One Way Ticket To Hell: How Points Blogs Misrepresent The Value Of Miles To Sell Credit Cards
One of the most frustrating things any experienced traveller who uses points and miles extensively feels when reading the ‘media’ in this industry is the faulty logic and spurious valuations in all the main blog’s articles.
It’s a complicated issue and not one that’s easy to explain. That I’ve drafted, deleted in full, then restarted this article twice now is testament to that…
But I really wanted to get this point across clearly so you can start to think critically about the best use for your miles and what you can actually achieve without all the dreams of Bora Bora and first class suites distracting you.
One Way Business Tickets Are Ridiculous (Mostly) So Why Do Points Blogs Always Use Them In Examples?
Here’s how the game is played. First I tell you about an ‘awesome’ credit card with mega bonus. Then I find something where those points look like they’re worth a lot more.
Often these bonuses require spend that’s significant to most families in order to release them. That’s the trap, of course, credit card companies know they’ll lose to disciplined points players but some families will run up debt/spend money they didn’t plan to spend etc to get the bonuses. On average the banks are winners, of course, or the offers would go away.
Some of the bonuses are good, and not every card is the same but you need to be sure that you’ll never carry a balance, and never spend money you wouldn’t have spent to get the maximum value out of the banks and avoid becoming one of their fish.
Let’s pretend we’re a blogger pushing a card with a 75,000 point bonus that transfers to AVIOS and has a smaller spend eg $3,000 within 3 months. As a travel blogger we’d then pick out this redemption, for example, with BA:
Real AVIOS (British Airways points) users will have a range of values on their points depending on their typical redemptions but usually 1.3–2c/point is where most people settle on the value.
So this redemption is pretty decent, though not exciting. A one way business class to Hong Kong for $500 + about $1,000 in the value of the points used. Not a bad bonus for getting a credit card.
But your typical points blogger isn’t about sharing realistic redemptions. It’s all about making this look amazing. So here’s the one way flight pricing you’ll see shared (as if we all go around booking one way flights at random and so on…):
Short-notice flights are a good use for points on programmes with a fixed award chart (the tickets are expensive at short notice to target high-spending business travellers but your emergency travel is also caught up in it) so they’re a great way to illustrate amazing value per point. Usually our friendly blogger will say something like:
After clearing my 75,000 bonus [insert points currency] with [insert bank] card, I booked a one way flight from London to Hong Kong with British Airways for just 75,000 points and $500 in cash. [Ignoring the cheaper Cathay Pacific Flight] That flight costs $8,389 meaning I got an insane 10c/point value or $7,800 for the bonus. [Insert name of site they write for] values AVIOS for just 1.3c per point so I got 8x value on this redemption.
The truth is even at this relatively short notice a return can be had for way less than the one way value they’re representing here:
And the points option for a more realistic return journey, which more readers are likely to be trying to book:
You can see here for a more realistic journey you’re spending about $800 in cash so the points are worth the remaining $3,000. So 185,000:$3000 which is right in the usual valuation range for an AVIOS — 1.6c/point.
Only by picking a suitable short-notice, and one way flight, the blogger makes it seems like you’re getting 8x value.
They Aren’t Focussing on Redemptions You’ll Typically Be Wanting To Make
What makes it worse though is that, naturally, you have to pay for a ridiculous one way flight back, or fly back in economy if you don’t have enough points for the return.
Getting 185,000 points is relatively tough compared to their easy one way redemption. So not only does it look like it’s out-of-this-world valuable, it’s achievable, without applying for multiple cards/putting huge spends through on one card.
The reality is you’d need a lot more points to actually do something useful/go somewhere and back in business unless you have tons of cards and stashes in different award currencies.
And if you’re planning ahead you’d save even more just by paying cash (pushing the ‘notional’ value of the points down even more).
Points And Miles Are Awesome — But You Need To Learn A Lot To Succeed
I don’t want this article to put anyone off optimising their points and miles. If you travel a reasonable amount, and/or have a decent household spend or your own small business spend that you can run a few credit card bonuses off/accumulate regular points (many US cards have spend multiples etc on many categories) you can do really well.
It would be wrong to pretend that you can just start flying first class around the world effortlessly after picking up a couple of cards, though. You need to pick up the following things first, as a minimum:
- Know where you want to go, and when. Plan accordingly by researching relevant frequent flyer programmes and available card bonuses to make sure it’s achievable with what you can spend/accumulate naturally (eg if you’re a business traveller)
- Understand the sweet spots of all programmes you want to use — BA AVIOS, for example, are great for redemptions in the US, with American Airlines, where there are no connecting flights. Particularly first class domestic flights. Even then I’m not pretending you’ll get 10c/point (or trying to sell you a credit card…) but 2–3c is definitely doable.
- Know which routes do and don’t have surcharges. In this example there were hefty surcharges. Bloggers will often pick routes that have no surcharges and are super luxurious but virtually impossible to book (due to low award availability). If you have complete flexibility on where/when you go you’ll have much more luck nabbing these however mostly you’ll have something in mind so don’t expect to do as well as a blogger who can just go ‘wherever’ ‘whenever’.
Good luck and safe travels!
