When should a hack determine the fair trading price of points and miles?


Readers and fellow bloggers: please weigh in with your thoughts.

Yesterday, I proposed a method to determine “Fair Trading Prices for Points and Miles“. If you didn’t get a chance to read this post, please do so! If you only have time to read one post this month, this should be it! OK, just kidding about that, but seriously, take a look. In that post I proposed a way to use point earning credit cards as benchmarks for determining “fair trading prices” for points and miles. The idea is to develop and maintain a lookup sheet that people can use to help decide whether a bonus offer, hack, or deal is really worth doing. To-date, the sources of data for the chart are the prices charged directly by hotels and airlines for their points and miles, and the prices we pay indirectly to earn points and miles from credit card use. The question today is this: what if a readily available travel hack provides an easy and repeatable way to buy points at a lower cost? Should that hack, then, determine the fair trading price for those points? Let’s look at a few example hacks and discuss:

Priority Club

There is a well documented trick that allows you to buy Priority Club points for .6 cents each. See, for example, Million Mile Secrets post: Use The Priority Club “Points & Cash” Trick To Save 76% Off On Hotels. When putting together the fair trading prices table, I agonized over whether this trick should define the fair trading price for Priority Club points. Or, should we look at the best usual means for buying Priority Club points and see that this hack is a great deal because it beats that price? Do you see the dilemma? Ultimately, I went with the latter argument, but now I’m not so sure. Since this hack is easy and repeatable, I’m leaning towards resetting the fair trading price to .6 cents. My thinking is: if Priority Club ran a promotion where they offered to sell Priority Club points for .7 cents each, would I do it? The answer is very clear: No. I wouldn’t do it because I know that I can buy points for even less. So, for me, the fair trading price is .6 cents. Agreed?


Twice this year now, Delta has run a promotion that has made it possible to buy Delta SkyMiles for 1.1 cents each. Like with Priority Club, I struggled to decide whether 1.1 cents should be the fair trading price for Delta miles. Unlike the Priority Club hack, this trick is only available when Delta runs this promotion, so it doesn’t seem right to suggest that this be the benchmark. On the other hand, Delta has now run the promotion twice in a fairly short amount of time and so it seems likely that they’ll keep doing this whenever they see a need to raise revenue. My inclination right now is to wait and see. If Delta runs the promotion again early next year, then I’m inclined to make 1.1 cents the benchmark to go by. Until then, I’ll keep it as is. What do you think?

American Express Gift Cards

A common hack is to go through the Big Crumbs shopping portal to buy American Express gift cards. By going through the portal, you get 1.6% cash back for the purchase of those cards (and if you use my sign-up link I’ll get a very small % referral fee). With this trick, it is possible to reduce the credit card cost of points and miles by buying gift cards with your point-earning credit card and then use the Amex gift cards for the things you would have bought anyway. Should we reduce all of the fair trading prices because this trick is readily available? To me, the answer to this question is easy: No. You could also use this trick to reduce the cost of buying a pack of gum, but would you then think that the fair trading price for gum ought to come down 1.6%? Of course not. Since this trick applies broadly to everything, I don’t see it as a useful tool for setting fair trading prices. However, it is a fantastic tool to use to help ensure that you save money on whatever deal, trick, or hack you invest in.

For completeness, I’ll point out that people can do similar tricks using credit cards that give big category bonuses for grocery store spend (or drug store, or office supply store, etc.). People have been known to go to their local grocery store and use these credit cards to buy $500 visa, mc, or amex gift cards. In these cases, the credit card bonus can far exceed the service charge for buying those cards.

Another detail to point out: this trick could also be used with 2% cash back cards in order to effectively increase the standard return to 3.6%. Therefore, the cost of credit card points when using this trick should be benchmarked against 3.6 cents per dollar instead of the 2 cents per dollar that I’ve used so far. This, to me, is yet another reason not to muddy the waters by introducing a trick like this into the calculations.


Is there a rule we can develop to determine when a hack can be used to set the fair trading price of points? Do you agree with my tentative decisions shown above? Are there other hacks you would like me to consider? Please comment below! Once I’ve received enough feedback I’ll update the fair trading prices table and I’ll publish it as a fixed page on this site. Also, I will continue to update the table over time as new credit cards, offers, and hacks lead to changes in fair trading prices.

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