[READER QUESTION] What are some Common Miles and Points Mistakes?

I am not going to lie, there was a point in time that I made some of the following mistakes and I have regretted it ever since. But it’s never too late to do a course correction. Below is a list of some of the common miles and points mistakes that can easily be avoided.

If you are new to the points game, I would definitely read my Pointshogger 101 post to help get you started.

1) Not signing up for loyalty programs

I remember thinking: “Ah… I will never fly with that airline ever again, so there’s no point signing up for their loyalty program.” What a big mistake, because I flew with that airline again less than 2 years later. Never again will I not sign up for a program.

For airlines, I kept it simple on myself, now I made sure that I have one loyalty program per airline alliance, so that I can cover as many different airlines as possible. The difficult ones to track are the ones who are not affiliated with an alliance. For hotels and car rentals, if I do not earn their points directly, I redirect the points to another loyalty program that I do use.

2) Not signing up and using credit cards

Without credit card sign up bonuses, I actually think that I would just stick with cash back credit cards instead. Credit card sign up bonuses is probably the most lucrative way to earn points.

Secondly, I pay everything with my credit cards. It may seem annoying to the customers behind me or to the cashier, but those points eventually give me a return. I understand that some people do not qualify for a credit card. In which case, I would recommend that you learn how the credit system works so that you can eventually qualify for one.

3) Not paying off your balance in full

This is a chicken or the egg problem. If you cannot afford to pay your balance off in full every month, then you need to either keep better track of your accounts or increase your income. Otherwise, you will hurt your credit score too much and you won’t be able to apply for more credit cards. And you will be paying high interests, and the interest payments never justify the return on points.

4) Letting points or miles expire

AwardWallet is my favourite tool for tracking all my accounts in one place, to make it easier on me to track which accounts are about to expire. It may require a little bit of studying, but once you learn how the loyalty program works, it is actually fairly easy to find ways to keep the accounts active.

5) Not redeeming for decent value

I put together a page entitled: “How Much are Points Worth?” This factor requires a little bit of math. When you redeem your points, you want to get the most value out of your points as possible. The page I put together gives an estimate of about how much value per point you want to aim for to get a decent return, which leads nicely to the next point.

6) Not believing in the return

I often hear people saying that it is too much work to keep track and learn. My question is, do you feel that your job is too much work for the return that you are getting? Do you feel that you are getting overpaid or underpaid at your job?

Unfortunately nothing comes free. It does require a little bit of studying and work to get better value out of your loyalty programs. Luckily for me, this is a big time hobby of mine, so it does not require a lot of effort for me to learn the system and to keep track of my accounts. If you are willing to study, there is a lot of free information out there to help you learn how to make life easier on you when trying to keep track of everything. It’s only difficult when you don’t know what you are doing. Once you figure it out, it’s a skill that you can keep with you forever, which transitions well to the final point.

7) Not having a long term vision

Once you learn the skills, you can use those skills forever. One of the reasons why I made the mistake in factor 1) is because I did not have a long term vision in mind. It is very clear in my mind now that the points I earn today will be for a trip 18-24 months away.

Learning how to diversify my points portfolio also taught me how to plan for the long term. We never know when a program will devalue so badly that we will want to discounting using that program. So having a diversified portfolio protects us against such an event.

Another simple reason why I rather diversify my portfolio is because if I had to pay for a flight or a hotel room, there will be times when I prefer to pay for a cheaper option, in which case I will not be scared which program to use, because I will already be a member of that program.

I also found that the more points I accumulate, the more I tend the travel. There have been numerous trips that I have taken recently that I would not have taken without points. Points have really made a difference in my life and I intend to continue making a difference in my life.