Here’s Why ‘Earn and Burn’ is the Best Strategy

We’ve known devaluations were coming for a very long time. It was obvious when I wrote ten years ago that I was afraid the great values wouldn’t last:

What if I can’t use 60,000 Cathay Pacific miles to fly British Airways business class to Europe anymore? What if 90,000 United miles no longer buys a business class ticket from the US to Australia?

I suggested that as more and more miles were printed, without a corresponding growth in airline capacity, we’d see devaluation. And truly outsized-value? I’ve always said that you should take advantage of the best awards, the ones that are orders of magnitude better than average redemption value, because they aren’t going to last.

Whenever I see real value, I assume it’s going to disappear.

I said that United’s award chart was ripe for devaluation at the time.

Take a simple comparison between Northwest and United.

Northwest is 100,000 miles in coach to Australia. United is 90,000 in business.

Northwest’s standard business award to Australia is 150,000 miles. That’s the price of United’s “rule-buster” equivalent. United offers last seat availability for the same number of miles that Northwest makes you scrounge for seats.

And indeed, two months later United announced a devaluation (with six months’ notice). Of course it’s a lot more expensive now, still.

  • Partner first class to Europe is 220,000 miles roundtrip. Before the 2006 devaluation it cost 100,000 miles.

  • Partner first class to Australia is 260,000 miles roundtrip. Before the 2006 devaluation it cost 120,000 miles.

This was Lufthansa First Class in 2006

I like Hyatt Gold Passport, I think it’s a strong program overall, but their most expensive properties have gotten.. much more expensive. Two years ago they added a redemption category 7. How long until we see category 8? After all, through the end of 2006 Hyatt had only four redemption categories. The Park Hyatts in Sydney and Tokyo were 15,000 points in December 2006. Now they’re 30,000 points,

View from the Park Hyatt Sydney

It’s much easier to earn points today than it used to be. That’s good, because it needs to be. But the releationship of the ease with which they’re earned to the cost of redemption is not an accident.

That’s why it’s always been a good idea to earn and burn — to earn points and then redeem them under the same award chart if possible, so that you really aren’t affected by devaluations. Then you go earn more under a new chart and redeem them under that same chart.

I don’t exactly follow my own advice, because I have too many miles for that. Fortunately I’ve earned them at a low enough cost per mile that I won’t really get hurt (too badly, I hope) and I earned them knowing that they’d be worth less in the future than when they were earned, so I could make the appropriate mental discounting when making a decision about travel providers and acquiring their miles.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. @Anon “ALASKA’s Cathay pacific awards?”

    No personal experience, but rumor has it that that those are already becoming difficult/impossible to book, at least in premium cabins. Hopefully Tiffany will say it’s not so…..

  2. Here’s why you’re wrong – it’s not much easier to earn than it was 2-3 years ago. It’s much harder.

    AMEX – once per lifetime signup bonuses.
    Citi – once per 24 months open/close per card family (AA, TYP, Hilton)
    Chase – 5/24

    add in revenue-based earning on AA, DL, UA, and WN. Minimum spending required for sign-up bonuses is also going up and MS opportunities for those that partook in them are going away.

    Earn and burn is dead.

    Please get a reality check Gary. Your readers might just be getting tired of your endless shilling, unwillingness to really call AA out, and affiliate-linked blog posts.

    The fanboys will say “stop reading, don’t comment” and sure, then all you’ve have left are your fanboys. Readership != revenue for you. You need us to click on your Affiliate Links to make money. Give us some real value and you’ll get more clicks.

  3. “That’s why it’s always been a good idea to earn and burn — to earn points and then redeem them under the same award chart if possible, so that you really aren’t affected by devaluations. Then you go earn more under a new chart and redeem them under that same chart.”

