May Velocity Points bonus incoming....

[aikman]

Because they are worth more to me as flights.

Here's an example - Singapore to Amsterdam next year in Business...

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139000 velocity is 278000 flybuys.

In your view that is $1,390 of real money at Coles.

In my view this $5,841.87 of business class flights.

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This is better value for me as I am going to take the flight either way.

Woolworths rewards on the other hand I always take as cash - no allegiance to Qantas in any way so their points are valueless to me.

I also do play around with credit card bonuses when I can.

Would you have otherwise really paid $5,841 if you didn't have any Velocity points?

Or is it more likely for example that you would have paid $2,000 to fly Etihad instead, in which case your points are really only worth 1.35c each.

 

[Mr H]

Why do people transfer FB to VFF? 2,000FB = $10 real currency ($10 off shop) or 1,100VFF (with 10% bonus). This means you are essentially purchasing VFF at $0.009 per point.

You can generally purchase VFF at a much lower rate with credit card sign up offers. Eg Virgin Money's $65 for 100,000VFF comes out at ~$0.00065 per point.

As Brizz says, you need to look not just at the cost to you of acquiring the points, but also on the value you get for them upon redemption. Wise redeemers can get at least 2c value per point on premium cabin flights - often a lot more.

Using the logic of the Virgin Money card - that is the best value card, not a typical value card. Most of them require more cash input for fewer points. So why not only do Virgin Money? The answer, simply, is that you can only do the Virgin Money one every 16-18 months and if you want more points, you have to pay more for them.

There is also the emotional value associated with redemptions. Saving the points and redeeming on a premium cabin flight is a lot more fun than getting free tins of soup each week. In my case, I use points to access flights and cabins I could never justify buying with cash.

 

[Mr H]

Would you have otherwise really paid $5,841 if you didn't have any Velocity points?

Or is it more likely for example that you would have paid $2,000 to fly Etihad instead, in which case your points are really only worth 1.35c each.

That is a very fair question that I have spent a lot of time pondering. I suspect the answer is somewhere in between. You can't really claim full value for something you would never have paid for with cash, but at the same time you can still value it more than the lesser product you might have paid for. I reconcile it by valuing points as granting access to an experience rather than as a direct substitute for money. This is helped by redeeming on crazy multiple-carrier itineraries on obscure and convoluted routes that are impossible to price.

 

[levelnine]

As Brizz says, you need to look not just at the cost to you of acquiring the points, but also on the value you get for them upon redemption. Wise redeemers can get at least 2c value per point on premium cabin flights - often a lot more.

Using the logic of the Virgin Money card - that is the best value card, not a typical value card. Most of them require more cash input for fewer points. So why not only do Virgin Money? The answer, simply, is that you can only do the Virgin Money one every 16-18 months and if you want more points, you have to pay more for them.

Thanks for your reply.

I think this is an area where many people go wrong. It is not only the value of redemption that matters. It is also the cost of acquisition. If VFF cost you 1c to acquire and you redeem for 4c, that is great. But if VFF cost you 0.07c to acquire and you redeem for 4c, that is far far better.

Yes, the Virgin Money card is an outlier, but not by much. You can also acquire VFF at greatly reduced rates compared to FB through pretty much every bank in Australia: The Ultimate Australian Credit Card Points Transfer Matrix

But if you can't or don't like credit card churning, I can see the value of FB. I was just trying to understand if there's something I'm missing vs credit cards.

 

[Mr H]

Thanks for your reply.

I think this is an area where many people go wrong. It is not only the value of redemption that matters. It is also the cost of acquisition. If VFF cost you 1c to acquire and you redeem for 4c, that is great. But if VFF cost you 0.07c to acquire and you redeem for 4c, that is far far better.

Yes, the Virgin Money card is an outlier, but not by much. You can also acquire VFF at greatly reduced rates compared to FB through pretty much every bank in Australia: The Ultimate Australian Credit Card Points Transfer Matrix

But if you can't or don't like credit card churning, I can see the value of FB. I was just trying to understand if there's something I'm missing vs credit cards.

Credit card sign-up deals usually offer great value but there are only so many credit cards out there and most of them have lock-out periods between bonuses. They are also usually only available to people with incomes above a certain level, which can make them hard to access for people on modest wages, retirees or people with insecure incomes.

