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TPG reader Eric tweeted me to ask:
@thepointsguy- “With all the major devaluations recently, I was wondering if there are often positive valuation changes when the economy weakens?”
I’m generally a positive person, but I feel like lately I’ve been a Debbie Downer, writing constantly about devaluations, programs making negative changes to benefits, and becoming less lucrative in general. With devaluations, it takes more effort to earn points, and when you’re ready to redeem them, you get less value in return.
So if the economy takes a turn for the worse, does that create better or more points opportunities for consumers? When the economy weakened a few years ago, I did see some great promotions, like several from hotel companies hoping to fill rooms. Recently, earning points has been much more difficult, promotions have been weaker, and more hotels have opted out of promotions. Even airlines used to offer a lot more double points and elite qualifying mile promotions that are no longer available.
Many hotels readjust their points categories to reflect the current value of rooms. When the economy was hit hard, we did see some point valuations going up, because it became less expensive to use points for certain rooms. However, this happens not just when the economy weakens. For example, points valuations increase when an airline joins an alliance, since those points are suddenly unlocked from a single carrier, giving the consumer more power.
I think one of the biggest upward movers this year has been the Citi ThankYou Rewards program, which added several new transfer partners. The economy isn’t going down, yet we’ve seen that currency become much more valuable. I have a feeling that they’ll be adding more transfer partners as well, and ThankYou points will continue to rise in value.
Despite the recent doom and gloom in the points and miles world, clearly the news isn’t always bad across the board, which underscores the need to diversify and reward programs that are providing more value instead of taking it away. When a program consistently devalues, and you don’t take away your business to penalize them, you’re implicitly telling them that the devaluations are okay with you. Loyalty should go both ways, so if your program of choice is going downhill, consider changing to another that you feel deserves your business. Hopefully that way we can fend off future devaluations and show companies that loyalty should be rewarded, not punished. Let’s hope for more positive, rather than negative changes!
With great transfer partners like United and Hyatt, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards