This evening I spent over $14,000 in less than an hour on credit cards that earned me points. I didn’t buy a car, or a diamond ring, or a bunch of high-tech equipment. Instead, I bought several cash-equivalents at a pharmacy store, a grocery store and a big discount retailer. The purchases earned me about 38,000 points across different programs, worth at least $300 using my valuations (and anybody who knows me knows that my valuations are very conservative compared to most bloggers who pump up valuations). Within a few days I will have gotten back pretty much all of that $14k and I will keep the points earned. If I so choose, I could repeat this many times every week. I don’t write this to sound big or clever. I am not a fan of posts along the lines of “hey look how big I went on deal xyz, I’m so smart, look at me”. In fact this kind of spending was pretty conservative. I know people who will make three or four times this spend in one day, and repeat it day in day out.
So why do I write about this? Well as I was driving back home I was thinking about all the recent devaluations. From the huge Hilton devaluation to the more recent Delta and now United drops, it is clear to me that we are in a period of serious inflation. The number of people getting into miles and points through blogs aimed at beginners is huge, but I think even bigger is the smaller group of hard-core hackers who are generating millions and millions of miles year in year out , and then focusing hard on squeezing every last drop out of them when they cash them in. The United devaluation may seem brutal, but let’s take one of the worst examples: US to South Asia is up from 80k one way to 130k one way. For the guy or gal who actually earns their miles with their butt in an uncomfortable seat week in week out, this is a harsh blow. But there are plenty of people in this hobby of ours that are sitting on multi-million United and Ultimate Rewards balances. From the days of Office Depot Vanilla Reloads there were people generating a million Chase Ultimate Rewards per month. For these guys, seriously who cares if the price doubled? When you are a multi-millionaire, it doesn’t really matter if the price of a pint of milk doubles. You can still afford more milk than you ever actually need.
I don’t see this changing any time soon and devaluations are going to continue and they are going to be brutal. All those Club Carlson points we all earned so easily? Wait for them to be wiped out. Hyatt is the nice guy? This one really amuses me. Maybe Jeff Zidell is a nice guy who’s shared a few glasses of wine with BoardingArea bloggers over the years. Those bloggers “trust” Hyatt. But remember Mr Zidell gets paid by a public corporation, his bonus is not set by whether or not Gary or Ben like him. So don’t think Hyatt is some friendly, trustworthy anomaly. Especially with Chase flooding the market with their points. Expect that one to flush down the drain at some point soon too. And American Airlines and US Airways? I just laugh out loud whenever I see anyone post that they are somehow “better” than Delta and United and will just treat their customers better.
No folks, this is the simple consequence of inflation. It has become possible to print large amounts of these various currencies, and as such the cost of goods in those currencies is increasing. Some people stray away from manufactured spending because they think it is somehow unethical or “against the rules”. Each to their own, and live and let live, but those people are going to be very poor in the new world of miles and points. It is time to either adapt to this new paradigm, or move on to another hobby.
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