It’s easy to think of points and miles as a variant of Monopoly money. They can be easy to throw around and spend nonchalantly.
To other people, though, travel rewards can be easy to hoard. They are a form of currency, after all, and we can become as tight-fisted with our reservoir of points as we are with our hard-earned savings account balances.
However, there is one very important distinction between travel rewards and cash: Unlike most true currencies, which can appreciate if invested wisely, your points and miles are almost guaranteed to lose value over time.
In other words, points and miles are not a great long-term investment. The sooner you can spend them after earning them, the more value you’ll likely receive.
Let’s examine why carrying large balances of points and miles without a plan to use them is a bad strategy. This will help you avoid setting yourself up for disappointment, heartache and a possible loss in net (rewards) worth.
Related: Getting started with points, miles and credit cards to travel
Points and miles devaluations
In recent years, we’ve seen many egregious devaluations from some of our favorite loyalty programs. The general mantra is that transferable rewards are slightly less susceptible to devaluations than rewards in a frequent flyer or hotel program.
