I’ve recently gotten several questions about whether the current promotion to buy Hyatt Gold Passport points with an up to 40% bonus is worth buying or not.  I wasn’t planning to write about the promotion as there are just so many “buy points” promos out right now that I am just not overly excited about, and that are getting decent coverage elsewhere.  However, given the number of questions I have received, I will post a bit about that promo and some other current similar promotions and most importantly how I decide whether or not to buy miles or points. 

First, here are some details on a few different current buy miles promos:

Hyatt Gold Passport: Buy points with up to 40% bonus

Ends August 18, 2014.  Available to Diamond and Platinum members.

  • Purchase 5,000 to 19,000 points and receive a 20% bonus
  • Purchase 20,000 to 39,000 points and receive a 30% bonus
  • Purchase 40,000 to 55,000 points and receive a 40% bonus
  • You may purchase Hyatt Gold Passport points in increments of 1,000 up to 55,000 points per calendar year.

Points as low as 1.7 cents per point with full 40% bonus.

US Airways: Buy miles with up to 100% bonus, targeted

Ends August 22, 2014.  Targeted and different versions of this promo are available.

• Buy 10,000 to 19,000 miles, get 50% bonus miles
• Buy 20,000 to 29,000 miles, get 75% bonus miles
• Buy 30,000 to 50,000 miles, get 100% bonus miles

Miles as low as 1.88 cents each with full bonus.

British Airways: Buy miles with up to 30% bonus

Ends August 31st.

  • Purchase 2,000 – 10,000 Avios for a 5% Avios bonus
    Purchase 11,000 – 15,000 Avios for a 10% Avios bonus
    Purchase 16,000 – 20,000 Avios for a 15% Avios bonus
    Purchase 21,000 – 26,000 Avios for a 20% Avios bonus
    Purchase 27,000 Avios, your full annual allowance for a 30% Avios bonus
  • Purchase up to a maximum of 27,000 Avios in any calendar year.

Points as low as 2.18 cents per point with full 30% bonus.

Those aren’t the only buy miles/points promos going on right now, but those examples are good ones to use for our discussion on how to decide if you should buy miles or points when these promos come along. 

1.  Do you have the money to spend?

The first thing to consider when deciding whether or not you should jump in on a “buy miles promo” is not deciding if it is a great deal, it is whether or not you have the cash to spend.  If you don’t have the cash right now to spend on such non-essential things, then nothing else matters.  Reading a bunch of travel blogs and hearing how great a deal a buy miles promo is can be dangerous to your financial health if you’re not careful.  A good deal can come along at a bad time and you need to pass.  I’ve certainly been in that position and it stings for a minute, but many of us are in this hobby to keep cash in our pockets, not spend it buying miles so don’t feel bad if you pass on a good deal.

2.  What are your plans for the miles?

If you have the money to spend then the next thing to figure out is what you plan to do with the miles, and what type of return will you get for them.  For example, the current Hyatt “up to 40% bonus” allows you to buy points for as low as 1.7 cents each which actually sounds like a decent price since I know I usually redeem Hyatt points for more than that, but think hard about if it makes sense.

Let’s say you want to redeem those points to ski at the Hyatt Escala Lodge in Park City, Utah.  During ski season rooms there can easily go for over $400 per night, and even soar over $600 per night on some days.  However the points price is 15,000 points per night assuming you can find base rooms available.  At 1.7 cents per point that comes to an equivalent of $255/night, which is a good deal compared to the ski season cash price.  You will also avoid the $20/night resort fee by staying on points instead of cash. That is a case where it can make sense to buy points to redeem for a much higher return.

Hyatt points example

However, if you just speculatively bought points at 1.7 cents you might end up redeeming them when you aren’t getting that same level of return.  For example, that same resort in Park City is selling for as low as $140/night on dates I checked in September, so if you spend 15,000 points a night on dates when the cash rate is so low, you would be losing money by having purchased the points.  You will also be missing out on earning points, so be sure to factor that in.

3.  How many points do you already have?

Using that Hyatt Park City example during ski season, it may seem that buying points if you have the money is a no-brainer, except it is not.  Let’s say you already have ten’s of thousands or even hundreds of thousands of Hyatt points or Chase Ultimate Reward points you can transfer to Hyatt at a 1:1 ratio.  If you already have a bunch of points, it may not make sense to buy, even with the money to spend and a good selling price.  Remember, miles are not investments that appreciate over time as they almost always lose value the longer you hold onto them.

