Points Save the Day – But Don’t Forget Diversification & Holds

In the last week, I’ve been chatting with my step-mom. In a bit of a rush, she booked 2 award tickets for her son and grandson to attend an important family event and did so at the 50k AA domestic AAnytime level. Paid tickets were ~$700 for an economy round-trip schedules that worked. I for one can get hung up on how much you should redeem a point for. If no other options existed (and since I don’t maintain AA status), I’d be hard pressed not to redeem for this ticket despite the fact that it’s only getting $.014/AA mile which is below the value I assign to my AA of $.016. It’s close enough and the prospect of laying out $1,400 cash unexpectedly is daunting.

So, points save the day. And sometimes there are things you just need to do.

Since talking with her afterwards, I think there’s an opportunity to illustrate two useful things.

Diversification

She’s flying into a small airport and booking with less than 21 days notice. And has a restrictive schedule. And prefers not to fly into larger airports that are 100+ miles away. That’s why she only found 50k AAnytime awards. Obviously being more flexible could help but not all trips allow that.

Diversification though could have really helped. Delta has a 40k “medium” domestic award with lots of flight selections (and even a 32.5k medium/low trip that may work). I believe and most agree that Delta miles are worth less than AA miles. So a lower cost Delta ticket when Delta miles are worth significantly less than AA is a real value here.

It’s best if you can hold a diverse points portfolio yourself. If you don’t though, remember that you may know others like, ahem, your step-son, that might be able to help you out in a pinch.

Holds

Sometimes though you need a commitment right away. Holds can be invaluable. This post from Gary @ View from the Wing summarized policies in January 2012 very well. They change over time so double-check before relying on them. In my step-mom’s case, she probably would have been best served by having AA put the award on hold first since they’ll allow a 5-day hold. During the following 5 days, she could have monitored for a lower cost AA ticket, looked at other options, or reached out to others that might be able to help. There’s really no reason not to use a hold when it’s available to you.

Similarly, most airlines allow a risk free cancellation when booked through their sites but make sure you know the policy. Delta definitely does. I usually don’t use 3rd party agencies like expedia.com so no comment on their cancellation policies. You can use this to your advantage too. For example, I’m working on getting 4 people to Minneapolis for labor day, most on the same flights. I’m also booking from 2-3 different Skymiles accounts. If one person books but the availability dries up before the second person books, it’s useful that the first person can back out.

I suppose the bottom-line here is to slow down when booking those awards. Buy yourself time and think creatively. There are so many paths to buying a ticket that even I need to sleep on it occasionally.

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