We're back! We cut this show as the last segment of a Patreon Episode, and are releasing it here a little delayed for everyone to listen.
0:21 Main Topic: Airline Miles vs Bank Points
0:52 Set the stage: Why is this an important discussion.
- Every major bank has a bank point. Chase UR, Amex MR, Citi TYP, WF Rewards, BofA Rewards, US Bank….
- Most of these can be cashed out for pennies (or fractions of) OR can be used in the bank run travel portal for more than a penny.
- Finally some of these can be transferred to airlines as airline miles. These have completely different booking methods and tools, along with a varied amount of value based on the flight or hotel booked.
- Maximizing value for these miles is a key to earning back the time and money we spend to earn the miles. Example: It almost never makes sense to cash out MR at .6 cents. (news story)
5:51 Bank Point bookings Benefits:
- Cancel and points can just come back
- Need to book a refundable fare, eating away the value
- Open to booking across all alliances and even airlines that have no native point or alliance.
- As long as it is in the portal you can book it. Sometimes phone agents can see even more.
- 1:1 pricing for most airline tickets.
- Airline bookings are elite benefit eligible and earn miles
- Hotel bookings are now allowing loyalty numbers to sometimes be added for elite benefits
13:09 Airline Miles Benefits:
- Massive flexibility for most domestic carrier programs. Cancel as close in as you’d like. Great for provisional flights
- Value is not pegged to the dollar cost of a flight, in some cases this results in fantastic values.
- Economy fares can be incredibly valuable uses of miles if you’re interested in them for long haul flights.
- Newer tools make searching easier, but still a hurdle
19:44 Airline Mile Weaknesses
- Pricing is highly dynamic and the programs are each unique and have complex rules and booking channels.
- There need to be reasonably priced award seats or your miles can become worth less than a bank point.
- Orphaned miles have no benefit outside of the program they’re in.
- Phantom space.
- Business class fares for more than 2 people become increasingly difficult to book.
- Some dates and destinations are effectively blocked out
- Large learning curve.
24:27 Bank point Weaknesses
- Limited upside potential, each program caps the value somewhere between 1.25 and 2 cents per point
- Hotel prices can be inflated, reducing the value earned by the points
- The ability to book anything depends on the bank point portal, which sometimes is less robust that a native airline/hotel portal or even an OTA like booking.com
- The card associated with the uplift needs to remain open for the points to have uplift. This is impractical for some, and costly if annual fees cannot be eradicated.
31:01 Airline Mile Uses that don’t get enough Discussion
- KLM/AF have <20,000 mile ($200 worth of points) nonstop flights one way + about $90. The Equivalent of $600 round trip to Europe is a steal. Compare to about $1300-1800 round trip during peak times. Yes you can pivot to lower cost or 1 stop for less. But nonstop with native international miles is a great deal.
- Business class when you’re flexible enough. 50,000-100,000 per person one way.
33:42 Examples where Bank points win:
- Domestic flights, nonstop on the day you want.
- Can sometimes find first class lower priced than you’d expect.
What about you? What do you think is a strength of Airline Miles or Bank Points that doesn't get enough discussion? Share out here in the comments or on Social media.
