Should You Buy Miles and Points?

The idea of buying miles and points for flights and hotels sounds tempting, especially when those loyalty programs offer solid bonuses. But, is it really worth converting cash into points? While there are times when buying points can be a smart move, it’s smart to approach it with caution to avoid potential financial pitfalls. Here’s a breakdown of when it makes sense to buy points and when it doesn’t.

When to Avoid Buy Points

Buying points might seem like a quick way to stack up rewards, but there are some clear cases where it’s better to hold off.

No Specific Redemption in Mind

If you’re buying points without a clear travel plan, consider holding back. Points are like currency and are subject to devaluation by airlines and hotels. With no specific use planned, you risk sitting on points that could lose value without notice, which could cost you in the long run. Buying points "just because" is not a good idea.

Overlooking Real Costs

Sometimes, it’s easy to get excited about redemption values that seem high on the surface. But, high taxes and fees can diminish the true value of your points. For example, Virgin Atlantic’s Flying Club points might help you book a premium flight, but the added costs can reach thousands of dollars. In those cases, it’s worth comparing these expenses to what you’d pay in cash. Ask yourself if you’d willingly pay that amount if points weren’t an option.

Ignoring Opportunity Cost

When you buy points instead of paying for a stay or flight, you miss out on earning points naturally through spending. For example, using cash for a Hilton hotel stay could earn you more points through your status and promotions. Skipping this opportunity can alter the math, making the overall value of purchased points less appealing.

When You Should Buy Points

While we don’t usually recommend buying points, there are times when it can be financially smart.

Sales and Promotions

When airlines and hotels offer significant bonuses — often doubling points during limited-time sales — it can make sense to purchase points, as long as you have a specific trip in mind. When hotels or airlines offer those promotions, it’s important to know the redemption value compared to the normal purchasing price. Then, make your decision based on that math.

Buying Enough for a Redemption

Sometimes, you may be just shy of enough points to book a flight or hotel stay. I personally find this to be true almost every time I book with Southwest. In these cases, buying a small amount to bridge the gap can be worth it. Some airlines (like Southwest) require the entire booking to be paid with points. If you’re close to your target, buying a few extra points can help you avoid a cash expense for the whole fare.

Meeting a Credit Card Spending Requirement

If you're close to meeting the minimum spending requirement for a new credit card offer, buying points can help push you over that threshold. Instead of making an unnecessary purchase, convert some cash to points you plan to use. This approach helps you secure the bonus while also growing your rewards balance. And that’s what it’s all about, friends!

Examples of Buying Points

Let’s look at real-life scenarios to understand when buying points may offer value:

• Hilton Points Sale: During a past promotion, Hilton allowed people to buy points at a discounted rate. This strategy works well for someone who could book high-value redemptions while also conserving their transferable points (like American Express Membership Rewards) for other loyalty programs.

• Virgin Atlantic's 70% Bonus: Virgin Atlantic occasionally offers large bonuses, such as a 70% bonus for points purchases. But, this type of offer requires buying a substantial number of points and doesn’t always justify the investment when you factor in the redemption costs. You should consider whether you’d pay the equivalent cash value for that specific redemption. See the video above for more specific details.

Bottom Line

While buying points can be valuable in specific cases, most of the time, it’s not worth the investment. You should consider buying points when you have clear travel plans and when the math checks out. Otherwise, stick to earning points through spending, welcome offers, and promotions. This is usually the safer, more cost-effective option.

Before making any purchase, run the numbers and evaluate your redemption options carefully. With the right planning, you can use loyalty programs to unlock valuable travel without emptying your wallet.