How to react when your reward program changes
Points and miles tend to lose value over time. Here's how you can guard against that trend.
Ask a question.
Dear Cashing In,
I read that British Airways is again making its frequent flier miles harder to use. It seems like this is a trend, that airlines and credit card companies are constantly changing their programs to make miles harder to use and less valuable. How do we stop this from happening? -- Simon
It might not be possible to halt this trend. It's a little bit like inflation. Over time, the value of a dollar erodes. It doesn't buy as much as it used to. So it is with points and miles.
For several years, the British Airways program, called Avios, has been a valuable program for Americans who like travel rewards, because you can use a small number of miles for U.S. tickets on American Airlines. The number of Avios you need depends on the flight's distance so, for instance, you can fly between New York's LaGuardia Airport and Detroit for just 4,500 Avios each way. The same flight using American miles would cost at least 12,500 miles each way.
Although you can accumulate Avios by flying on British Airways or one of its partner airlines, there are other options, such as using the Chase British Airways Visa Signature card (annual fee: $95 a year), or by transferring them from reward programs linked to other cards, including Chase Ultimate Rewards, American Express Membership Rewards and the Starwood Preferred Guest program.
However, in October, British Airways said it is raising the minimum number of Avios needed to book a flight in North America from 4,500 to 7,500, effective Feb. 2, 2016. This devaluation follows a move in April, when British Airways hiked the number of Avios required for first- and business-class travel.
Truth be told, the British Airways changes are just one of several examples of cards or reward programs becoming less valuable:
- In September, Air Canada altered its award chart, requiring more miles for coach flights to Australia and business- and first-class tickets to Europe and southern South America, among other changes.
- In early 2015, Delta eliminated its award charts altogether, saying customers would have to search for flights on specific days to find out how many miles they would cost. The airline says that allows it to show more accurate information, but it also makes planning difficult.
- In June, holders of the Club Carlson Visa lost a perk that offered one free hotel night when redeeming awards. It was replaced by one free night per year.
- In July, the Barclaycard Arrival and Arrival Plus cards reduced their bonuses for redemptions and increased the minimum number of points required per redemption.
Unfortunately, this is the way things go with travel rewards programs. Companies are making changes all the time. Some of the best strategies you can use to minimize the damage are:
- Diversify. Don't hold all your rewards in a single program.
- Don't hoard. Points and miles are apt to become less valuable over time, so spend them while you have them. (They also might expire -- another good reason to use them sooner rather than later.)
- Use them when programs change. Typically, a rewards program will give a few months' notice when it alters its rewards chart or eliminates a perk. That means you'll probably have time to react and secure the best use of your points.
See related: Frequent flier miles sometimes contain hidden tax
Meet CreditCards.com's reader Q&A experts
Does a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
- Will I lose elite status if I transfer my airline card's balance? – An airline credit card holder won't lose miles earned toward elite status if the card's balance is transferred to a lower interest credit card ...
- When spending big, watch for category bonus limits – If you're planning on spending a lot on a card in a certain category, make sure you know the limit to what you can earn so you can maximize your rewards ...
- 5 times you should call your bank about your card – If you need certain services done with your card or have questions redeeming your rewards, calling your bank might be best ...