News

Before we dive back into the time value of points, there are a few relevant and leading news items to discuss:

Not only does maximizing the value of your points require burning early and often, but it also necessitates hitting smaller products with outsized value harder than products with average value.

Revisiting the Time Value of Points

With those notes in mind, we can derive an equation for the time value of points. If it doesn’t render correctly in your email client, see the website here. (And yes, I’m sorry to put you all through this, but sometimes I can’t won’t help myself):

FV = PV \times (1 + r - (q \times d) + i)^n \times (1 - p)

Where:

FV = future value
PV = present value
r = any promotional increase of value in a given period
q = the probability of a devaluation in a given period
d = the rate of devaluation in a program in a period
i = interest on points earned in a period (there is a program that does this)
n = the period (time)
p = the probability a program shutting down and wiping out all value

(Thanks to Jon for noting that the original version of this post lacked a definition for i)

The Point?

Is this formula useful? Sort of. It’d be more useful if someone would write a quick calculator web site. Do I actually expect anyone to use this formula? No, not really for anything other than mental gymnastics.

Points and miles still devalue, and sometimes they devalue a lot. Don’t forget that the second part of this site is titled “And Burn”.

Pictured, left to right: MEAB with glasses; The entire churning community after this post.

  1. Clear has a $75 Uber credit for new accounts with promo code WBTGUBER23. Incidentally Clear only requires a new email address to be considered a new account. Assuming you have a few AmEx Platinum or Business Platinums under your belt, this is a backdoor cash out. You may need multiple Uber accounts to take advantage of the promotion multiple times though, the jury is still out.

    The expiration date isn’t specified, but I assume it won’t stick around past black Friday. (Thanks to caseyrobinson2)
  2. Target will have its annual promotion 10% off of up to $500 in Target gift cards on December 2-3, limit one per Target Circle account. Normally I’d wait until near that date to write about the offer, except having seasoned Target Circle accounts is the way to scale and if you want to scale it, you should start seasoning approximately [checks notes] now. (Thanks to DoC)
  3. Kroger has a new promotion for 4x fuel points on third party gift cards and fixed value Visa and Mastercard gift cards starting today and running through December 5. Secondary market fuel points rates have recently been sky-high because:

    – Gas is expensive
    – There are fewer suppliers
    – There hasn’t been a long-running 4x promotion for a while

    I expect though that a week or two into this promotion we’ll see rates come back down to recent norms. As usual, make sure you’re working with a fuel points broker or end-user that assumes liability for frozen accounts within a day or so.
  4. Hy-Vee stores have $10 off of $150 or more in Visa gift cards through November 23, limit one per transaction. If you live in Hy-Vee territory this one is almost certainly worth your time. (Thanks to GCG)
  5. American Express offers has a targeted $50 back on $200 or more in JetBlue airfare through December 31 (or travel wallet funds if you book a non-Blue Basic fare and cancel it after 24 hours).
  6. For some reason the second tier airlines are colluding to run fare sales for travel booked by tomorrow night:

    – Southwest for travel from December 5 through May 22 with surprisingly few blackouts
    – Alaska for travel to and from Mexico
    – JetBlue for travel from December 3 to January 31

    The Alaska sale in particular has some great rates, assuming of course that Alaska serves your airport.

Ok, which one of you is responsible for this ending up in my inbox yesterday? 😭

It’s common for card issuers to offer bonus points for keeping a card open (retention offers) and for converting your card to a more expensive version (upgrade offers), but a new type of bonus just dropped in exactly the way that Taylor Swift’s Reputation (Taylor’s Version) didn’t last Friday: Downgrade offers.

We’ve now seen multiple reports of instances where an AmEx cardholder had no retention offers available and wanted to close a card, but were instead offered a bonus to convert the card to a lower annual fee product. The linked datapoint downgrade offer was 25,000 Membership Rewards after $1,000 spend in three months for converting a personal Platinum card to a personal Gold card (which I’d generally rather have anyway).

Unlike nearly all other banks, American Express’s primary business is credit cards so outstanding card count matters to their bottom line disproportionately, at least compared to most other card issuers. Now we just need to wait for the “offer final frontier”, or a statement credit or bonus points for closing a card.

Discover’s poorly thought out upcoming product conversion bonus, foil included.

  1. Staples has fee free $200 Visa gift cards in store through Saturday, limit eight per transaction. This stacks nicely with the American Express Business Gold $20 monthly office supply credit.

    These are Pathward gift cards, so have a liquidation plan in place. If your liquidation plan includes major nationwide retailers, there’s a $480 per six minute per store velocity limit.
  2. There’s a, umm let’s say “targeted”, Bank of America promotion for 5% off of ebay purchases of up to $1,000 with promo code TAKE5BOFA through December 31. The coupon has a limit of 10 uses, and presumably the limit is per ebay account. Notably you don’t need to use a Bank of America credit card to be eligible.

    The promo code isn’t working with the most obvious plays like gold bars, but you’re enterprising people right? Sometimes it makes sense to be on both sides of a transaction, just calculate the spread first. This may stack with portal cash back too. (Thanks to DAMU)
  3. It’s been just three days since we discussed the time value of points and how devaluations are one of several factors that erode the future value of loyalty currencies. Southwest decided that Veterans Day was the perfect time to illustrate the principle, announcing that points would be worth 4% less starting on January 1, 2024.

