Maximise your Avios, air miles and hotel points

People who don’t buy points are already buying points without realising it

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We have run a couple of articles recently about special offers for buying points:

These articles always generate feedback along the lines of ‘I never buy points’.

This approach is wrong on two levels.

should you buy avios?

The first reason why it’s wrong to never buy points ….

The first reason, which I don’t intend to go into again today, is that buying points CAN make financial sense.

I wrote a piece in 2021 explaining how I spent over £2,000 on Hilton Honors points to book our stay at Waldorf Astoria The Palm Dubai over Christmas – and how it saved me over 60% on the cash price.

Last year I also looked at the value of buying Hyatt points for their great value suite upgrade awards.

I’m not going over this ground again but it is worth reading the Waldorf article to learn more about my thinking. The bottom line, however, is that flight and hotel prices have been so high this year that it was very easy to make the maths stack up in your favour.

The second reason why it’s wrong to never buy points ….

….. is that you are already doing it.

This second reason is what I want to focus on today. You are ‘buying’ miles and points every day without fully realising it. Ironically, you are often paying more for them than you would pay in the points sales which many people dismiss.

There are three ways of obtaining frequent flyer miles and hotel points which are genuinely free:

  • you fly the airline, or stay at the hotel, on a trip which someone else – usually your employer – is paying for
  • you receive a sign-up bonus for taking out a new credit card
  • you receive points from a product or service you would pay for anyway, and there is no alternative pseudo-cash reward (the Avios deal with Alan Boswell Insurance Brokers falls into this category – you can learn about that here)

That’s about it. All of the other points you earn are, de facto, being purchased.

After all ….

  • if you convert Nectar points into Avios, you are losing out on 0.8p of free shopping for every Avios you receive
  • if you convert Tesco Clubcard points into Virgin Points, you are losing out on 1p+ per point of value by redeeming for another partner offering 2.5x to 3x face value
  • if you convert Heathrow Rewards points to Avios or Virgin Points, you are losing out on 1p of Heathrow shopping voucher or 2p of Heathrow parking voucher for every mile you earn
  • if you convert Capital On Tap points from their Business Rewards Visa card (Capital On Tap review here) to Avios, you are giving up the alternative of 1p cashback – albeit there would be tax issues if you took the cash as this is a small business credit card

There are other occasions where you may pay to take part in a deal purely to earn points:

should you buy hyatt points?

Many of these options require you to pull a trigger, just like buying points

There is, psychologically, a difference between pulling out your credit card to buy miles and points and just picking them up automatically. I get that.

When you use your British Airways American Express card, the Avios just turn up. You are not ‘buying’ the Avios by specifically making a transaction, if you see what I am getting at.

However …..

Whenever you log in to Nectar, American Express Membership Rewards, Capital On Tap, Tesco Clubcard or Heathrow Rewards and make a transfer into Avios, Virgin Points etc, you are ‘actively’ buying those points just as if you’d gone to the ‘buy Avios’ page on ba.com.

Conclusion

The point I wanted to get across in this article is that we are all buying points, all the time – we just don’t always realise it.

Actively buying more points by pulling out your credit card should be seen in the context of this.

Whenever you buy points directly OR transfer in from another programme such as Membership Rewards, you need to have a relatively firm plan for using them.

At the end of the day you need a good excuse to swap cash (very useful) for points (not so useful, as you’ll discover if you try to pay for your dry cleaning with Avios or Virgin Points).

Category

British Airways and Avios, Hilton Honors, Virgin Atlantic and Flying Club

Comments (66)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • ChasP says:
    24 Oct24 October 11:17

    I’m just back from a road trip in California and virtually every petrol station advertises a cash price and a card price – the spread varies between 2 and 5%

    • NorthernLass says:
      24 Oct24 October 19:14

      That’s interesting to know as we are doing a road trip through south Florida at Christmas!

      • ChasP says:
        24 Oct24 October 21:46

        I used a Chase card to withdraw cash without charges and a Curve for everything else.

        If you are in Florida, WAWA petrol station ATMs do not charge fees so used Curve there – dont recall Florida stations offering reduced cash prices

    • dougzz99 says:
      24 Oct24 October 20:44

      Cash/Credit pricing been around a while, 10 years I guess. Didn’t they used to have full service pumps where you paid more too, but could remain in your ver-here-call.

  • Bernard Bjorn says:
    24 Oct24 October 11:24

    Massive Avios devaluation probably on the way, probably via increasing the co-pay ‘taxes’ which effectively devalues the value of avios.
    Caveat emptor.

    • dougzz99 says:
      24 Oct24 October 20:46

      Two probables in a completely unsupported statement.
      A regular FT poster has suggested the complete opposite.
      Time will tell.

      • bernard bjorn says:
        25 Oct25 October 23:39

        Ah, FT. A website where the ‘predictions’ have been so wrong it is a source of much amusement at BA customer events like the rugby. Stick to HfP instead – much better informed, much more useful for avios miles, and much more focused on facts.

  • Jon says:
    24 Oct24 October 11:51

    One strange analogy is Costa – buy 8 and get a free drink. But the price of a drink will have been set to cover this. So £3.20 for a coffee, you are actually putting 40p into a savings account which you can only access if you come back and do the same again another 7 times. There will be people who constantly claim free drinks and those you don’t scan their loyalty card yet still have to pay the £3.20 standard price, meaning Costa ‘keep’ that 50p.