    Another way to say this is that miles/points program absolutely screw their loyal members who earn their points the old fashioned way, ie by doing actual business with them. So the only way to avoid that is to “play the game”: aka churning and MS. 😉

  4. Despite credit card companies making it harder to churn multiple cards from the same company, I don’t see airlines ever rolling back devaluations. At most, it’ll slow it down a few years but as sign-up bonuses keep going up, there’s printing currency issues from new customers just not the existing ones.

    The SPG Marriott combined program will likely have a huge devaluation on both sides

  5. “it’s not much easier to earn than it was 2-3 years ago. It’s much harder.”

    Which in fact makes VFTW, OMAAT, and F/T much more valuable. It takes a lot more research, and far better strategy now to build those balances. The only upside of which is that as the masses earn fewer and fewer miles/points, those of us with gigantic balances will find it easier and easier to book the awards we want.

    My take on this though is not ‘earn and burn’. It’s earn way more than you think you need, since award ‘prices’ will constantly go up. Those of us, like Gary, who accumulated literally Millions of miles back when it was easy pickings are still doing fairly well, even in the devalued programs. Those who played the game at a ‘reasonable’ level are SOL.

  6. Gary,

    You are also of the view that credit card rewards will plummet in the coming years as technology reduces interchange fees. Add this to the churning restrictions and death of MS opportunities and the “earn” part of earn and burn will be next to impossible except for business travelers. So points hoarding will be more beneficial for many leisure travelers.

  7. @Robert Hanson
    I read the Alaska forum on ft and they say similar. but today and yesterday I was able to book bos-hkg-syd , one F and one J. Alaska call center saw what I saw with ba tool. most seamless award booking I’ve ever had. tbh, I’ve only called ua aa sq ba to book.

  8. You can laugh all you want but I’ve gotten some decent value out of DL’s ongoing award ‘sale’. Less than 1/2 price for some tickets means I’m saving rather than holding onto lots of miles for trips I may never get to take. A bird in the hand…

  9. I have no regrets about any redemptions for the reasons you state. My only regrets are for redemptions that I was unable to do, such as the old DL Skymiles 75k F award to Hawaii (and I think that was for 2 seats!)

  10. The problem with the earn and burn strategy is that at the moment the non availability of SAAver international J awards and the ridiculous price (in miles) of anytime awards has resulted in a de facto additional devaluation. Much like a stock market crash, at this point it’s better to hold than to redeem. Can it get any worse?

  11. “That’s why its always been a good idea to earn and burn.” Gary proceeds to disprove this claim in the very next paragraph by admitting that he is an exception to his own axiom. Surely he is not the only one. That contradiction leaves many questioning his motives and credibility.

    In truth, the best course of action for each individual depends on facts and circumstances and goals and aspirations which are as unique as each individual. Gary’s one-size-fits-all strategy works for some but is clearly wrong for others.

    Are there alternative strategies? Tell us the pros and cons so we can understand the risks and benefits and decide what strategy is best for each of us.

  12. No need for the nasty or aggressive comments, if you find a post to be helpful, great, if not, maybe the next one will be. Gary’s blog, among others, has helped me to strategize which cards to open and which programs to follow. I’ve recently (as in the last month) booked a first class trans-pacific trip with multiple legs using my Alaska miles and if you are good at planning & research, you will find that there is quite a bit of availability. Popular destinations during peak travel periods, such as Australia during their summer, are harder to book in premium class, but it is not impossible. The process with the Alaska reservations folks was also easy and they are nice and helpful…especially so if you’ve already done the research ahead of time and know which routes/flights you want. I also fly Business class internationally with United or Delta miles at least once a year, so while those redemptions have gotten more expensive, they’re not impossible to earn or redeem, either. My wife and I are pretty average spenders and we don’t churn cards or manufacture spending. We’re slow and steady, and research which cards to open, take advantage of bonus point spending opportunities, and buy miles that we need when they’re cheap. My upcoming F class international flight took several years to earn, but with a retail value of over $17K, it’s well worth the patience and effort. And if my gratitude makes me a “fan boy,” then call me what you will…I’ll be enjoying my nice flight and hotel room, paid for by my points.

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