The Danger of Hoarding Points

[justinbrett]

I've been SG for quite a few years now, and having been flying with Qantas/ow almost exclusively since the collapse of Ansett (was previously an AirNZ Air Points member).

I'm about to click over 400,000 points, and while I'm sure there's many people with way more points than me, I'm starting to feel like this is probably too many points to hoard.

As far as I can tell, the most likely danger to my points is QF selling the FF business, which could make rewards cost more. If Qantas simply gets rid of it, they have to give six months notice, which should be enough time to get at least some value out if it (would have to be other ow airlines as you'd expect QF seats to dry up very quick).

A more serious threat, to me at least, would be for QF to leave ow.

But the most serious threat is for QF to wind up entirely. That's pretty unlikely, though I did say the same about Ansett.

Just wondering - should I be concerned about having a large number of points, or should I start burning them? I do use them for J upgrades from time to time, but i don't fly intl much and rarely see the use in domestic.

 

[opusman]

Start burning them on JASAs and aim for WP / LTS / LTG would be my suggestion!

 

[yohy?!]

of more immediate threat to the value of your points is rising taxes and fuel surcharges that stealthily devalue them over time!

 

[jono88888]

Another big threat to your points is if you stop traveling for whatever reason and they all expire.

 

[lovetravellingoz]

Another big threat to your points is if you stop traveling for whatever reason and they all expire.

With QFF that is not really a threat, let alone big threat, as there are so many ways (ie Everday card at Wooworths )to very cheaply earn small amounts of points that then extend all points already earnt for another 18 months.

With other FF programs it is more of a concern. ie Krisflyer where any point earnt has a shelf life of 3 years (though can be extended at a cost for a period).

 

[lovetravellingoz]

I'm about to click over 400,000 points, and while I'm sure there's many people with way more points than me, I'm starting to feel like this is probably too many points to hoard.


Just wondering - should I be concerned about having a large number of points, or should I start burning them? I do use them for J upgrades from time to time, but i don't fly intl much and rarely see the use in domestic.

Well to me the key word is hoard. There is no point keeping them for flights if you will not be likely to use them in a reasonable period of time.

However IMO I would not just "burn" them for the sake of "burning" them either.

While 400K sound large. It is not say two OW RTW award tickers via QFF.

There is very small risk of losing the 400K, a small risk of them being devalued substantially before you can lose them....but equally a guaranteed loss if you just blow the points now on something of low value.

In my case I am sitting on over 2 Million points in various programs (3 Million if you c, but with redeeming up to 5 J long-hauls once or twice a year for holiday travel I am comfortable to sit on several years supply. Yes I could use it up quicker on more F tickets (though number of pax per flight is a limitation).

My limitation is that I am keeping them for holidays, and as I am working I only have so much time for recreational travel.

However I do spend my points on my children , and a few others sometimes.

J redemptions for me represent excellent value, despite fuel fines. However the fuel fines do mean that I am not tempted to use the points for very short breaks for international trips. 2-3 weeks is my minimum.

 

[CaviAck]

Currently sitting on about 55k points, probably going to burn them on YASA's to ferry me between SYD and CNS to minimise my out of pocket expenses if I need a ticket and there's no sale fares.

 

[Joshua]

Possibly a useful calculation is the ratios between your earn, burn and total. I was for a while 1:1 for earn/burn with a large cache for future but now earning more than I can usefully spend. Have spent about 25% of my total in the last 12 months but earned well over that.

 

[Pushka]

We had about that many points when Ansett folded plus a couple of award bookings booked for Christmas travel. Lost the lot. (This thread is about losing points so please don't respond with "how about the people at Ansett who lost their jobs " etc as someone did once before).

 

[burmans]

With QFF that is not really a threat, let alone big threat, as there are so many ways (ie Everday card at Wooworths )to very cheaply earn small amounts of points that then extend all points already earnt for another 18 months.

Agreed, very few of my QFF points (or US, AA, United, SQ, etc. .... points for that matter) come from flying!

 

[Boris spatsky]

I just burnt 400K QF points on 2 JASAs to HKG. Booked in July when QF looked doomed and i wanted to use the pts. Didn't need to go to HKG but was a great holiday and got me back to WP again

I don't like hoarding them in the current QF climate.

 

[RWJ777]

In economics there is a notion called time value of money which basically means that if you park your money in a static asset, it loses value compared to what you could be doing with it (different from opportunity cost).

With that in mind, is there a 'time value of points'? Do points depreciate? Do flights tomorrow cost more points than flights today?

