Sunday morning. At my usual spot at Panera bread down the street. It was a great Saturday night with the University of Michigan beating Syracuse and punching the ticket to the NCAA Tournament final on Monday against Louisville. But before I got here I decided to pre authorize a check in my wife’s Bluebird account written to me and then I deposited to our joint checking account using the Bank of America Android app. And then it hit me!
This is really the best of times in earning miles and points. We have Vanilla Reload cards in plenty of CVS drug stores. Yes, sometimes you get the odd cashier or manager who refuses to let you buy them with a miles/points earning credit card. And some people still abuse this by buying too many cards at a time and then some true junkies hide the cards in ever more innovative spots (behind Facebook gift cards, really?). We can then load the Bluebird accounts up to $5k per month and pay our credit card bills with it. Or pay ourselves or get cash from ATMs. Or go to WalMart and do more things there. There are still plenty of other prepaid cards, from Paypal to AMEX prepaid to Target AMEX and a dizzying array of Vanilla type cards on the shelves. We now have regular gift cards that come with a PIN with detailed instructions and pics/arrows! We even have some debit cards still around that work like magic (Sun Trust Delta, my vanilla debit). Mortgage payments, check! Student loan payments, check! Estimated tax payments, check! We can pay the odd vendor who does not accept credit cards with a Bluebird check or have Bluebird send a check directly…the floodgates are open! Amazon’s Bezos strangely still allows us to use Amazon Payments for $1k per month! You can up the spening in a big way by buying and selling stuff if you are into that kind of thing (and can keep track of all of it!). It is not the amazing 5x Office Depot/VR/BB angle but still, my point is, the issue of meeting minimum spend requirements on a new credit card is NO LONGER an issue! If you have the time you can also say that hitting the spend requirements on several cards to earn MQMs (Delta cards), companion tickets (British Airways Visa), elite levels (Hilton Diamond with $40k in Hilton Amex Surpass), several spending threshold amounts in several cards, etc is also NO LONGER an issue! I think the only way to spend money (manufactured or not) and not earn miles/points is to invest in a 401k through your employer! (Anyone?) It is a miles/points earning nirvana. It is how you get Frequent Miler to earn 1 million points in a single month and not sweat about it.
You have started seeing the popularity of this hobby continue to increase. You get events like Frequent Traveler University and Chicago Seminars selling out in record times! Bloggers continue to come out and pretty much recycling the same information between them. From what I know the two main forums of our hobby, Flyertalk and Milepoint, continue to do well. Some true gems/hacks have been discovered in these boards and then given out to the masses by one of the bloggers. Yes blogs kill deals and there is not much we can do about it; it is…reality in 2013.
But, let me turn the tables here, is this good for us? Let me argue that it is NOT! Why? Just way too many miles/points floating out there and balances keep going up and up and up. We have all started seeing the effects lately with the continued and macabre (yes Hilton DisHonors!) devaluations. The fees associated with burning activities also continue to go up (from bag fees, fuel surcharges, change ticket fees, miles redeposit fees, etc) and the main sweet spot awards are slowly being eliminated one by one. And don’t get me started about award booking. With airline loads continuing to go up (mergers will do that!) it is getting harder that you now have several award booking services to help you out with them for a small fee of course! With Delta going revenue based I expect all other airlines to follow along because simply the current model is unsustainable. You can forget the caviar in First Class for around 100k miles soon. One of my pet peeves in this hobby was seeing people mention “I went to the Maldives for free”. No you didn’t. You may have spent a fraction of what others did but it was not free and I argue it cost you more than any other times in previous years. And nobody ever mentions the cost of time to do this hobby right! There is no free lunch.
It is getting to a point that cash back cards & using Priceline/Hotwire and/or other cash rebates sites are looking to be a better deal more and more. For non road warriors, the elite status game is a guaranteed money maker for the airlines and you are a sucker. If you can’t stand coach in a domestic trip maybe you have other issues; blowing money on a mileage run and ignoring your loved ones so you can make Platinum at a cost of several thousand dollars is absurd…been there, done that, you are just full of the Elite Slut Syndrome, please seek help:-)
Ok, what was my point? Way too easy earning by more and more people leads to scary devaluations and total rethink of these loyalty programs. No, I am no Chris Elliott! There is still value in this hobby of course but the game is not as juicy as it used to be. The compensating factor is, again, the easy scoring of miles/points. When the music stops, it stops suddenly (Office Depot anyone?) So, burn while you got em folks! The only constants are more devaluations and more fees!
