Why You Need to Diversify Your Points & Miles Earning in 2020
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Why You Need to Diversify Your Points & Miles Earning in 2020

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Points and miles are a lot like currencies around the world. Just as $100,000 U.S. dollars aren’t equal to 100,000 Japanese yen, 100,000 Delta SkyMiles are not equal to 100,000 Hilton Honors points.

But let’s take the analogy a bit farther. Diversifying financial investments is important – it’s not wise to put your entire life savings into one stock. If that company went belly up or didn’t perform particularly well, your finances will suffer.

The same is true with points and miles. If you focus on earning points with just one airline or hotel program, you’re locked in. That can be nice at times … until a great deal pops up with an airline where you don’t have miles. Or when you need to fly a different airline. Or stay somewhere where your favorite hotel chain doesn’t have a location.

When that happens, all the Delta SkyMiles or World of Hyatt points in the world can’t help you. That’s why it’s so critical to branch out and start earning different points and miles – sooner rather than later. We’ll walk through the top three reasons to underscore why you need to diversify in 2020.

 

Points and Miles Get Less Valuable

Death, taxes, and reward program devaluations.

These are simply certainties in life. With airline and hotel programs, it happens over and over again – often without much notice. We saw it in 2016, when a massive Alaska Airlines devaluation drastically raised the cost of booking Emirates business and first class awards overnight. We saw it again last year when Singapore Airlines raised award rates for first and business class.
 

diversify points 

In the hotel world, Marriott just recently announced a huge devaluation where 22% of its properties worldwide will be increasing award rates. If you had all of your points in the Marriott basket, this one will certainly sting.

Those are just three of hundreds of examples over the years. If all your eggs are in one basket, these devaluations can be crushing. If you only have Delta SkyMiles, for example, a big devaluation or exorbitantly expensive award flight can be painful if using SkyMiles is your only option.

If you can build up points in several different programs, they sting less. You can use your points more judiciously when it makes the most sense to maximize their value.

 

Prioritize Earning Flexible Points

Co-branded airline credit cards like the Delta SkyMiles Gold American Express Card or the United Explorer Card can offer a lot of value for travelers. They offer free checked luggage, priority boarding, and large welcome offer milage bonuses from time to time. Keeping one of these cards in your wallet for your preferred airline is almost always worth it.

But here’s the thing: The average traveler shouldn’t be using a co-branded credit card for their everyday spending, or focusing on only one airline program. While it may seem smart to keep adding to your balance of SkyMiles, United miles or American Airlines AAdvantage miles, you can do much better.

More often than not, you’ll be better served by leaning more heavily on a flexible points credit card like the Chase Sapphire Preferred Card, the Capital One Venture Rewards Credit Card or even the American Express Gold card.
 

Sapphire Preferred vs Capital One Venture 

By using a card that earns flexible points, you keep your options open. Not only can you use your points to fly Delta, for example, but you can also use them to fly on almost any airline, or even use them for hotel stays.

It’s one of the main reasons we love Chase Ultimate Rewards points – possibly the best of all these flexible points programs. You can use them to book flights on almost any airline through the Chase travel portal. And when you do, your points will be worth 25% to 50% more, depending on which version of the card you hold. But you can also use them for one of the many airline and hotel transfer partners.

A sum of 60,000 Delta SkyMiles is stuck with Delta. But a sum of 60,000 Chase points from the Chase Sapphire Preferred is worth at least $750 on almost any airline – or hotel or even cruise company. It’s an unparalleled level of versatility.
 

Use the Best Part of Each Program

More and more, airline and hotel programs are using dynamic award pricing.

While some airlines still use an award chart to set mileage rates for a given flight, it’s all over the map with dynamic award pricing. Rates can swing wildly from day to day, based on the cash price, demand, seasonality, and more.

Read more on how Delta SkyMiles work – and how to make them work for you.

But by diversifying your points and miles, you can get around these hurdles and cherry-pick the best way to book whatever trip you’re taking – often for far fewer miles. One of our favorite examples is using Air France/KLM’s Flying Blue program to book round-trip flights to Hawaii on Delta.

Much like Delta itself, FlyingBlue doesn’t publish an award chart. And just as with Delta SkyMiles, that means rates when using FlyingBlue miles can be all over the place. But you can use FlyingBlue miles to book seats on a Delta flight. And when you do that, it’s much more predictable. And cheap.

Delta flights to Hawaii start at just 17,500 FlyingBlue miles each way. That means you can fly from anywhere in the continental U.S. to the Hawaiian islands and back for only 35,000 miles.

Let’s look at a recent example. As you can see, a round trip ticket to Honolulu (HNL) out of New York (JFK) cost 77,500 Delta SkyMiles – give or take a few thousand SkyMiles.
 

Hawaii flights 

But thanks to their partnership as a part of the SkyTeam airline alliance, you can book these exact same flights through Air France/KLM for only 35,000 miles roundtrip.
 

Hawaii flights New York 

And those rates aren’t just good from larger metropolitan areas. Even from airports like Fargo (FAR) in North Dakota, you can still find flights for just 35,000 total.
 

diversify points 

And although you’ll be flying Delta, Delta SkyMiles won’t help you here. What you need are some FlyingBlue miles. And once again, having a diverse balance of points and miles can help you.

You can transfer credit card points to a FlyingBlue account from ChaseAmerican Express, Citi, and Capital One. You can even transfer a stash of Marriott Bonvoy points to become FlyingBlue miles.

The 60,000-point welcome bonus on the Chase Sapphire Preferred after spending $4,000 within three months is nearly enough to get two round-trip tickets to Hawaii. Or if you’re eligible for the outstanding 100,000-point bonus on the Platinum Card from American Express, you’d have enough for three round-trip tickets after spending $5,000 within three months!

 

Bottom Line

Having points in flexible programs is the best way to protect yourself against the inevitable devaluations of loyalty programs – and score the best deals.

Not only should you diversify your points into the flexible points programs, but it’s a great idea to also start building up miles with the three major U.S. airlines: Delta, United, and American.

Keeping your points and miles accounts diversified keeps your award travel options open. And that’s the key to jumping on the best deals and redemptions while avoiding the bad ones.

 

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

2 Responses

  • This sounded too good to be true so I tried some test bookings from BZN (Montana) to LIH. Nothing even going day by day in January 2021 on either KLM or Air France. Then tried to simplify using SEA as a major hub. Same result. Is there a step by step procedure and does it make a difference if you use KLM or Air France? Thanks

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