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TPG reader Adele sent me a message on Facebook to ask about buying points and miles:

“Does it ever make sense to buy miles when airlines sell them at a discount?”

Airlines and hotels frequently offer promotions that can help you save on points and miles, either by giving you a discount on your purchase or by adding a bonus (which amounts to nearly the same thing). Whether you should take advantage of these deals depends not only on the price, but also on your travel plans.

To start with, compare the cost of buying rewards to the value you expect to get from them. Each month I post my own valuations of points and miles from a variety of loyalty programs, and you can use those to figure out whether the price is right. If you’re paying substantially less than what I’ve listed, you’re probably getting a good deal. If you’re paying substantially more, you should probably pass.

For example, with IHG’s recent 100% bonus, you could buy points for 0.575 cents apiece, which is less than my valuation of 0.7 cents. Those points could help you top off your account for an upcoming award redemption or save on hotel stays when the cash rate is higher than the cost of “buying” an award night. On the other hand, Southwest’s current 40% bonus gives you a price of 1.96 cents per point, which almost certainly exceeds the value you’ll get from Rapid Rewards.

My valuations are just ballpark numbers, and individual flights or hotel stays might get you more or less in return. Run the numbers for your own award redemptions to see what kind of value you’re getting by paying for points.

Intercontinental Hong Kong
Buying points can make sense, especially if you use them to save at high-end properties like the InterContinental Hong Kong.

I don’t generally recommend buying points and miles speculatively. Thanks to the risk of devaluation or expiration, travel rewards are a bad long-term investment. Unless you’re getting a really sweet price — like the Daily Getaways deal for Hyatt Gold Passport points earlier this year — stick to buying only what you need for upcoming travel.

That said, there are some occasions where buying rewards makes sense even if you’re not getting a great deal. If you need a small number of points to book a specific award, buying them is a viable option. That’s especially true if there’s limited availability for the flights or rooms you want, and you don’t want to risk missing out. Buying rewards is also an easy way to keep your account active and prevent the points you already have from expiring. While your goal in those scenarios isn’t necessarily to score points cheaply, you may as well take advantage of whatever discounts or bonus promotions are available.

Anyone thinking about buying points or miles in the near future should check out Nick Ewen’s post covering the latest promotions for winter 2015.

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.

Chase Sapphire Preferred® Card

Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.

Apply Now
More Things to Know
  • 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
Intro APR
N/A
Regular APR
16.49% - 23.49% Variable
Annual Fee
Introductory Annual Fee of $0 the first year, then $95
Balance Transfer
5.00%
Recommended Credit
Excellent Credit

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.