The Pit of Our Frequent Travel Program Fears
THURSDAY, APRIL 25, 2019 -- Submitted for your approval: Frequent travel plans are now the middle ground between light and shadow, between science and superstition, and they lie between the pit of our fears and the summit of our knowledge. It is a dimension Rod Serling dubbed the Twilight Zone decades before the frequency programs were even invented.

With props to Jordan Peele's intriguing reboot, Serling's smoke-wreathed countenance and his chilling introductions remain the best descriptions of the current state of frequency plans. As I explained a few weeks ago, we are being tricked, fooled, bamboozled and generally played for rubes.

The only way to fight back? Understand the current rules for earning and burning. And when you do understand, consider surrendering. I end this week's visit to the Frequency Twilight Zone with a useful new proposition: Stop using airline and hotel plans and their related credit cards and build your own "travel bank" based on cashback cards.

Some of you continue to hoard miles or points in a frequent flyer or frequent guest program. WTF, people? How many times must you be slapped with a devaluation or insulted by radical reduction of liquidity before you realize airline and hotel programs are not banks? Burn as soon as you earn. No saving for the "dream trip." No building your accounts for retirement. Hoarding miles and points is a loser's game. Don't be a loser. Want an absolutely contemporaneous example? United Airlines announced November 15 as the start date for its switch to supply and demand pricing from a static award chart. But it's already adjusting rates. I've been looking at late-summer award prices to Europe. United has reduced its unrestricted one-way business class price to 129,000 miles, down from 155,000. But it has also eliminated most, if not all, of the 70,000-mile restricted one-way awards at the same time. Airlines not only devalue and make your miles illiquid, they also lie about when and how they do it.

The vast majority of your frequency credits these days is likely coming from credit card purchases and acquisition bonuses. Don't move the points. Bank plans--American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou--are not banks, either. They will not pay interest on your credits and there's no guarantee they won't devalue, too. But they have proven more reliable safe harbors for your credits. Don't move bank points to an airline or hotel program until you are ready to claim an award. It's the safest choice. And, again, a contemporaneous factor: The emergence of Capital One as a transfer partner. The Venture Rewards card, for example, currently offers a 50,000-point acquisition bonus and no annual fee in the first year. You receive two points per dollar spent and they transfer at excellent rates (2 points equal 1.5 airline credits) to Air France/KLM, Air Canada, Cathay Pacific, Emirates, Qatar Airways and others. The points also transfer to Singapore Airlines at a lower ratio.

It's a comment on how thoroughly airlines and hotels have gutted elite status that I hardly ever get a member asking about mileage or mattress runs anymore. But there's a corollary: Flying miles are bad miles anyway. They are the most expensive to earn and the least flexible. Hotel points aren't much better. Never ever fly or stay in a hotel just for the miles and points. If you're going to continue to play this game, separate it from your actual business travel. Focus your strategy on piling up bank credits. Airlines and hotels aren't loyal to you, so don't be loyal to them and don't worry about building up your airline or lodging balance via business travel. Fly based on the best combination of price, comfort and schedule. Stay based on the location, price and amenities you want. Frequency credits earned by actual business travel now are almost irrelevant to any sophisticated miles-and-points calculations.

Hotel programs do a pretty good job of making their entire award inventory available online. The airline programs? Not so much. Availability of seats on their alliance and frequent flyer partners is distinctly a sometimes thing. Before claiming any award, scan the airline's list of partner carriers. If you're not seeing award availability online for them on multiple days or itineraries, it's a pretty good bet there is award inventory you're not seeing. Suck it up and call the program's award center and inquire about availability of seats on carriers that are not showing up online. If you get a snarky, snarly or downright stupid agent, use this powerful telephonic trick: Hang up and call again. Just because one agent can't or won't look for off-Web availability doesn't mean the next one you reach won't be more cooperative or knowledgeable. Is this old school award approach annoying in the second decade of the 21st century? Yup. But limiting yourself just to what you can see on the Web is equally unenlightened.

Full disclosure: I haven't thought about using even devalued miles and points for merchandise in forever. In fact, it may be a quarter century since I've looked systemically at award values for stuff. But a merchandise catalog from United MileagePlus showed up in my mailbox this week and, given how airlines have devalued mileage awards, I thought I'd take a fresh look. Um, don't waste your time. Just a few samples: Using 32,400 miles for a Nest 3rd Generation Learning Thermostat yields a value of just 0.65 cents. Burning 27,000 miles for a Cuisinart Burr Grind and Brew Coffeemaker generates just 0.52 cents of value. And getting 0.84 cents of value from dropping 29,500 miles for a pair of Bose Noise-Masking Sleepbuds is a snooze.

If you have finally, irrevocably and eternally sworn off frequency programs and their deflating currencies, the path forward is DIY: a self-managed travel bank funded by cashback credit cards. The idea is simple enough: Place the cash rebate you'd get from your credit card spending into a savings or money-market account earmarked for travel spending. How much cash can you generate? Depends on how carefully you manipulate your cards and spending. Want simple? The Citi Double Cash and the Capital One Spark Cash offer a flat 2 percent rebate for all spending. Want to earn more? Add cashback cards with "accelerators" that rebate larger percentages on specified spending categories. The Capital One Savor Rewards card kicks back 4 percent on dining and entertaining. The Chase Ink Business Cash returns 5 percent on as much as $25,000 spent at office supply stores and on Internet, cable and phone services. The Wells Fargo Propel kicks back 3 percent on all flights and lodging and even gasoline and ride-shares. There is a blizzard of cashback cards with accelerators you can throw into the mix based on your spending patterns. Manage wisely and you'll have a nice cash stash available for flights and hotels.