I do not doubt that Virgin Money sign up bonuses offer better value than Flybuys redemptions.

But I still contend that redeeming Flybuys - which I get anyway - offer better value on Velocity points than on tins of soup.

 

[Brizz]

Would you have otherwise really paid $5,841 if you didn't have any Velocity points?

Or is it more likely for example that you would have paid $2,000 to fly Etihad instead, in which case your points are really only worth 1.35c each.

I'd look around for sure. There are airlines I prefer to fly however and I will pay more for them if I have to - but not a ridiculous amount more.

Etihad right now for the same dates I used above is over $8k however...



I know you can get 140k points for $64 at the moment - I have already applied. This takes time however - the points don't suddenly appear - its a 4-5 month process and you cant do it every year with the same providers.

Flybuys tops me up to the required levels for my current redemptions, and I am working on a '24 trip now.

Whenever I have enough points for 2 x Business to Europe or the US I use them - some years this is easy (via Credit cards etc) and some years I use whatever means necessary to get the points. FB for example.

 

[lovetravellingoz]

That is a very fair question that I have spent a lot of time pondering. I suspect the answer is somewhere in between. You can't really claim full value for something you would never have paid for with cash, but at the same time you can still value it more than the lesser product you might have paid for. I reconcile it by valuing points as granting access to an experience rather than as a direct substitute for money. This is helped by redeeming on crazy multiple-carrier itineraries on obscure and convoluted routes that are impossible to price.

Yes somewhere in between.

You cannot just value things on the most frugal example. For if you did you would not travel in the fist place. You would just stay home, which would be still living your parents, sipping water, eating baked beans and watching travel shows as the most frugal way to get a travel hit.

We all live a mixed back of indulging in some treats and luxuries, while being more economical in other aspects. The mix is different for each of us as we all enjoy different things. ie For some they want a "luxury" car whereas others are ok to just drive a "rust-bucket". But very few of us would be content with a life where everything in it was just the cheapest option.


For myself the advantage of FF points is that I get to enjoy luxury flights at a bargain based cost. Yes I could go with Y, or even buy Y........but when I can redeem in J or F for a fraction of buying long-haul Y why would I?

I remember reading once that "The Pudding Guy" stuck with redeeming more Y flights over redeeming less J flights. He personally just did not see the value in flying in prestige.

Whereas I personally would go with less J/F redemptions over more Y redemptions. Fortunately for several decades now that has been a moot point for myself as I was able to generate enough points for luxury redemptions for my wife and 3 daughters.


However things have changed for myself now as point running is not as lucrative as it was. ie In particular Amex halving their point redemption value, and then the even bigger loss of moving from mainly point based promos (which regularly were able to garner from 200K to 3 million points at a time) to the much less valuable cash back promotions. Plus ways to manufacture FF points are les these days.

In addition I have now retired which cuts off a number of avenues. Fortunately I still have a points stash for my wife and I to work through. But I can foresee in a number of years down the track that I will after decades of "free" longhaul leisure flights that I will shock horror have to actually start to buy long-haul flights again. Though that may be through buying points if there is a viable scheme about when I need to do so.

 

[Mr H]

This question was asked on Facebook:

Hi Velocity - why is your new promotion offering 15% bonus points on transfer from credit cards but only 5% bonus for Flybuys (or 10% if you switch on auto-transfer for the first time)? Why can't us Flybuys collectors also get 15% bonus?​

and got this response:

Hi Nick, thanks for your message. Bonus Points offer with our partners are given based on what the 2 programs have agreed to that will best benefit our members. We are looking forward to provide more offers in the future, so keep an eye on your emails, make sure your preferences are up to date in your Velocity account and check our website. Cheers! ^JS​

 

[Brizz]

I'm often amazed that people think that they are going to get a helpful answer to questions like these.

Whilst the response from Velocity answers the question and is probably true, it says nothing useful and that you couldn't have guessed anyway.

What was the asker expecting "Oh yes we are so sorry - we'll go fix that now!"

Yeah Nah!

 

[levelnine]

They are also usually only available to people with incomes above a certain level, which can make them hard to access for people on modest wages, retirees or people with insecure incomes.

