When focusing on points is a bad idea

I’m in the midst of a debate with a number of other frequent flyers about the best way for a particular customer to collect points for some planned travel in the coming years. And I find myself in a somewhat strange position in the discussion: I’m recommending that they do not focus on the points. Indeed, I believe that given the expected travel profile, playing the points game will actually cost the person more money than they’ll save by redeeming points. Needless to say, as someone who has rather enjoyed the bounty of collecting points over the years, I find myself arguing a somewhat unusual (and unpopular) viewpoint.

The airlines and credit card companies have worked quite hard to make the “points” culture a part of society. After all, they’re making a ton of money doing so; why shouldn’t they? But that doesn’t mean that consumers need to be buying in to it.

Points are a great resource but they come at a cost. Nothing in life is free and the opportunity cost of accruing points can be significant. On the credit card site of the equation the easy alternative is cash-back cards. Some are better than others (I love my Schwab 2% back card with no foreign exchange fees, for example, but it is no longer being offered to new customers) but in every case a decision must be made between a longer reward horizon and the immediate return. For folks who don’t charge a lot annually – the break-even is somewhere around $15,000/year in my opinion – paying that annual fee is a losing battle. And if you’re carrying a balance, forget it. The interest rates on the loyalty cards are ridiculously high.

On the flying side of the ledger, it really comes down to just how much you fly. For someone who flies 2-3 times annually the best deal, by far, is simply to shop based on price. Accruing 8-10,000 points per year through travel means 2-3 years before you even get close to the opportunity to redeem those points. In the mean time you’ve “invested” in a scheme that doesn’t pay interest and that ties up capital for an extended period of time. Not a wise way to grow your money’s value.

As the volume of travel picks up, the benefits do, too. That’s pretty much the basis of how loyalty programs effect loyalty. The trick is finding that dividing line. Flying 100,000 miles per year? A bit of loyalty will pay itself back in spades based on free checked bags, upgrades and other benefits. Even at 25,000 miles annually the value of loyalty starts to show up with some similar benefits. But for the folks doing 2-3x annual short hops, the much smarter move is cash in their pocket now.

For folks who travel a lot or who spend a lot – particularly those who want the opportunity to splurge on a premium cabin trip every now and then – the points game is a great thing. The potential up-side is huge, assuming you’re able to make sufficient initial investments. For most of the rest of the world, it is just another scheme where they’re getting duped into essentially discounting my travel in the pointy end of the plane. Not that I don’t appreciate it, but probably not smart for them.

There you have it. I’m a guy who’s pretty much obsessed with points telling people that maybe they shouldn’t be. Crazy, huh?

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.


  1. Not crazy at all. Lots of terrible advice in the thread and I only read the first two pages.

    Most of my family members travel so infrequently (similar to the OP’s situation) that I don’t even think about telling them about optimizing for mileage. I manage accounts for a few of them that I set up and a few of them joined my BMI family account (legitimately, all per the rules) so their “once in a lifetime UA flight” doesn’t go to waste.

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