Now is probably the time to cash them in.
Given massive travel slowdown due to the coronavirus pandemic, frequent flyer programs, just like travelers, are waiting in limbo. While virtually every major airline has extended elite status benefits for its loyal customers, as well as reduced the requirements to achieve elite status this year, those enrolled in frequent flyer programs are likely sitting on a mountain of award miles. If you’re unsure of what’s going on with all your miles in your account—and what you should do with them now that travel is, if you’ll forgive the pun, up in the air—you’re not alone.
The good news for consumers is that not much is really going to change for them in the short term. Your miles will just sit in your account until their expiration dates, which most airlines have pushed back significantly. (And some airline frequent flyer programs, like Delta’s SkyMiles and JetBlue’s TrueBlue, don’t even have expiration dates for their award miles, regardless of the pandemic.)
Your miles will just sit in your account until their expiration dates, which most airlines have pushed back significantly.
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Most of the action regarding miles is actually going on behind the scenes, namely in the fact that cash-strapped airlines are selling miles to banks to make quick money. “Banks buying points from airlines creates a win-win scenario for them both,” says Sara Rathner, travel and credit cards expert at NerdWallet. “Airlines get a huge sum of cash, and banks turn those points into generous sign-up bonuses to attract and retain credit cardholders.”
The bigger issue is the risk of inflation. With millions of points flooding the market through credit card partnerships, it’s likely that airlines will have to devalue them to ensure profitability. It’s happened before—most recently after the 2008 financial crisis. But Alex Miller, founder and CEO of UpgradedPoints.com, doesn’t think it’ll be a catastrophic devaluation for elite flyers—at least not in the near future. “While airlines certainly will contemplate devaluing mileage currencies, I don’t think you’ll see as much of that as you think, as airlines need to rebuild trust amongst consumers,” he says. “That said, I think a devaluation is certainly in the cards, just not immediately.”
While the pandemic could cause a bigger devaluation than might otherwise have occurred under normal circumstances, remember that devaluations happen regularly. “In the last few years we’ve seen quite a few painful devaluations to many popular programs,” says Sudeep Shah, CEO of Dallas-based travel agency Travel King International. “Your points and miles are guaranteed to lose value in the long run, and there isn’t much you can do to stop it.”
It’s an important reminder that instead of stockpiling your points for years on end, it’s best to earn and burn to make sure you’re getting some kind of return on your investment. “There’s always a risk of an airline devaluing its points,” says Rathburn. “That international flight that costs 50,000 miles one day may cost 65,000 miles the next.”
So what should you do with your miles right now? Spend them as you usually would. “As airlines look to recover, they’re going to sweeten the deal for those looking to use their points. Expect to see lots of lucrative promotions until the airlines fully recover from the crisis,” says Zach Griff, a travel analyst at The Points Guy. “In addition to the unprecedented amount of award availability, carriers are also offering increased flexibility for canceling or changing award tickets. With such a low risk of redeeming your points, now’s the time to be making speculative bookings for future travel.”