Thanks again. Yes, that was my thinking. For those people fortunate to have good incomes and lots of credit card expenses, churning provides points at a far, far lower rate than FB and you'd only resort to FB if you ran out of credit card offers. But I can see the value proposition for people who are unable to access credit card churning.

 

[Mr H]

...you'd only resort to FB if you ran out of credit card offers...

With respect, I think you are perceiving an incorrect dichotomy. The choice is not between Flybuys and credit card bonuses. Given that you would be getting the Flybuys anyway, the choice is between Velocity points or Coles vouchers.

Business class flights or tinned soup. Let me think about it for a while...

 

[levelnine]

With respect, I think you are perceiving an incorrect dichotomy. The choice is not between Flybuys and credit card bonuses. Given that you would be getting the Flybuys anyway, the choice is between Velocity points or Coles vouchers.

Business class flights or tinned soup. Let me think about it for a while...

Only if you are unable to get enough VFF from credit cards & flying to meet your travel redemption needs.

If you are not in that position, the choice is between purchasing 1,000VFF for $10 from Coles and purchasing 1,000VFF for $0.7 from a bank.

$10 or 70c. An easy choice for me.

But as I said, not everyone is fortunate enough to be able to churn credit cards.

 

[Mr H]

Only if you are unable to get enough VFF from credit cards & flying to meet your travel redemption needs.

If you are not in that position, the choice is between purchasing 1,000VFF for $10 from Coles and purchasing 1,000VFF for $0.7 from a bank.

$10 or 70c. An easy choice for me.

But as I said, not everyone is fortunate enough to be able to churn credit cards.

Not sure many people would ever feel they have "enough" points. I'm glad you do, though. Enjoy your soup.

 

[burmans]

Very little beats CC signup offers but you are still limited as to how much you can earn. For me it’s not a matter of one or the other, as with the taco ad, why not both! The fact that CC signups are a better option doesn’t mean that this is not a good offer in its own right and what else are you going to do with your Flybuys points?

 

[lovestotravel]

Very little beats CC signup offers but you are still limited as to how much you can earn. For me it’s not a matter of one or the other, as with the taco ad, why not both! The fact that CC signups are a better option doesn’t mean that this is not a good offer in its own right and what else are you going to do with your Flybuys points?

Get tins of soup

 

[lovetravellingoz]

Very little beats CC signup offers but you are still limited as to how much you can earn. For me it’s not a matter of one or the other, as with the taco ad, why not both! The fact that CC signups are a better option doesn’t mean that this is not a good offer in its own right and what else are you going to do with your Flybuys points?

Yes I just grab points whenever I can. They all add up. Velocity, KF, QFF, Flybuys, Woolworth Rewards, Hotels, Cashrewards/Shopback

With Flybuys for most if collected you get to earn them in addition to CC spend, and CC churn.

Plus Woolworth Rewards Points, Points for sign-ups etc etc.

I only do not collect points if it is not worth my time or effort to do so. ie Like most of the Surveys. Though BMI surveys used to be quite lucrative.
But Flybuys is just swiping when you are swiping your CC anyway, or is already entered in your payment profile.

A lot of my alcohol I buy at present on First Choice Promos. Sometimes one can stack all, or some of, Flybuys Bonus, Shopback, Amex Cashback and a First Choice % off all at once.

 

[levelnine]

Not sure many people would ever feel they have "enough" points.

I think that is a very unwise attitude to have, but each to their own. Points are a terrible currency to hold because they can be devalued in many ways without any notice whatsoever — not only in terms of 'enhancements' to the cost for points redemptions, but the risk of carrier insolvency (as we saw during COVID-19), inability to redeem for flights due to a lack of availability, expiry, comparative devaluation through flooding the market with more points through larger credit card offers, etc etc etc.

The secret to beating the airlines at this game is to earn and burn in quick succession — having more points than you need is a recipe for bitter disappointment. Way too many stories of people getting burned holding Ansett points at insolvency and, more recently, Alaska Miles that are now expiring and are next to impossible to redeem.

what else are you going to do with your Flybuys points?

