So, guys and gals, today is the big day. I’m talking, of course, about the fact that Southwest schedule will finally be open through January 7th. At last, people can book their family visits over the upcoming winter holidays. Go do it as soon as the flights are loaded because you can always cancel and rebook without penalty.
I’ve been eagerly anticipating this extension, but not because we plan on flying anywhere during that time period. My sister-in-law booked a cruise departing from Puerto Rico at the beginning of December. Obviously, getting to San Juan by air is the only logical option. And Southwest is the most convenient choice because they have direct flights from Tampa and Orlando. So, assuming the schedule is extended as promised (I’m writing this post on Wednesday), we’ll be burning some Rapid Rewards soon.
Originally, my sister-in-law wanted to just pay cash for flights. Never mind the fact that she currently has 70K Southwest points at her disposal. I asked her what her reasoning was, and she said she wants to save them for potential future flights (just in case).
Are you also hoarding points for a rainy day?
Don’t, especially if you have to pay cash for flights and hotels right now. I understand that many folks like to have a nice stash of miles and points, but it’s counterintuitive to do so at the expense of draining your savings account. The whole point of participating in this hobby is so you can save cash on travel. Dollars (the real kind) can be invested, Southwest points can not. They also tend to devalue over time.
In fact, I can say with absolute certainty that your Rapid Rewards points will never be worth more than they are today. The same can not be said about cash. Yes, inflation is an issue, obviously. But you can invest cash, put it in a high-yield savings account or chase various bank promos that require certain level of deposit.
Obviously, I’m not saying you should burn points like there is no tomorrow. Sometimes it makes sense to hold on to them if you think they can be utilized in a more advantageous manner in a near future. You should always look at your basis, as in what you paid for those points in the first place. No, I’m not talking about personal speculative value, but what you actually paid for them with cold hard cash. Did you have to meet minimum spending requirements on a new sign-up bonus? Then perhaps you shouldn’t be overly picky about redemption value.
Regardless, cash should always be spent last if at all possible. This is especially true if you are a person of limited means. Let’s face it, it’s a different ball game when you have few thousands in a savings account compared to those who have hundreds of thousands. Surely we can all agree on that, right?
Please, don’t speculatively buy IHG points!
Unfortunately, you can’t change the way people do things. You can reason with them till you are blue in the face (like I’ve been doing on this blog for the last 4 years), but they will do what they want to do. Each and every time. And that’s OK. Miles and points decisions are not life and death matter. Thank goodness!
Something I blame myself for is introducing my sister-in-law to IHG world. She is in love. Granted, she’s been able to get good value out of her redemptions so far. However, IHG is a risky and unpredictable program to invest in speculatively. And that’s exactly what she has been doing recently, like buying 300K IHG points via Daily Getaways for 0.56 cents apiece.
I tried to convince her to skip it, and that I should be able to get them much cheaper via various promos. But it made no difference. She still went ahead and bought the darn points with no clear goal in mind. Well, aside from our trip out West next year, which may or may not materialize. IHG runs this type of sale regularly, so there is literally no reason to hoard points a year in advance. But whatever. It’s done.
Back to Southwest schedule extension. As I’ve mentioned earlier, she was planning on buying flights with cash. I offered her a trade. How about you let me use part of your IHG stash for four nights at Holiday Inn Club Vacations Orlando-Orange Lake Resort and I will book your tickets with my Southwest points?
At the moment I’m almost out of IHG points and wasn’t really planning on taking my parents to this particular resort. However, this seemed like a good solution and a win-win for everyone. I needed four nights in Orlando at a hotel with a waterpark and lazy river, and my sister-in-law needed flights to Puerto Rico. She accepted my offer.
This resort is a pretty good deal on points, especially if you have Chase IHG co-branded credit card (like my SIL does). She will get 10% of points back, so the true cost is actually 31,500 points per night. In exchange, we’ll be getting a 2-bedroom/2-bathroom unit:
Note that paid rate quoted here is pre-tax and non-refundable, as with points you get far more flexibility. With young kids it’s always a good thing. By no means am I suggesting you should purchase IHG points with the idea of redeeming them at this resort. There are many other good options, and I plan to put a post together on this topic in a near future.
But in this case, I have a boatload of Southwest points, my sister-in-law has a boatload of IHG points. And neither one of us has a specific plan to use them. Though if I had to choose, I would pick Rapid Rewards every day of the week and twice on Sunday. But it’s my sister-in-law and I don’t like the idea of her paying cash if she doesn’t have to. We usually consider miles and points a common “property” anyway. If my in-laws need them, I don’t hesitate to use what I have. And vice versa.
The question on whether your should hoard certain miles/points currency is not an easy one to answer. That said, I definitely don’t think you need to be speculatively buying IHG points for 0.57 cents apiece. That’s way too high. See my post Using Hotel Hustle Data When Speculatively Accumulating Hotel Points
Any time you purchase hotel currency or accumulate it via promos, you are trading highly flexible points (aka cash) for highly inflexible ones. One exception: SPG program, but it too, has issues. When did you last hear of someone redeeming SPG points for an Amazon gift card? I thought so.
Personally, I’ve burned through my IHG stash, and maybe I should have been a bit more careful with it. As crazy and unpredictable this program is, it is consistently most useful for our needs. That said, my sister-in-law told me she would buy IHG points regardless, and will do so again in the future. So I guess we can always trade!
P.S. Speaking of Southwest, make sure to read this article on Deals We Like blog Do NOT Change a Southwest Flight-Cancel Instead! If you use points for a domestic flight, it’s not a huge issue, otherwise, this new quirk is a big deal.
Leana is the founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.