What is “Devaluation” of Miles & Points?
When it comes to travel rewards, one of the biggest fears for frequent flyers and loyalty program enthusiasts is devaluation. If you’ve ever saved miles or points for a dream trip only to find out you now need more than before, you’ve experienced it firsthand. But what exactly does “devaluation” mean, and why should travelers care?
Understanding Devaluation
In simple terms, devaluation happens when an airline, hotel, or credit card loyalty program reduces the value of the miles or points you’ve earned. This doesn’t mean your points disappear—it means they no longer stretch as far as they once did. For example, a flight that used to cost 50,000 miles might suddenly require 70,000 miles, or a hotel night that once cost 20,000 points could jump to 30,000.
Programs often introduce devaluations quietly, which can catch travelers off guard.
Why Do Loyalty Programs Devalue?
There are several reasons why airlines and hotels reduce the value of their rewards:
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Inflation and rising costs: Just like regular prices, travel expenses increase over time, and loyalty programs adjust accordingly.
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Increased demand: When more travelers redeem points, companies may raise redemption rates to balance supply and demand.
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Profitability: Loyalty programs are major revenue streams, so adjusting redemption charts allows companies to remain profitable.
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Dynamic pricing models: Many programs now tie redemptions to cash prices, meaning points required can fluctuate dramatically.
Examples of Devaluation
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Award Chart Changes: Airlines may increase the number of miles required for popular long-haul flights.
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Hotel Category Shifts: Hotels may move properties into higher categories, requiring more points for a free night.
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Dynamic Pricing: Instead of fixed rates, the number of miles needed can change daily based on demand and cash price.
How to Protect Yourself from Devaluation
Since devaluation is inevitable, the key is to maximize value before it happens. Here are some strategies:
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Earn and burn: Don’t hoard points for too long. Use them regularly before programs change.
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Diversify your rewards: Spread your earning across multiple programs to avoid being tied to one. Flexible currencies like Chase Ultimate Rewards, American Express Membership Rewards, and Citi ThankYou Points give more redemption options.
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Stay updated: Follow loyalty program news so you’re aware of upcoming changes.
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Look for transfer partners: Instead of locking points in one program, keep them in a flexible bank currency and transfer when ready to redeem.
Final Thoughts
Devaluations are part of the travel rewards game. While you can’t control when airlines or hotels reduce the value of their programs, you can control how you earn, redeem, and diversify your rewards strategy. The best approach is to use points sooner rather than later, keep track of program updates, and build a balanced portfolio of loyalty currencies.
By staying proactive, you can still extract maximum value and continue traveling for less.