Now, there are folks in the miles and points community who buy at a certain price regardless of how many points they already have in the bank.  I think I have seen that behavior with racks of paper towels and Spaghetti O’s in the basement on some episodes of Hoarders, too…  Personally I don’t think it usually make sense to buy when you already have tons in the bank unless the price is just so low that you are 110% confident you will get a good return for those points down the road.  At 1.7 cents per point I’m not a buyer unless my account is pretty low, and I have a specific plan for those purchased points.  However, if the price were 1 cent per point I might be a buyer even without a specific plan as I am certain I can get that type of return for Hyatt points.

4.  How easily can you access points other than buying them?

Let’s say you have the money to spend on the points, you have a need, and you don’t already have enough points in the bank for your desired redemption.  The last thing to consider is whether you can get the points cheaper via another avenue.  For example, can you sign-up for a credit card that will award the points via a sign-up bonus?  Can you transfer the points in from another program like Ultimate Rewards or Membership Rewards?  Can you earn them via another method that costs less?

If you can get the points via a more cost effective route than buying, then give that some strong consideration as most of us are in this hobby to save as much as possible, not just buy miles because they are “on discount”.  Don’t just assume that buying during a points sale is the best way to rack up points, because it often isn’t.  I think for most of us, buying is the best way to rack up miles only in pretty rare situations.  Remember that many miles and points bloggers who are always in on the buy miles promos are using those miles to fly in premium cabins around the world on a monthly (or more frequent) basis.  Unless you are also doing the same (and congrats if you are!), many of the sales will likely not make sense to jump in on.

Do you think through similar questions when deciding whether to buy?  Have you pulled the trigger on any recent buy miles/points promos?

Posted by Mommy Points | 7 Comments

7 Responses to “How to Decide if You Should Buy ‘Discounted’ Hyatt, US Airways Miles, and More”

  1. Christian says:

    A great article. Very insightful and thought provoking, which is exactly what we need to dampen the sometimes irrational enthusiasm that grabs us when we see a deal. Thanks.

    • Mommy Points says:

      Christian, wow I was just shooting for mildly helpful. Thought provoking sounds even better. ;) Some deals really can be the perfect deal for the perfect situation at the perfect time and are worth being excited about. I don’t want to dampen that – just want to encourage folks to pause and think before deciding it is the perfect deal. Thanks for the comment!

  2. DaveS says:

    I’m with Christian – great analysis here! I like to consider my long term past pattern of redemptions with a given program, to help determine whether it’s worth it to buy discounted miles and points. Most bloggers, when analyzing, tend to offer those best case scenarios – what you might be able to do with the points if the stars align perfectly. Much more pertinent is to be aware of the value of what you actually have done before, which is much more instructive in terms of what you’ll likely do in the future. That one spectacular redemption needs to be balanced against the run of the mill ones you do in deciding the true values.

    I rarely see any purchase promos to go for unless I really need those points right away for a redemption I have to get done soon.

  3. Stephen says:

    Great article, very practical. I would only buy points if I need to book an award in the near future.

  4. TM says:

    Now that Cash and Points is offered, I’m burning a ton of points (I have already booked 1 week Andaz Maui and 1 week Andaz Papagayo on C&P with DSU and still need to book 3 weeks total of PH Vienna and PH Tokyo/HR Tokyo/HR Kyoto.) Bookings cash and points and using diamond suite upgrade (I like the extra space for my family of 4) have made me want to purchase points for the 1st time. I totally agree that with any credit card sign-up, point purchase, it is best to have travel aspiration in sight. Example:

    Andaz Papagayo Spring Break 2015:

    1. Cash price: $550/nt x7 nights = $4785 inch tax/fees

    2. Point price: 15K/nt x 7nt x 0.017 (with this promotion): $1785

    3. Cash and point: $100 + 7500pts x 7 nights = $870 incl tax/fee + 52500 x 0.017 = $1770. Ability to use diamond suite upgrade with cash and point (as oppose to point only booking): $850 x 7= $7395 incl tax/fee

    Point stay alone is values at 3.6 in this case.

  5. DaninMCI says:

    Good post. Maybe a follow up on when cash and points is better than all points but I guess that depends on your cash situation as well. I’d also like to see you do a detail post on booing airlines for cash and upgrading which seems a bit confusing.

  6. Grover's Bathtub says:

    Nice post. Another consideration is whether there is award availability for the time/place you want to go. Otherwise, you may wind up paying cash for a ticket/room that you thought you were going to get with the points that you bought!

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