It seems obvious to the casual observer.
Diversification is a good idea in the stock market, but it is a bad idea as far as frequent flyer programs go.
In order to maximize award travel, you need to concentrate your earning strategy on one or maybe two frequent flyer programs.
Miles and points have no value if they are not used. Zilch. So there is little value in gathering a few miles here and a few miles there unless you will have enough to redeem for an award ticket or hotel room.
Miles and Points Programs Are Loyalty Programs
Frequent flyer and hotel programs are loyalty programs so it stands to reason that they reward loyalty. If you spread your spending around, the less likely you are to accrue enough points in any one program to redeem an award, or to benefit from elite status. Now I am not one for elite status, but if you are doing a lot of traveling, and can arrange your travel to concentrate on a particular airline or hotel chain, you may accelerate your points earning as you move up the loyalty program ladder.
35,000 Miles Won’t Get Me Where I Want to Go
Let me give an example. Last year, I opened a The US Airways Premier World MasterCard® for a bonus of 35K miles. I thought this was a great deal because the miles were awarded after making my first purchase — there was no minimum spend requirement. Free miles, I thought. (The offer now is for $30K miles after your first purchase, with an annual fee of $89.)
US Airways fit into our family’s travel plans, because they had a lot of flights from Washington National (DCA) to Hartford (BDL). The US Airways card came with two $99 companion passes, so I thought it would be a good way for our family of three to save on travel expenses. Furthermore, it allowed award redemptions for 5,000 fewer points. (Economy awards on US Airways normally cost 25K miles, but if you have The US Airways Premier World MasterCard®, they cost only 20K miles.)
When it came time to book our travel, there was ready award availability at the “economy” level for flights from DC to Hartford.
So what’s the problem?
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