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TPG reader Tim sent me a message on Facebook to ask about award redemption strategies:

“I currently have a stockpile of AAdvantage miles, but it seems like they’re continuously losing value. Is it okay to hold onto them, or should I try to use them as soon as possible?”

I’ve been loyal to American Airlines for years now, and while I still think there’s a lot to love about the AAdvantage program, it seems to be heading in the wrong direction. Already in 2016, we’ve seen a major devaluation in the award chart, a switch to revenue-based mileage and reduced earning rates for partner flights in economy. Unfortunately, American isn’t the only one running in this race to the bottom, and with so many loyalty programs making negative changes, it’s a good idea to shorten your horizon for award redemption.

Travel rewards make a bad long-term investment, so it’s best to avoid stockpiling them. That said, award travelers have diverse needs, so I don’t think there’s a specific number of points or miles that you could universally classify as excessive. A million miles is a lot for someone who just flies in domestic economy a few times a year, but might not be enough for someone booking a first-class international award every month. Instead of looking at the quantity of rewards in your account, consider how they fit into your upcoming travel plans.

I think a good rule of thumb is to keep enough on hand to cover you for the next year. You can adjust that timeline depending on how quickly you earn rewards through paid travel and spending — for example, you don’t need as much in your account if it’s easy to replenish. You might also add a little cushion in case of emergencies, but anything beyond that is probably overkill and leaves you more vulnerable to devaluations.

On the flip side, you don’t want to find yourself scrambling to earn more rewards because you don’t have what you need. Building a one-year reserve will give you more flexibility to take advantage of award sales and other opportunities, and it’s typically easier to find availability further in advance. Basically, you have to pace yourself; it’s good to have enough points and miles that you have options, but not so many that you don’t know what to do with them.

Make sure
Try not to stockpile more rewards than you plan to redeem in the next year. Image courtesy of Shutterstock.

If you have more than you need for the next year, don’t go burning your rewards just to get rid of them. Devaluations are inevitable and sometimes unpredictable, but you’ll usually get at least a few months of warning before large-scale program changes take effect. There’s no rush to redeem unless another devaluation is imminent.

Finally, some points and miles are more susceptible to devaluation than others. I’m fairly comfortable stockpiling in programs like Chase Ultimate Rewards or Amex Membership Rewards because transferable points are more likely to retain value. Those programs may implement their own negative changes from time to time, but overall they’re less risky than individual airline and hotel programs.

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

Featured image courtesy of Shutterstock.

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.

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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 on Purchases
Regular APR
16.49% - 23.49% Variable
Annual Fee
Introductory Annual Fee of $0 the first year, then $95
Balance Transfer Fee
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.