I now go to my second cup of Hazelnut coffee at Panera (free refills and wifi). I do have four freebies on my Panera loyalty card by the way…yes Virginia, I am a miles/points junkie!
Next stop CVS, hiya!
Yes, all the US programs will eventually move to a revenue model. I hope. And then hopefully our points outside of the states will be worth something.
My post today was definitely US centric!
Pretty sure you mean to be linking to FTU, not FFU when talking about the evens. FFU is just a blog, not an event.
Oops, thanks for the catch! Fixed now.
I probably made a little under 1 million miles total across various programs in the past year. Record year for me. So far, delighted with the great ease and value I got each time I used up the miles.
Southwest seems to always offer amazing deals Seattle-California-Seattle, with each one way typically costing me 5k miles or less. Went to San Jose, San Francisco and San Diego in the past year because of this.
Another excellent use has been Chase Ultimate Rewards car rentals. Besides offering excellent competitive daily rates (thanks to MMS for his popular post on this a few months ago), Chase counts each mile as 1.5 cents when reimbursed for car rentals!
I suppose if all these rewards become more expensive, there will always be the option of getting electronics and other products at bad redemption rates, which will still be worth it if gathering miles remains so easy.
Yes still a lot of value of course. Key part of your sentence is this:
“if gathering miles remains so easy.”
Big emphasis on IF.
Bluebird is here to stay but we are not sure if it is making any money yet. CVS should drop the VR at some point when they get a better software to handle it as well as Walgreens did;-)
Too many miles chasing too few seats makes sense in a capacity-controlled airline award context. But for hotel programs that are already effectively revenue-based, for the HHonors analysis above, the logic doesn’t hold together. There isn’t a shortage of standard award rooms, and the hotel is already buying the room nights for less than their redemption cost in almost all circumstances.
Don’t excuse Hilton’s devaluation as though it follows logically from a previous chain of events. It was pure, gratuitous, unadulterated greed and sense of an opportunity to rip off Hilton customers who were stuck with big points balances. And they deserve all the shame and ridicule they can get for it.
Yes, Dishonors is a better name. They feel they can get away with this crap, as does Delta abusing their members with the horrendous award search engine. So…we need to let them know we can hurt them in their pocket. But…deep down, I think they are making the right business decision and we know it:-) Time will tell but trend is not looking good on the burning side. As previos reader commented, as long as earning remains easy we will be fine:-)
While Im not happy about the devaluation Hilton couldnt allow the low redemption relative to the high end hotel rooms. They cant be profitable giving away $800 and up Hotel rooms for 60k pts.
Yes the Hilton devaluation was not a surprise at all. What was a surprise was the scale of it! Still a good value for lower categories and a horrible value for aspirational properties, especially when you compare it to pre-March 28 rates;-)
So true about the “NOT free” aspect. So many people gloss over the opportunity costs. For example, if you used Ink to buy $200 GCs + $6.95 fee at OD, loaded to BB at WM for “free”, then cashed out via BB for “free”, what is your true cost? Many would claim 0.2 cents, but this is just the out of pocket. It ignores the opportunity costs. The first opportunity cost to consider is the cash back you gave up by not using a 5% cash back card at office supply (AMEX Simply Cash). If you do this you will see the cost per UR increases to 1 cent, and this doesn’t include the opportunity costs of loading and cashing out via BB (which are limited so not necessarily “free”). Of course, AMEX Simply Cash has a lower spend cap than Ink on office supply, which lowers the implied opportunity cost, but you get the idea… If you earn miles or points via manufactured spend, you need to look at the opportunity costs. At a minimum, compare to the cash back you otherwise could have generated with a 2-6% CB card, and don’t forget about the other opportunity costs such as BB limits, AMEX FR, Citi closure, Chase adverse action, etc.
Yeah, I agree. It still gets me when others say “I went to ______ for free”!
Oops, typo. That 0.2 cents should have been 0.67 cents: $6.95 / 1035 UR = .0067