Without further ado, here is Frugal John’s 5th tip on how to make the most of your loyalty programs:
5. Don’t be afraid to spend “hard” cash to maximize your point/mile balance.
Cash is king for the simple reason that it is accepted pretty much anywhere, by anybody, for almost anything. The acceptance rates on loyalty program points/miles are somewhat more constrained. So, while it may feel like it doesn’t make much sense to exchange a hard currency into a less-liquid reward currency, there are many situations in which the financial case can be made.
For example, most major airlines allow you to purchase miles for yourself or others. In general, these purchased miles will cost you around 2.5 cents/mile. If you’re only 10,000 miles away from redeeming for an award flight that would cost $400 normally, the $250 it takes to purchase the miles you need are less than the outright cost of the flight. If you manage to buy during a promotional period, you may find your per mile purchase rate effectively cut in half.
Overall, don’t forget that you’ve probably earned these points and miles by engaging in the everyday activities you would have done regardless – travelling for business or pleasure, shopping at your local store, using your credit card for everyday essentials. Don’t be afraid to treat these loyalty program miles/points like the crumpled $5 bill you find in a freshly washed pair of jeans – it’s a windfall – use it to reward yourself and the ones you love.
Read all 5 of Frugal John’s Tips:
Tip #1: Have a redemption goal in mind.
Tip #2: What goes up must come down.
Tip #3: Aim for your goal but be open to change.
Tip #4: Know the expiry rules for your programs.