    This is what you are doing with points. The price you pay has the points factored in. The game is to take the points and find ways to maximise their value so you get more out of what you have put in (hence what this website is all about). With Costa a free drink is not a free drink, you are just accessing a drink which has taken you 8 drinks to save up for.

    • John says:
      24 Oct24 October 12:13

      It’s 80p if you bring your own cup and 400p every time you refer yourself

      • Swifty says:
        24 Oct24 October 14:03

        hahaha! self referral made me chuckle

      • ryan says:
        24 Oct24 October 14:54

        Pre the “bean” loyalty, they had a cash points system and I think I counted in the region of 45 self referrals! Each referral was just enough for a Med Cappu + £2 of points for my main account. I needed something fun to do in lockdown…

    • Colin Thames says:
      24 Oct24 October 12:37

      The gaming element is to spend less and earn more, so buy 4 americanos with a reusable cup and earn 8 points to redeem on a large cappuccino, or whatever you fancy.
      This compares very favourably with Starbucks, which takes about £70 worth of purchases to earn a free one. Though if you always have food, which counts towards your spend, the difference is reduced.

      • The Savage Squirrel says:
        24 Oct24 October 13:26

        The point at which you order a drink which wasn’t the one you would have chosen, just to maximise returns on a reward programme, is the point of insanity….

    • riku says:
      24 Oct24 October 13:22

      I think Costa will factor in how many people take advantage of the offer and how many ignore it. So if half the people are in the membership scheme they factor in 20p per drink, not 40p. The same applies even for things like pensions. You need to factor in how many people pay in but will never redeem.

      • TGLoyalty says:
        24 Oct24 October 13:53

        It’s also a marketing campaign. The idea that it drives loyalty and therefore you need to conquest fewer newer customers with expensive campaigns.

        Your coffee wouldn’t necessarily be cheaper without the reward programme.

        Re insanity completely disagree I regularly buy an espresso before the gym but redeem for a fancy drink that I or someone else might enjoy as a one off treat.

      • Jon says:
        24 Oct24 October 14:02

        Exactly. These schemes have been around a long time and all have the same principle – have an eye-watering, glittering goal but make it very hard to redeem. People start to build up points and then bail out, cashing in for less glamorous prizes just so that they have got something – like with Virgin and sausage rolls. Plus you have the people who reach that target goal but then looking back on it realise the vast amount of money they have spent, often the same amount as the cash price would have been when you factor in petrol costs etc (i.e. driving to a Tesco instead of Sainsburys to get Clubcard points to turn into Virgin miles).

      • Navara says:
        24 Oct24 October 16:39

        Same with the current BP 400 points (250 Avios) on a £1 spend how many people will actually only spend £1.

  • Reney says:
    24 Oct24 October 12:08

    Whilst I broadly agree, if you are lucky, you do reach a position where you can diversify. Having enough points in both places for when a redemption comes up is a good position to be in. I currently have Virgin points but no where to spend them, but good to know if one comes up I can jump on. I spend avios faster so focus on there.

  • John says:
    24 Oct24 October 12:15

    Virgin doesn’t go anywhere I want and I have 500k avios. Historically I’ve used 250k avios per year or less so I am now using Chase debit for most things, plus there is now nectar. When my avios balance drops below 250k again I will consider whether to buy more avios via nectar and/or Amex

  • cinereus says:
    24 Oct24 October 14:21

    Don’t think anyone disagrees with this logic. But not really sure what the point is?

    When we “buy” points like this it’s always because it’s a rationally sound decision. For many people, they also choose not to buy points in sales with cash because that’s also a rationally sound decision to make.

    • Bernard Bjorn says:
      24 Oct24 October 15:43

      The article misses the point that we end up with points and miles as a by product of another service.
      It’s not the same as purely buying the points or miles, but then Rhys has got a business to fund so the more he persuades others to buy avios and Amex cards, the better for his business.

      • Ryan says:
        24 Oct24 October 17:40

        It makes sense to me. You’re buying them by virtue of the opportunity cost of not taking cash. It all depends on how you view life decisions. I would suspect most people on here cost things in opportunity cost method

  • Kevin says:
    24 Oct24 October 18:18

    Rob is 100% correct. All of us Avios-collectors consciously “choose” to decline free money (by paying for stuff with a cash back credit card) and use a different piece of plastic which gives us Avios (or air miles/MR points or whatever). This is in essence, buying Avios everyday of the week!

    • memesweeper says:
      24 Oct24 October 18:36

      but don’t forget tax!

      Miles/points earned on a business card are worthless, as far as HMRC are concerned

      C-back is cash , and it either belongs to your employer, or is taxable as income

      • Lady London says:
        24 Oct24 October 19:36

        You might be OK @memesweeper. I’m pretty sure C-back is viewed by the Revenue as a rebate not earnings.

        • Rob says:
          24 Oct24 October 19:50

          It wouldn’t matter, because on a small business credit card it would mean having to reduce the cost of your purchases in your accounts, which increases your profits, which increases your tax bill. Makes no overall difference.

          It does make a difference in a personal context.

  • The Streets says:
    24 Oct24 October 18:28

    Been long like this for insurance quotes like motor

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