Frances Meredith of Raleigh, North Carolina, has used an American Airlines-branded credit card for everything from groceries to medical bills during the pandemic, racking up points with nowhere to spend them. It meant she had a lot to redeem when her family of four decided it was time for a winter getaway in Miami.
Although the seats cost 50,000 points each, Meredith, an internist, was happy to save money by using her rewards balance.
“It was easy. There were plenty of seats,” she said.
As travelers return to the skies, many, like Meredith, have amassed larger-than-usual totals in airline and credit card rewards programs. And they start spending them. Several factors now make time to cash in points.
More flexibility. Flights booked with points on major US carriers are fully refundable. This means that if you have to cancel the trip, all your points and any associated fees will be returned to you without any penalty. Tickets purchased with cash, on the other hand, usually provide credit for a future flight.
Better now than later. Many travelers are sitting on bigger points balances than ever before, both because they haven’t redeemed their points and because they’ve added to the pile over the past two years with card purchases. credit associated with airline loyalty accounts. According to a study by ValuePenguin and OnPoint Loyalty, the five largest airline loyalty programs – SkyMiles from Delta Air Lines, AAdvantage from American Airlines, MileagePlus from United Airlines, Rapid Rewards from Southwest Airlines and TrueBlue from JetBlue – have ended 2020 with $27.5 billion in liabilities, up $2.9 billion from 2019. Customers earned about half as many points in 2020 as the previous year and only redeemed 10% of their available points compared to 30% the previous year.
The most important reason to use points now is that they might have less purchasing power over the next few years, said Jamie Larounis, who writes about loyalty programs on his travel website, the Forward. Cabin. Airline and hotel points are like currencies held by businesses, and those businesses can value their currencies any way they want by changing the redemption cost. Helane Becker, airline analyst at investment bank Cowen, said airlines had devalued points several times over the past few years and she expects the practice to continue.
More places to go. Travel itself is now less daunting, with more countries eliminating COVID-19 testing for vaccinated passengers. London, one of the most popular destinations for American travelers, dropped its testing requirements on February 11. Thailand, Vietnam, Australia and other countries are opening up to tourists.
Take the time to research the best deal. Redeeming points to capture the most value can take some research. For example, at the time of this writing, a business class flight on Delta from New York to Paris costs 320,000 SkyMiles points on a randomly selected day in March, but a similar flight on Air France only costs 75,000 miles more. $213 with Air France’s Flying Blue Loyalty Program. American Express, Citi, Chase and Capital One have partnerships with Air France, so their customers with loyalty points could transfer them to Air France, which costs only a fraction of the Delta ticket.