Why You Should Always Wait To Transfer Points

Discussion in 'Blogstand' started by BoardingArea, Jan 29, 2015.  |  Print Topic

  1. BoardingArea

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    By now I’m sure that everyone and their Grandma has heard about the upcoming devaluation to the British Airways Executive Club program, so I won’t recap it here. Instead, I want to discuss the optionality of miles and points programs, particularly flexible points currencies such as American Express Membership Rewards, Chase Ultimate Rewards, or Starwood Preferred Guest points. These currencies have inherent "transfer options" built into them, meaning that you always have the option to transfer them to other miles and points programs, sometimes with a bonus. As a result, these programs have a degree of optionality implicit in their programs, meaning that you are presented with a choice, perhaps one you weren't expecting. In this post, I plan to discuss lessons from the stock market, and in particular options theory, to managing our miles and points most efficiently. For roughly the past six weeks, the US American Express Membership Rewards program has had a promotion running whereby you receive a 40% bonus when transferring points to Avios. It’s the largest transfer bonus in several years and it’s set to expire on Jan 31, 2015, only a few days from now. Therefore all of us with Membership Rewards points implicitly hold options that entitle us to convert 1000 Membership Rewards points to 1400 Avios. We can choose to redeem these options, or we can choose to let them expire. (Sadly, we can no longer easily “trade” them to someone else since American Express only allows points transfers to authorized users on the account.) The post Why You Should Always Wait To Transfer Points appeared first on One Mile at a Time.

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