Credit card rewards programs change all the time, but if you keep on top of things and are flexible, you can cash in those miles or rewards before you lose them.
Dear Cashing In,
I see that Citi is going to increase the amount of points needed to cash in a plane ticket. How can I avoid having my credit card issuer reduce the value of my rewards? Are there any laws that protect rewards savers from devaluation of their points? — Craig
Citi made a change to its Thank You Rewards program recently, and that wasn’t the only program Citi changed. For instance, CitiMiles recently issued this notice to its cardholders:
At the same time when announcing this new transaction fee, the minimum number of miles for travel rewards increased to 2,500 CitiMiles for each round-trip ticket, which means that trips with less than 2,500 miles between departure and destination will use a minimum of 2,500 CitiMiles — changing the value cardholders can get from their rewards.
Citi cardholders aren’t alone. The Delta Airlines SkyMiles program recently dropped its popular “Always Double Miles” on eligible everyday purchases.
No rewards protection laws on the books
There are no laws to protect reward savers from point devaluation. In the case of airline frequent flier programs and their credit card-based programs, attempts to regulate them years ago through the National Association of Attorneys General (NAAG) failed as it kicked the regulatory process back to Congress, which pretty much gave airlines immunity from these types of laws. With Congress responsible, it is highly unlikely — no matter the extent of government involvement in private enterprise — that any protective measures would be put into place for what is commonly referred to as “grandfathered” changes. This would mean that while these programs have a right to change their requirements at any time, any loyalty currency earned before any change would have to continue at the “old” rules and redemption. While very high-minded, it is likely that such a complicated system would lead to ending the programs altogether rather than protecting the cardholder.
Because of the lack of protection, it comes down to members keeping more informed and more savvy about maximizing their rewards before changes to their rewards programs take place.
But before we look at how to protect yourself, let’s be a little fair. While we don’t like change, it is clear that these programs have done nothing against what they established about the rules up front. While I’m not big on the most recent Citi Thank You Rewards changes, if we look at the fine print– fine print that we agreed to when we enrolled — we would notice this caveat: “Thank You Network or any portion thereof may be revised or terminated with 30 days prior written notice.”
The truth is that when this program changed, Citi did give its members 30 days notice. That is why I stress the need to be flexible. For example, had you been given the 30 days notice, you could have quickly reserved a future reward trip. Unfortunately, members don’t always read the materials regarding program changes, and often stumble upon them just days before the actual change (when all hope of planning for the future is lost).
Don’t be the last to know about program changes
This is where using the Internet can help tremendously. With every rewards program, there are online topics, threads or communities that spring up to alert members to program changes, and people quickly form strategies on how to best take advantage of the situation.
Here’s an example: Members of the popular FlyerTalk.com travel community are pretty vigilant about the Thank You Rewards program, and a thread was started in early January to offer advice and strategy for the change that took place March 1. The thread now has nearly 1,500 different comments and has been viewed nearly 75,000 times. Members “subscribe” to that thread or the forum and get updates as new information and advice is posted. If flexible, one would have figured out how to book a ticket to use in the future, redeeming at the current reward prices before the changes took place.
Coalition rewards programs protect your points
Another way to protect yourself is in your choice of credit card reward programs. With programs offered by Citi, Capital One and others, when a change is put forth in the rewards, there really are few options. However, if you were to look at what is sometimes referred to as “coalition”” rewards programs — like those sponsored by American Express Membership Rewards or Diners Club Rewards — what you’ll find is that changes come from the partners, rarely from the program itself.
With coalition membership rewards programs, your rewards are protected since they have any number of airline and other merchandise partners, which don’t all change at the same time. For instance, maybe Delta changed some of its reward levels (as they have), but you would still have the ability to use Continental Airlines (which did not change its awards at the same time as Delta) or even Frontier, JetBlue or Southwest.
Having a number of other program partners like this helps insulate you from single changes, as can happen with Citi, Capital One and even the Delta SkyMiles credit card. In addition, these types of programs allow you to hold your points in a main account so that you can selectively move them to a specific reward program when the timing is best. Plus, various airline partners of a membership reward program have been known to offer transfer bonuses of up to 50 percent, meaning you’re able to increase the value of your rewards. Or various partners will at times offer special travel rewards at a discount price, allowing you to move just the number of points you need into that particular partner for redemption, and leaving all your other points available for other promotional offers.
I hope this helps. To recap: 1) Use the Internet to track changes so you don’t miss the news, and take advantage of communal advice on the strategies of any change; and 2) Review from time to time which program you belong to, and whether it has enough flexibility among its reward offers to not pin you down when changes come about.
See related: How to find the best airline rewards bonus miles deal, Debunking myths about frequent flier programs, How the IRS treats frequent flier credit card rewards