your points for a specific redemption that you value. For example, many Qantas Frequent Flyer members save their points to book valuable Oneworld Classic Flight Reward trips around the world. But if you have many millions of points just sitting in your account, it’s probably a good idea to start spending them!

Points lose value over time

Over time, most loyalty programs have increased the number of points you need to book particular rewards. This may only happen once or twice per decade, or much more frequently. But the general trend is upwards. Points are subject to inflation.

At the same time, you’re not earning any interest on the points that are sitting in your account (instead, the airline is). Depending on your loyalty program’s policy, unredeemed points could even expire if you’re not careful. So, saving points over many years for a rainy day – or retirement – is not really a great strategy. By the time you get around to using those points, they’ll be worth less.

Some loyalty program devaluations are not obvious. An airline could simply reduce the number of reward seats available at the lowest points level, or increase the carrier charges payable. It could even completely overhaul the way redemptions are priced, switching to dynamic pricing.

Some loyalty programs won’t even give notice before making changes that diminish the value of existing points.

This doesn’t just apply to airline programs. I’ve seen people with millions of points sitting in programs like IHG One Rewards, which a few months ago got devalued overnight without warning. When programs do these kinds of things, it makes the concept of saving points a bit silly, doesn’t it?

Don’t accumulate points mindlessly

Some people may even be mindlessly accumulating points with a particular loyalty program over many years, in the hope of redeeming a reward that they won’t realistically be able to get.

I see examples all the time of people with millions of Qantas or Velocity points who discover that there are no reward seats on flights they actually want. They may end up “cashing out” their points for Points Plus Pay or Classic Plus rewards instead – or worse, not using their points at all.

Qantas and Virgin Australia 737s
Think about whether Qantas, Virgin or perhaps another airline’s frequent flyer program is the best one for you. Photo: Jonathan Wong.

If you have a huge points balance, before continuing to collect more points, you should check that the points you have will actually get you the rewards you’re saving up for. If you aren’t even attempting to redeem your points every now and again, you don’t really know for sure whether your points-earning strategy is working for you.

Points redeemed is a better metric

Frequent flyer points are not like investments, and having points for the sake of having points doesn’t really make sense.

Rather than measuring loyalty program success with points balances, I think a far better metric is the number of points redeemed.

What do you think? You can share your thoughts on the AFF forum!

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 90 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.
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Definitely agree you need to spend points before they lose value by being 'enhanced'.

But equally some may see it as their retirement travel savings or the like - helps to have more flexibility in spending them.

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A timely article as I look at my ⬆️points balance.
I don't actively pursue points and over the years, I have been fortunate to get several F & J CR to Europe, USA and UK with relative ease.

Makes me think, why did I just buy J fares 🤦‍♀️ - oh, the DSC promo of course!

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Even points redeemed isn't a particularly good metric of success. You could blow all your points on a poor value redemption. It's one of the reasons why cents per point calculations do make sense, even though I don't love them because bloggers/vloggers manipulate them for clicks ('I got 15 cents per point for this first class trip — click my affiliate link to find out how' [by comparing it to a one-way last minute cash ticket]).

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Many frequent flyers seem to think that having millions of loyalty points is a sign of success. But there's another school of thought that points redeeemed is a better metric of success, and therefore having a low points balance (with a high inflow and outflow of points) may actually be better.

This opinion piece makes this case:

What do you think about this?

I had just under 1.4m Velocity points in my account until recently. I transferred most of them to Krisflyer and then redeemed them for 2x J SYD to LHR and 2x F CDG to SYD for our birthdays and wedding anniversary next year. This was always the planned use of them but took longer to organise due to covid etc.

Reply 8 Likes

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I was sitting on 5mil KF points as covid hit.
used every single point on J & F flights, no issues whatsoever.
not a single point expired

was quite easy. all saver fares, except the suites one back from FRA to SYD

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Rarely have a huge balance due to constantly planning and redeeming them on future trips. If we have a big trip planned then will save them up for that specific goal but wouldn’t peak at much over 1m points across all programs and used pretty quickly after that.

Reply 2 Likes

Agree in general but it's nice to have some in reserve for when a great opportunity comes along. I have a modest stash of American and Alaskan miles which I haven't touched for about 5 years.

Managed to redeem some today for BER-DOH-HKG on QR J/F for 90K AA and SIN-CMB-LHR on UL J for 75k AS. Both with very reasonable taxes

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My issue is not having the points but the use of them - I rarely use them for reward redemptions because my flights are usually date/time constrained. I recognise that using marketplaces is not good value, which only really leaves upgrades as the main avenue for me to spend points.

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I think saving enough points for a return long haul business class seat is the happy medium. You never know when you’ll need it. After that you’re hoarding.

Reply 4 Likes

My issue is not having the points but the use of them - I rarely use them for reward redemptions because my flights are usually date/time constrained. I recognise that using marketplaces is not good value, which only really leaves upgrades as the main avenue for me to spend points.

and this is where QF not sticking to the drum beat release of seats 353 days out is not good for those time constrained but can at least plan well in advance…

But as mentioned earlier, it’s nice to maintain a decent float for impromptu redemptions or something in the back pocket (eg UA miles for a short intra Americas or Europe *A hop when one way fares are $$$!).

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