Inflation is chipping away at my travel rewards points. How can I make the most of them? - Toronto Star

3 months ago 24

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In 2017, a report from Bond Brand Loyalty estimated Canadians were sitting on $16 billion in unused rewards points.

While travellers may be inclined to save their rewards for a big-ticket item, one expert recommends cardholders “earn and burn” their points.

By Joshua ChongStaff Reporter

Mon., June 20, 20221 min. read

Inflation isn’t just affecting the price of food and gas, but also the heft of those travel rewards points you have accumulating in your back pocket.

For many casual travellers, it seems that elusive goalpost of a free ticket is moving further away as the points required for a reward fare climb.

In recent years, many loyalty card programs have shifted from fixed to dynamic pricing, meaning the number of points needed for a ticket fluctuates with the market rate, says Barry Choi, a Toronto-based personal finance and travel expert.

While travellers may be inclined to save their rewards for a big-ticket item, Choi recommends cardholders “earn and burn” their points.

“Loyalty programs can change the value of points anytime. We have no control over that whatsoever, so if you can use them right away for something valuable to you, it’s definitely worth it,” he says.

A 2017 report from Bond Brand Loyalty estimated Canadians were sitting on $16 billion in unused rewards points — a figure that has almost certainly grown during the pandemic, when travel was largely halted.

While it’s unwise to use points just for the sake of it, travellers should accumulate points with a specific goal in mind and then redeem them, says Natasha Macmillan, Ratehub.ca’s director of everyday banking.

“Applying the points to cover your credit card balance or for smaller purchases that don’t require a huge number of points — that is a tactic that we are seeing people leverage today,” she said.

Despite the impact of inflation on travel rewards, Choi still believes such loyalty programs are worth it, especially compared with cashback cards, as they typically offer more perks and value when you redeem your points.

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