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November 25, 2004

Why you should keep earning miles, in spite of rising award prices

Several days ago I offered a long discussion of why I believe that frequent flyer awards will get more expensive over time, and why the best strategy is to "burn as you earn" rather than building up large balances.

I also said, though, that the programs remain a good value and well worth participating in.

Several readers asked if this wasn't a contradiction.

I actually believe both simultaneously. Award prices are going to go up over time, so the value of previously earned and banked miles will be diluted. At the same time it's easier to earn new miles than ever before (part of why prices will go up in the first place) so it may not be any harder or take any longer to earn awards under new reward charts.

A decade ago you couldn't earn miles for credit cards, telephone, online shopping, taking surveys, flying on partner carriers, renting cars, signing up for program emails, and supporting breast cancer research.

Inflation destroys the value of savings. But if earning keeps pace with inflation, then current (points) income buys just as much (award) travel.

So don't assume your banked miles will be worth as much tomorrow as they are today. Spend those points. But earn more points for use in the future.

Posted by gleff at November 25, 2004 5:38 AM

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