Are frequent flyer points really worth it?
I see everywhere so many people blogging on how to get free travel from points. Sure you can (I do it) but making it your primary focus can drive you crazy.
If you want to make the most of reward points you HAVE to think about them as being just that.
An extra reward.
I've seen so many people over the years get so caught up in their points that they spend way more money than the damn free flight would have cost them. WAY MORE!
Credit Card Points
The points you earn from your credit card spend can be the best type of reward points you can have. If you don't need to fly with a particular airline and you can just book through the credit card reward system, that does make things easy. If you are paying for stuff anyway – sure why not. However you need to STAY INFORMED and on track with your card.
Pay the money you spend back to your card every single time. The minute you incur interest it probably outweighs the points. If you are using your card just to pay for stuff and not relying on the credit, it's points for free. Go for it. If you do tend to leave items on your card for a while remember that the interest might end up costing more than the points are worth.
Don't get so hung up on paying for things with your card that you agree to ridiculous merchant fees. Cards that earn points usually have a much higher annual fee. Small merchants often want to charge you extra fees to use your card (especially online merchants) and by the time you factor that in, maybe the points just aren't worth it.
Frequent Flyer Points
Airlines love their rewards programs. It keeps you loyal if you think you are getting close to that all important free flight. What you tend to overlook is that while you are reconciling the fact that this flight will earn you 1500 points and 25 status credits which puts you closer to your free flight, it might cost you tens or hundreds of extra dollars. You do that multiple times and your rewards flight isn't free!
Staying loyal works well
- If you are flying anyway and the price is comparable,
- the time frame suits you and the departure point is close by.
- the points have an extended lifetime.
It doesn't work so well
- If you end up going via Timbuktu,
- paying $307 more than a competitor and
- have to pay for parking or a train to a terminal that isn't close by,
If that's the case, maybe not such a great deal…
I get the points mostly from our credit cards and my husband has a business card so the monthly points from that are pretty good, however I always think about the points as being an extra reward, not the reason we are buying or flying.
Think about it like this: if you had 1257 points with Virgin and you needed to have 65,000 points to fly from Sydney to Bali lets say, how likely are you to try to fly Virgin to build those points up to 65K? Not very. You would book a flight that was the most cost effective at the time you wanted. You're 63,800 points away from that flight so its not going to even factor into your decision.
If you have 57,450 points with Virgin however, your brain is telling you that you are close to what you want so you are probably more likely to try and fly Virgin to get the extra points. That's great unless virgin is more expensive or the flight times are bad so you have to pay an extra nights accommodation for example. All of a sudden you've paid more money for the same result. You get from A to B. That's what you need to focus on. Where you want to go and for how much money. If you get points for the trip, awesome but if you are paying extra to do that, you are just gambling really.
I worked out that on average my Qantas Frequent Flyer points (if I didn't fly – only earned from my credit card) in my case is earned at on average 1.5 points per dollar.
So if I use them to fly from Brisbane to Singapore business class using points, that can cost me the equivalent of $50,000 spent on my card!!
Actually flying with Qantas lets me generate a lot higher earn rate points wise, but I live on the Gold Coast, so I either have to pay a premium for JetStar flights to get my points credited (Qantas's budget airline) or get to Brisbane to fly from there. Qantas doesn't fly from the Gold Coast so unless it's a long haul flight, its not worth me flying with them for shorter flights. Longer flights YES – I can go direct from Brisbane to almost every other continent, so they are great for long haul flights.
How I look at points
Its very unlikely that I'm going to use my points for an economy class flight. Flying is pretty cheap these days and I do a reasonable amount. What isn't cheap is flying anything that isn't economy. So I pretty much ONLY ever use points for business class flights now. I know I”m going to get slammed for being elitist, but hot damn – I've spent my money, I've flown those legs – they are MY points and I will spend them however I like.
I'm not a good flyer.
Didn't expect that did you? I'm not a great flyer. I have a bad back that prevents me from leaning back so even if I can put my chair back in economy its just going to result in a spasmed back so I pretty much never do it. I can't sleep on my back, so I can't sleep on planes unless I can lie down. I'm prone to blod clots so I'm always a little stressed and my 180cm height is primarily my legs so I don't fit well. So basically – I'm not a good flyer.
If you've ever gone anywhere that isn't Asia from Australia you are looking down the barrel of at least 13 hours in the air. While I have no challenge at all paying for an economy flight (I would NEVER pay business class fares!), if I have points you can be assured that I'm going to save them for those long legs and arrive somewhere nice feeling somewhat human. I've been saving up my points now for over two years for flights to Europe next July and I won't have enough for all the way, BUT I can do 3 legs out of 4 so that's something! Europe for free – can't sneeze at that.
Points principles I live by
There are certain principles that I apply to earning and spending points.
- Accept that it is hard to earn points on the road. You aren't likely to pay for small purchases at a local 7Eleven in India with your card so it is much harder to earn points once you are travelling than when you are at home.
- Reward flights have to be booked up to 9 months in advance. That can mean that you will need to commit to set travel dates. Take that as a consideration.
- There are so many low cost airlines out there now and some of the ones that fly from Australia are really good. We've flown with both Scoot and AirAsia and find them to be great. Tiger however is not so good. Their safety record is fine, however they are renown for delays and cancellations. Often its not worth me spending my points on short haul flights. Paying for it is better and saving the points for a 15 hour haul makes more sense to me.
- Bonus points are where you really can increase you total. We have a supermarket chain in Australia that the rewards points can go straight to our frequent flyer points. Dollar for dollar which is pretty good. They have really good bonuses which I always keep an eye out for. Points Hack Tip: I found that if I don't shop every week, I get heaps more bonus offers. I think they are trying to ensure my loyalty and because I shop erratically they are constantly trying to “get me back” so to speak. Usually they are things like an extra 1,000 points if you spend more than $275 in one shop. If I'm not shopping every week that's no challenge so that's what I do. What I don't do though is spend $275 for the sake of 1,000 points. If I've just shopped, I won't go and specifically spend that money but if I can stock up on things we always use, I might consider it.
So what's the takeaway here? By all means sign up and collect as many points as you can. As long as you look at them as “rewards” and not necessary and don't spend more money than you need to just to earn the points – they are a travelers dream.
- I've flown long haul business class on Qantas (one of the nicest airlines in the world) maybe 10 times.
- Brad and I have flown on Emirates (such a nice airline) probably half a dozen times in business class and twice in first class &
- I've flown numerous legs to and from Asia with China Southern also business class ALL ON POINTS.
So yes they are definitely worth it if you watch what you spend and don't look at it as a have to.
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