Fighting Travel Rewards Inflation in the Miles and Points Game

The inflation we have experienced post-COVID is not limited to groceries, housing, and other routine expenses. There has also been inflation in travel rewards as airlines want more miles for free flights and hotel chains want more points for free rooms than in the past. Any devaluation of miles and points that you have accumulated is unwelcome, but there are ways to fight back.

1. The first strategy is to take advantage of new credit card offerings and harvest sign-up bonuses. While there has been inflation in what airlines and hotel chains want for free travel, there has also been inflation in the sign-up bonuses offered for new cardholders. As an example, a Delta gold card I picked up about 12 years ago offered a 25,000 SkyMile bonus after meeting a spending threshold. The current offer on a Delta SkyMiles gold card is 65,000 SkyMiles. The current bonus will get you a free domestic trip (if not more) just as that 25,000-mile bonus would get you a free domestic trip. If you have gone years without taking advantage of a sign-up bonus, you are missing out.
2. A second strategy for beating inflation is to make sure you are taking advantage of spending categories that offer the richest bonuses. Just as there has been inflation in sign-up bonuses, there has been inflation in bonuses for categories like dining, groceries, gas and other routine purchases. A decade ago, an airline card might have offered two miles per dollar spent with the airline and one mile per dollar spent for all other purchases. Some currently offered cards have bonuses of 3X, 4X, and even 5X per dollar spent which can greatly accelerate your point and mile accumulation. These high bonuses can be found on cards with quarterly rotating bonuses but also cards that offer extra points all year.
3. Diversifying your points and miles “portfolio” is an important third strategy. Just as a diverse investment portfolio for retirement can reduce risk, you do not want to accumulate mileage or points in just one program. A great way to diversify is with flexible points, which are points offered by major card issuers that you can transfer into the miles or points of different programs. With this flexibility, if an airline or hotel program devalues its miles/points, you can use your points elsewhere to get the best value.
4. Your points and miles will never be worth more than they are in the present so, a fourth hedge against travel rewards inflation is to simply earn and burn your points. People have told me of plans to take a major trip several years from now that will require hundreds of thousands of miles – perhaps they want to take their family to a distant and exotic location and fly business class. The problem with this hoarding approach is that, by the time they are ready to book their travel, the airline will have increased the miles needed for this dream trip.

The Travel Rewards Optimizer (TRO) plans takes these and other factors into consideration so that you can get more travel out of credit card loyalty programs while lowering your exposure to travel rewards inflation. The TRO plans provide guidance for the credit card offerings that will marry your routine spending patterns to your specific travel goals. And, because our advice includes strategies for diversification and is geared to meeting shorter term (one year) travel goals, we help you avoid travel rewards inflation so you can focus on enjoying your vacations.