I'd be interested in people's views here, especially from a historical perspective, as I suspect - but do not know - that over time airlines have ratcheted up the points required for flights, thus depreciating pre-earned points.

 

[lovetravellingoz]

Didn't need to go to HKG but was a great holiday and got me back to WP again

I don't like hoarding them in the current QF climate.

I am not sure about your logic of burning points to save losing them, when the outcome is status on the airline you are worried about going kaput!

Which is of more value with a kaput airline - points or status?

As an aside when Ansett went under, my diamond status was recognised by other *A airlines till Jan 31. The lounge in Cairo was not too sophisticated and so my Ansett Card still gained my family entry in Feb, but no go in Dubai and Singapore.

 

[fersea]

I think there is no simple answer to your question without asking a number of other questions.

Do you want to go anywhere?
Can you afford to go away (forgetting about the flight costs - can you afford it in terms of either the other costs or time)
How do you pay for your travel now?

If you do want to go somewhere, and can afford to do it, I would suggest you do it on points rather than pay. Now of course as is shown on this site, a business class long haul flight is much better value than say 8K pts to fly Sydney to Melbourne with taxes more than a Jetstar or Tiger flight but in general why not use them.

There is a lady here at work who continues to buy business class fares to London and has about 500K points. She believes (and it doesn't matter how many times I tell her) that if she maintains a large point balance she will become Platinum (she is Gold). I tell her to use her points and save the money but she won't listen.

Qantas leaving One World is my worry - but if they stay this year (which you would think they will), I will book my RTW trip and presumably they will still have to honour flights for 2014.

 

[fersea]

Of course the danger of hoarding anything is that life can take a turn for the worse and you never get to enjoy what you have hoarded.

 

[fersea]

In economics there is a notion called time value of money which basically means that if you park your money in a static asset, it loses value compared to what you could be doing with it (different from opportunity cost).

With that in mind, is there a 'time value of points'? Do points depreciate? Do flights tomorrow cost more points than flights today?

I'd be interested in people's views here, especially from a historical perspective, as I suspect - but do not know - that over time airlines have ratcheted up the points required for flights, thus depreciating pre-earned points.

Most on here would argue that the benefits of Frequent Flyer programs have diminished over time. However points today have probably never been so easy to earn.

 

[lovetravellingoz]

In economics there is a notion called time value of money which basically means that if you park your money in a static asset, it loses value compared to what you could be doing with it (different from opportunity cost).

With that in mind, is there a 'time value of points'? Do points depreciate? Do flights tomorrow cost more points than flights today?

I'd be interested in people's views here, especially from a historical perspective, as I suspect - but do not know - that over time airlines have ratcheted up the points required for flights, thus depreciating pre-earned points.

The problem with FF points, including CC points, is that you cannot convert them to an equal value alternative asset class compared to a long-haul flight redemption in J/F.

So yes I could minimise the risk of an airline or CC program failing by getting say Gift Cards. But that would mean securing only say a return of 1c per mile vs say 5-12 c per mile for a flight redemption, which to means a guaranteed loss!!

In effect I can afford to lose some points from an airline going under and I would still be in front.

One thing I do do manage my risk, is that I spread my points around.

I warehouse some on credit cards and do not move then to an airline program till I need to (this also allows me to take advantage of transfer specials, and to move points to airlines that have redemption specials), and also accrue points on different FF programs directly from other means.

Apart from minimising the risk of any one airline or CC going under, it also delivers the very real benefit of allowing one optimise your "earn" and "burn" opportunities.

 

[JessicaTam]

I have about 50k points and tend to build up to 100k before whittling them down again. One day I will save up for a longer JASA, but at the moment the earn/burn rate is fairly much the same.

Incidentally, as from May 1 this year the QFF program notice period is going from six months to three.

Frequent Flyer - About the Program - Terms & Conditions

Edit: section 3.2

 

[lovetravellingoz]

Qantas leaving One World is my worry - but if they stay this year (which you would think they will), I will book my RTW trip and presumably they will still have to honour flights for 2014.

I think history tells us that any booked trip will be honoured.

ie with BMI leaving *A recently.

When Ansett went under I had only a fortnight prior redeemed 500K of points on 5 Y returns MEL-CAI on SQ with the flights not occurring till Dec and Feb. All flights were honoured. Initially they said not changes, but I ended up being able to bring forward my CAI-SIN flight and to change it also to a stop-over.

 

[opusman]

I think it's pretty unlikely QF will go under or leave OW. Things aren't that bad!