Cash. That's what prompted my initial question. I couldn't see the value of converting 2,000FB to 1,000VFF when instead I could convert those 2,000FB to $10 and buy the 1,000VFF for 70c from a bank.

But very happy for other people to do that. If FB redemptions help keep the VFF program profitable and therefore afloat, all the better for me .

 

[Tiki]

After losing 2 years to Covid, I have pretty much gone through my stash of points booking Y. I did cram 4 trips into 2022 to try to make up for it. I am retired and even before that not a high income earner so I was shut out of credit cards, just hanging on to a Amex Plt edge and a Westpac rewards. It’s infuriating that people with a proven track record of over 20 years 100% pay on time are shut out of this opportunity. All I have are Coles, Woolies and occasional bonuses like Shop Small. I still do reasonably well by using the spend X 4 weeks/ 10,000 Flybuys and swapping insurance products around once in a while. During the 2 years of Covid I got enough Flybuys for 2 tickets to Fiji and enough Woolies/QF for RT to Istanbul twice in Y. It takes a lot of organizing and flexibility with shopping but worth it.

 

[Brizz]

I'm enjoying this discussion. Lots of good views.

The secret to beating the airlines at this game is to earn and burn in quick succession — having more points than you need is a recipe for bitter disappointment. Way too many stories of people getting burned holding Ansett points at insolvency and, more recently, Alaska Miles that are now expiring and are next to impossible to redeem.

If the need is to get to the next reward quickly so points aren't devalued - and that's a possibility I guess - then surely any method to get your points up is a good one?

On that basis 'wasting' points on Mr H's cans of soup seems a poor use?

I guess you have to be able to use the points (take the flight), otherwise your possibility of a devalue could kick in, but points stored anywhere could have that happen - even whilst you are saving for your next can of soup.

 

[Mr H]

Points are a terrible currency to hold because they can be devalued in many ways without any notice whatsoever — not only in terms of 'enhancements' to the cost for points redemptions, but the risk of carrier insolvency (as we saw during COVID-19), inability to redeem for flights due to a lack of availability, expiry, comparative devaluation through flooding the market with more points through larger credit card offers, etc etc etc.

We all have different values. I invest as much emotional value in points as I do a financial value.

I am not a C-suite executive; I do not do an important job; I am not rich; I no longer travel for work. Like so many people, I have probably not achieved my full potential in life.

But I do have a salary that (just) allows me to access credit card bonuses and be able to spend them on exciting leisure trips. I have flown in F on five airlines and in J on several more. I could/would not have done that on revenue fares. I get treated like a VIP at the airport and on board planes. For a short while, I get to feel special. I live for my infrequent leisure travel. Some people may think that's a sad existence, but I have the self-awareness to know that it is my reality.

As Covid hit, some people made valid choices to cash out miles for JB Hifi gift cards or wine fridges. I stayed put. I argued at the time that the hope of future premium cabin flights outweighed the guaranteed value of consumer goods. I am glad I did. I have a mega-OWA booked with stopovers in Sri Lanka, Belfast, Tehran, Tunis and Amman. I am planning a *A redemption to Somalia next year. I have enough points in various pots for another seven RTW/OWA type redemptions in J. And I am still churning and earning.

The secret to beating the airlines at this game is to earn and burn in quick succession — having more points than you need is a recipe for bitter disappointment. Way too many stories of people getting burned holding Ansett points at insolvency and, more recently, Alaska Miles that are now expiring and are next to impossible to redeem.

I agree in the short term. But that assumes you will always have the same capacity to earn points. I work in an insecure job and I am always one restructure away from redundancy. I am old enough that if I got laid off, I would not easily get a job at my present salary. Even if I did get to work until a retirement date of my choice, my years of being able to acquire credit cards are finite. I want to have a stack of points to enjoy in retirement. Maybe I will lose them all in an insolvency event - although the oft-cited example of the Ansett insolvency was 20 years ago and Velocity, at least, is structured differently to the Ansett program. But I get so much pleasure on a daily basis spending these miles in my head, and the value I attach to being treated as a VIP for those few short hours at the airport and in the air, make it a currency that I value far more than dollars.

Money is necessary, it is nice, but it is so damned transactional. Who wants to define their dreams on a balance sheet?