Should I Buy Points and Miles During Discount Promotions?
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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.
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.
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