Reasons To Diversify Our Miles and Points Portfolio

I have been frequently asked what my favourite program or institution is (airline, hotel, credit card company). I have a hard time answering these questions because I don’t have any, which I will explain why in today’s post.

I have previously written a post about The Importance of Diversification, but I feel that I am due for an update on this discussion.

The temptation is to pool all our miles and points into one program, especially if we do not put in the effort to accumulate lots miles or points, we may feel like we never have enough for a reward redemption. In which case it may make some sense to focus on one program for less hassle.

Unfortunately, such a move would be putting all our eggs into one basket and if the basket drops…

If you Decide to Pool Your Points

Be wary of the expiry policies. The expiry policy should technically not be a problem if you channel all your energy into one program. But I have heard stories of people losing over 100,000 Aeroplan miles by forgetting about the 12 month activity rule.

Beware of devaluations. Once your only program gets hit with a devaluation with its rewards program or earning ratios, every mile or point that we earn previously will be worth less.

Earn and Burn. Because of devaluations, I would not hoard my miles or points for very long if I only had one loyalty program. Using your miles and points keeps you ahead of devaluations. 

Benefits of Diversification

Take advantage of different promotions. It is no secret that earning bonus miles or points can really speed up your accrual. So when you see a promotional offer, you may want to jump on that program for that specific time period.

Avoid devaluations. By diversifying, you would not have any loyalty to one program. Even though you are diversified, you may still channel a bit more energy towards certain programs while they are still good. If they get hit by a major devaluation, you can always burn the points and move on to another program that you had less focus on, but you can pick up steam more easily by shifting focus.

Take the best of all worlds. I don’t believe that one program has all the best of everything. By diversifying, you can take advantage of what you want and leave the rest behind.  

Save money. For example, whenever I need to pay for a flight or a hotel room (instead of using miles and points), I will lean towards a more affordable option. I may not choose the cheapest, but I will take price into consideration. By being a member of multiple programs, I do not fear missing out on earning rewards.

Truth be Told

Collecting miles and points is not for everyone because it requires work. The good thing is that the more work you put in, the more you will be rewarded (pun intended).

How to Keep Track

Mileage Managers are my favourite tools to help keep track of all my loyalty programs. My favourite one is hands down AwardWallet by far. I am always open to competition, but for the time being, they are a great program for Canadians to use because they include a lot of Canada only programs.

Otherwise, at leads create a spreadsheet to help yourself keep track of all the programs and their expiry policies.

Closing Remarks

I am always going to advocate diversification. I had a hard time being 100% loyal to only one program for eternity. What if that program shuts down?

At the end of the day, the most important factor really is the expiry policy. Once you create a system, to help you track it, the next steps is to know your options to help keep the account active. If you believe that those options are doable, then it won’t be a problem to keep your accounts active. The day these rewards stop being worthwhile, I may change my tone, but as I mentioned before, it is going to take a bit of work to manage everything. For the time being, I do believe the rewards are worth it!