How Can I Protect My Points and Miles from Devaluation?

May 25, 2014

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Update: Some offers mentioned below are no longer available. View the current offers here.

A couple weeks ago American Airlines made some negative changes to their AAdvantage program overnight, including getting rid of their round-the-world Explorer awards and modifying really valuable stopover policies.

TPG reader Martin sent me a Facebook message and he is mad:

“I own my own business and make most of my purchases on my Citi AAdvantage Visa Signature card. I went to redeem miles the other day and they have devalued by almost 50%! It used to cost 100,000 for First Class/Anytime on AA, and now that same ticket is 180,000 miles – this is unbelievable! Have you noticed this devaluation, too, and do you have any tips?”

I’ve definitely noticed this, too, Martin, after American introduced new tiers for peak awards – and I’m not happy about it, either. The thing is, you shouldn’t be putting all of your miles in one basket. I know some people like to have a narrow focus and don’t want to think about splitting up their loyalty, but at the end of the day devaluations and negative changes are going to happen, and if you only have one mileage currency, you’re setting yourself up to get hit hard. Unfortunately in Martin’s case, that’s what’s happened.

My recommendation is to use a credit card that offers you more return for your business spend. For example, the Starwood Preferred Guest business credit card from American Express offers a better transfer ratio to American Airlines. The Citi AAdvantage card earns 1 AAdvantage mile per dollar spent on most purchases. With the SPG Amex business Card you’d earn one point per dollar, but you can transfer 20,000 Starpoints and get 25,000 American Airlines miles, so the Starwood card is better even if you just want to accrue AAdvantage miles.

In addition, you can transfer those SPG points to over 30 other airlines in case American doesn’t have the award you want or if they’re going to charge you an arm and a leg for it. Of course, you can also redeem Starpoints at Starwood hotels, which offers great cash and points options for certain redemptions. In general, it’s important to diversify. You can improve your options and your earning ratio by generating much better, more flexible points in programs like Starwood, Chase Ultimate Rewards, or Amex Membership Rewards. There are other business cards out there that I’ve written extensively about, so do some research and see which one best suits your needs.

If you have other questions, message me on Facebook or post on my wallTweet me @ThePointsGuy, or email me at info@thepointsguy.com.

Editorial Disclaimer: Opinions expressed here are the 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.