Airlines have depreciated points for years
There have been some post-pandemic upheavals in reward point systems. Southwest, for example, changed the number of points it takes to get a free ticket in April. And as more people take to the cheerful skies, analysts like Rossman say more changes are on the way.
Over the past few years, airlines have shifted destination items on how many points travelers need to redeem their awards, says Rossman. First, they stopped tying points to the number of miles traveled by passengers instead of basing them on the amount passengers paid for the fare. Then they started charging more points to take a free flight.
Now that airlines are preparing to recover from their record low during the pandemic, they want customers who pay with cash rather than points. The slow recovery in business travel – which airlines make the majority of their money on – will only fuel the fire.
“They really want paying customers,” says Rossman. “So I think there will be a temptation with these programs to make the miles and points less worth it. In other words, charge more points or miles for the same free plane or hotel stay.”
Unused reward points that circulate in the system will continue to weigh on airlines’ financial planning in the years to come, as they represent future seats that they cannot sell for cash.
“A lot of these airlines and hotels may be trying to downgrade their programs just to liquidate those issues,” Rossman says. “These are liabilities for you.”
Use your points sooner rather than later
When it comes to deciding how best to use your points, this is what you should be following as soon as possible, says Rossman. While it can be fun to let go they build up, unused points bring you nothing and nothing.
“You want to pile them up to a point,” says Rossman, but “don’t hoard them just for the sake of hoarding.”
On the other hand, using your points this summer can be a bigger task than others simply because the demand for flights is so great. On July 1, airport checks at security checkpoints exceeded 2019 levels for the first time since the pandemic began, according to the Transportation Security Administration.
Travel volume is likely to stay high for the rest of the summer, and prices for everything from hotels to rental cars to flights are likely to stay elevated as well.
To get the most of your points, keep these tips in mind:
- Book flights as soon as possible. To avoid price increases and fee increases due to increased demand, try to book your trip as early as possible.
- Compare the total cost of air travel. Compare your total costs before booking a flight. Basic Economy is usually the cheapest fare class, but a low premium fare can end up being more expensive due to the restrictions and additional fees.
- Fly routes feeling the loss of business travel. With business travel most likely not to return this summer, routes that rely on business travelers will have some of the lowest fares. Consider traveling to big cities that have traditionally been business hotspots, especially international destinations.
The item “‘Use your points and miles’ as soon as possible, says the credit analyst: this is how you get the most out of them” Originally) released on Grow + acorns.