    As usual, head-on bookings with the Chase Sapphire Reserve continue to be more valuable for redemption than transferring points to Southwest and booking that way (1.5 cents plus mileage earning vs about 1.35 cents and no mileage earning), that is unless the risk premium for free cancelations and redeposits on points bookings and not dealing with flight credits is worth more than 0.15 cents per point to you.
  4. Meijer MPerks has 15,000 in points back on Choice, Happy, and One4All gift cards of $100 or more, limit one per MPerks account. Fortunately for Meijer, it’s not possible for a single person to have multiple email accounts, and therefore multiple MPerks accounts. (Thanks to GCG)
  5. There’s a targeted American Express offer for $175 back on $1,000 or more in cumulative spend with Cathay Pacific by December 31. It’s an interesting choice on AmEx’s part to make this one cumulative, almost inviting gamers to game. (Thanks to TeddyH)

Happy Monday!

An NFT sold on ebay showing the relative value Ultimate Rewards Southwest bookings compared to Rapid Rewards bookings. Limit one NFT per MPerks account.

Financial goons will be quick to tell you about the time value of money, which is a basic concept in economic theory that says money is worth more now than it is in the future, in part because:

  • You can earn interest immediately on money you have now
  • Thanks to modern monetary policy, inflation will always eat away at money’s value
  • Opportunity cost (which is sometimes added directly into either or both of the above)

The same concept applies to points and miles, but the factors aren’t quite the same. In the case of points and miles, they’re worth more now than the future because:

  • Devaluations happen
  • The redemption value of points is often tied to the cost of tickets (inflation bites here too)
  • Currencies get washed away
  • Miles and points don’t earn interest

What’s the takeaway? Burn those points as soon as practicable. Can you come up with a formula to describe this, asked no one? Yes we can, but no, I’m not going to do that today.

Have a nice weekend friends!

Yes, it’s time for the quarterly MEAB math nerd joke. Sorry, not sorry.

Apparently today I chose chaos by barking out orders at you like a 70s business man in a plaid suit with his feet on the desk and a cigar hanging out of his mouth. Sorry I guess?

  1. Do this now: Register for your targeted Q4 United MilePlay promotion. I got “book and take a premium seat one time by December 15 to get 5,000 bonus miles”, and the fine print says minimum $450 in base fare.
  2. Do this now: Manufacture Spend on all of your Bank of America cards today, up to $2,500 per card. You’ll earn your regular rewards +2% on cash back cards, and +2x on points earning cards.

    Note: There’s some debate about whether multiple cards for the same company are each eligible for $2,500 in spend. My opinion is that you’re eligible for $2,500 per main card account, regardless of the associated business.
  3. Do this never: Bilt points can now be transferred to Marriott at a 1:1 ratio, or for masochists that hate value, a 20,000:25,000 ratio in exactly 20,000 point increments. Frankly this is almost worse than redeeming Bilt points directly for a statement credit. If you’d like 100 bonus Bilt Points as a consolation prize for having to read this news, you can link your Marriott Bonvoy account to Bilt and you’ll get ’em.

Happy Thursday!

MEAB’s Thursday demeanor.

According to recent airline earnings calls, the demand indicator for domestic, low-cost travel has an indicator light and it’s blinking red. That means (1) there’s opportunity in the stock market, and (2) that we’re going to see airfare and award deals over the next couple of months. In fact, today’s news items are dominated by them:

  1. United has an award sale for flights to Maui booked by this evening for travel between November 12 and December 16. I’m seeing one way fares of approximately 16,000 miles and round-trip fares of 30,000 miles, even on Thanksgiving week.

    Unfortunately first class seats don’t appear to carry any discount, so you’ll fly in the back and you’ll like it (or else).
  2. Turkish Airlines has an award sale for half off of flights to and from Chicago for travel either in the next three days or between January 16, 2024 and March 31, 2024, but again, only in economy. Sorry bourgeoise. (Thanks to FM)
  3. Breeze Airways has 35% off of base fares booked by tomorrow night for travel all the way through September 3, 2024 with a few blackout dates around Thanksgiving and Christmas using promo code BENICE. This discount includes spring break and summer travel 👀.

    As always when a Breeze fare sale comes up, it’s time to highlight another route on the “Breeze Dartboard of city pairs”. Today’s winner is CAK-ORF, or Akron Ohio to Norfolk Virginia.
  4. Southwest has 30% off of base fares to and from Hawaii booked by tomorrow with promo code SAVE30. There are blackout dates around Christmas, President’s Day, MLK Day, and lots of March. (Thanks to David 99)
  5. GiftCards.com has 5% off of $100 Visa gift cards through November 19 using promo code HOLIDAY5 or GIFTVISA5. As usual, go through a portal and don’t forget the current round of portal spending bonuses. A few caveats though:

    – GiftCards.com emailed affiliates that commissions wouldn’t apply when codes were used on the last round, but apparently that email wasn’t sent this round
    – The back-to-school portal bonuses seem to have been delayed and haven’t paid out, whether or not GiftCards.com was involved
    – The maximum per-order discount is $15, so stick to three per order

    You’re all adults though, do what’s best for your situation.
  6. There are a few interesting American Express offers:

    – 50% off of Uber or Uber Eats, up to $25 spend
    – $90 statement credit with $350 spend at Hertz

    As usual, gamers can game. (Thanks to TeddyH)

The official airline demand annunciator panel is currently indicating softening demand for economy travel.

Editor’s note: My mail software was daylight savings naive and thus didn’t update yesterday’s delivery time with the time zone change, probably because it was developed by zonies according to reader Jim. You can access yesterday’s post here.

Chains popular with manufactured spenders often have limits on how many times a card can be used in a given time frame, for example, famously Kroger will usually decline a credit card after six swipes in a rolling 24 hours, chain-wide. That obviously means you’re limited in total manufactured spend at Kroger for a specific card, unless of course you aren’t:

  • Apple Pay looks like a different credit card
  • Many bank issuer’s authorized user cards have a different account number

A little creativity can go a long way.

Of course there is such a thing as being too creative.