Why You Need to Diversify Your Points & Miles in 2021
best airline loyalty program

Why You Need to Diversify Your Points & Miles in 2021

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For more information check out our Advertising Disclosure.

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 further. Diversifying financial investments is equally 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 great … 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. Or when that airline decides to suddenly start charging a boatload more miles for the flights you want.

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 2021.

 

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. And already in 2021, we’ve been reminded of that.

On New Years Day, we saw Virgin Atlantic end a massive sweet spot for booking Delta flights. Without any notice, they overhauled their award chart be based on the distance of many Delta flights. And that means it now costs almost twice as many miles (or more) to fly Delta One suite from the U.S. to Tokyo (HND) as just a few weeks ago. Thankfully, Delta flights to Europe have escaped this massive devaluation.
 

delta one suite 

Delta itself did something similar in late 2020 when it jacked up award rates to book partner airlines like Virgin Atlantic, Air France, KLM, and Korean Air by as much as 40% overnight – again with no warning. A one-way economy award from the U.S. to Europe jumped from 25,000 SkyMiles to 35,000 SkyMiles. Flying business class with Air France or KLM? That went from 75,000 miles each way to 95,000 SkyMiles overnight.
 

air france skymiles redemption 

The list of devaluations goes on and on over time. Way back in 2016, we saw a massive Alaska Airlines devaluation drastically raised the cost of booking Emirates business and first-class awards overnight. In 2019, Singapore Airlines raised award rates for first and business class.

In the hotel world, Marriott and other hotel chains are rolling out peak and off-peak pricing models. This means it will ultimately cost more (or, if you’re lucky, fewer) points to book a night depending on the location and time of year.

Those are just a few of hundreds of examples over the years. If all your eggs are in one basket, these devaluations can be crushing. Travelers have hoarded their miles during the pandemic – and credit card companies have issued a wave of huge new bonuses in the meantime. That’s a recipe for even more devaluations when travel resumes in 2021 or 2022.

But if you can build up points in several different programs, these devaluations 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, the United Explorer Card, or the Citi AAdvantage Platinum Select World Elite Mastercard 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.

Read more: Why You Shouldn’t Be Putting Everything on Your Airline Card

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 other 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 Ultimate Rewards 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 an example below. 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 Card 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 125,000-point bonus on the Platinum Card from American Express via CardMatch, 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

Leave a Reply

Your email address will not be published. Required fields are marked *