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

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

• get up to a 70% bonus when you buy Virgin Points (now closed)
• get up to a 100% bonus when you buy Hilton Honors points (buy here)

…. and there have been many others. These articles always generate feedback along the lines of ‘I never buy points’.

This approach is wrong on two levels.

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.

In 2021 I looked at the value of buying Hyatt points for their great value suite upgrade awards, and we have another upcoming article using an example in Stockholm.

Last October I stayed at Park Hyatt New York using purchased Hyatt points, using £630-worth of points for a room selling for £1,400.

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 in the last couple of years that it is often possible 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

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

After all ….

• when you earn miles and points from a credit card, you are turning down the chance to earn cash via a cashback credit card – I looked at the two Amex Platinum cashback cards here

• 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 compared to redeeming at a partner offering 2x face value (eg Hotels.com)

• 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

• if you convert American Express Membership Rewards to travel rewards points, you are giving up 0.45p of Amex statement credit or 0.5p of gift card redemptions per point

There are other occasions where you may pay to take part in a deal purely to earn points. For example, Barclays Avios Rewards charges you a £12 monthly fee to receive 1,500 Avios in return – plus a British Airways upgrade voucher every 12 months.

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 a miles credit card vs a cashback one when you make a purchase 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).