*NOTE: This post was originally written before the recent United Airlines’ devaluation. For more information on that news, you can click here.*
Man, there have been some great airline mileage promotions recently. Between bonus miles earned on purchased, shared or transferred miles to earning bonus miles when flying select routes, airlines have been giving you more and more reasons to fly their metal and accrue more miles. Combine that with the huge bonuses on branded credit card signups and you’ll have more miles and points than you’ll know what to do with. But is hoarding a ton of airline miles really a good idea?
If there’s anything that we have learned about airline frequent flier miles is that as easy as the airlines giveth, they can just as easily taketh away. Well, not literally take away, but they can devalue their programs to where they might as well have taken away your miles. And the shitty part is that oftentimes, the devaluations can come with little or no notice at all.
Remember that American Airlines scare that happened last month? Lucky first broke the news here. All of a sudden, it was discovered that American Airlines was adding fuel surcharges to all their international award redemption. They were already charging fuel surcharges on award redemptions for British Airways and Iberia, but then out of nowhere, fuel surcharges were added to all international award flights, even flights on American Airlines.
Fortunately though, this scare turned out to be an American Airlines IT “computer glitch” and the fuel surcharges were immediately refunded. This scare caused such an uproar on Twitter that American Airlines had to come out with a statement acknowledging the error and confirmed that no additional fuel surcharges were being added to international award flights. But what’s to say American Airlines can’t? Or won’t in the future? All their One World partner airlines already do. It would only make sense that American Airlines will also (eventually).
And let’s not even talk about Delta and how much they have devalued their program already. It’s so bad that frequent fliers of their own program have dubbed their SkyMiles to be “Sky Pesos.” Starting in June 1, 2014, the award redemption rate to redeem a saver Business Class flight from the US to Europe goes from 100,000 SkyMiles to 125,000 SkyMiles. That’s the same amount of miles required on American Airlines to travel from the US to Europe in First Class! What about to Asia? Don’t even think about it. It’s gonna cost you 140,000 SkyMiles for a saver Business Class seat. Compare that to United and you’ll get a First Class ticket to North Asia for the same price. See a pattern here?
So what’s a frequent flyer to do? My advice is to earn and burn. Earn as much as you can and burn them and soon as you have enough for a trip that you have planned. Now, I’m not saying just burn them recklessly. I’m saying, don’t hold onto them for no reason. Have enough for a trip to Europe but no immediate plans till next summer? No problem, most airlines release award seats up to a year in advance.
But here is my disclaimer about holding onto miles. It’s always a good thing to have some “emergency miles” in the bank. For example, if you have to fly cross-country last minute for a family emergency, a paid flight could cost you thousands of dollars. But that same flight could cost you under $100 in taxes and fees for a last minute award redemption instead. But other than that, I don’t recommend having more miles in the bank than you could possibly use within the next year.
What about those great promotions for buying award miles? US Air was offering up to a 100% bonus for purchased award miles. That’s a great deal but only if you need to “top off” your account, just enough to get to your next award redemption. Are you short 10,000 miles to get to your next redemption? Go for it. Need another 15,000 to go from Business Class to First? That’s a no brainer. The cost you pay for the additional miles will be significantly less than the cost difference between a paid Business Class seat and a First Class seat on that same itinerary.
For those of you that have American Express Membership Rewards, Starwood Preferred, or Chase Ultimate Rewards Points, my recommendation is to keep those points there. There’s no rush to transfer those points to your preferred airline for no reason. If you suddenly develop plans, those points can usually be transferred to any airline instantly or some cases up to 24 hours (SPG may take a little longer). That’s nothing. My thought is keep those points there just in case your preferred airline decides to devalue their frequent flyer program and now becomes your not so favorite airline. With the many airline transfer partners for these programs, it’s good to keep your options open.