Best Time to Redeem Your Frequent-Flyer Points? Now!

For close to 15 years, I’ve been preaching a simple strategy for getting maximum value from travel loyalty programs: Redeem earned points sooner rather than later.

That’s for a simple reason. A mile or point redeemed today is almost certainly going to have more value than a mile or point redeemed next week or next month or next year.

That’s because the long-term trend among travel rewards programs has been toward ever-escalating award prices. And as award prices rise, the value of miles and points declines.

Conversely, hoarding miles—as many do, with the vague idea in mind of using their miles in retirement for “dream trips”—is a sucker’s game. It’s akin to holding a stock that’s declined in price since you bought it, and is expected to continue losing value indefinitely. The smart move, for both mile-collectors and investors, is to cut the losses and cash out now.

So, what’s changed today? Absolutely nothing.

The 2013 award-price changes announced by Hilton, Marriott, Starwood, and Wyndham are just the most recent reminders that miles and points are in constant danger of devaluation. All the changes amounted to overall price increases; in several cases the increases were precipitous. Program members with the largest account balances stand to lose the most when the new higher prices take effect.

So much for the rewards of loyalty.

In addition to the prospect of rising award prices, there’s another specter looming on the horizon for airline programs. If there is a move by Delta and the other full-service carriers to convert their programs from traditional mileage-based schemes to revenue-based schemes, like Southwest’s, the value of miles earned under current program rules will be seriously undermined as the opportunity to get 3 cents or 5 cents or more per redeemed mile by cashing in for pricey tickets is taken off the table.

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There’s no relief in sight for mileage collectors. On the contrary, all signs point to a continued worsening of loyalty programs’ value proposition.

And that, once again, should be taken as a “sell” signal by program members.

What to do?

• Stay focused on short-term goals.
• The fewer miles or points in your account, the less you’ll have at risk when the inevitable negative program changes take place.
• If you have enough miles for a trip, put in for vacation time and take it.
• If you’re short of an award level, focus on reaching it (a credit card sign-up bonus, perhaps?) sooner rather than later. Redeem. Begin again.

Reader Reality Check

Are you a mileage hoarder?

What’s your plan for using your miles and points?

This article originally appeared on FrequentFlier.com.