The true power of miles and points redeemed towards travel is not in saving travelers money, but in offering them freedom.
What freedom are we talking about?
It’s the freedom to make changes to itineraries at moment’s notice or take your friends and family for a dream destination vacation. And as for savings, it’s saving us additional money that we might’ve had to have spent otherwise to either pay full price on bookings and/or charges incurred in changes.
But it’s so restrictive most of the times!
And you would not be false in making that statement. We all feel the brunt of airlines or hotels blacking out the most popular dates or as coincidence might have it, the very dates we pick to travel.
It can feel like there is always a reason that you can’t use your miles or points, whether those restrictions are imposed by the airline (availability limitations) or self-imposed (desire to get maximum value). To a certain extent, this is true and harsh reality we live in.
So where or how do you get the most value/savings?
You may hear or read on other platforms how people went on $5000 trip spending mostly points and paying whatever the taxes were (~$100 or so for sale of this example). If they redeemed 20,000 points towards their flights and hotel stay, they have saved whatever they would have paid to take that trip out of pocket which is likely substantially less – and less attention-grabbing.
Maybe meeting the minimum spend on a card gave you those bonus points – those expenses were ones you were anyways going to incur. By virtue of that, you got a trip you did not need to shell an additional $5000 for out-of-pocket.
Miles and points definitely represent tremendous savings and value – but that’s not their superpower. Strategic buying, cashback credit cards can achieve some similar results.
Freedom – what we all desire more of!
It’s the ability to invite people we wish to travel with on a moment’s notice without having to deal with the fact additional money leaving our accounts – burning a hole and instilling that sting is what that freedom feels like.
We get the opportunity to experience the millionaire lifestyle, make choices we otherwise wouldn’t if we had to pay out of pocket and that’s where the value proposition is created.
The best example that comes to mind is comparing a Lexus sedan vs a fully decked out Ford sedan. Both are cars similarly spec’d in the sense of basic options they have to offer but for obvious reasons one is a reliable luxury car which has a certain feel as well as value proposition to it that the other simply doesn’t offer.
Having the freedom to go anywhere, any time with minimal to no additional cost to you is far more valuable than getting 2-3% cash-back on your spend.
If you are not the traveling type of person, then cash-back does make the most sense (but we wouldn’t recommend only to focus on one thing and instead diversify your approach).