They don't give us enough credit.
Americans have been accumulating credit card points in recent years, but points are losing value.
Cardholders accumulated $34 billion worth of points last year, an increase of 70% from 2019, according to annual reports from card issuers American Express, Capital One and JPMorgan Chase. The Wall Street Journal reported.
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Each point is worth about 1 cent, but since 2018, each penny has lost about 20% of its purchasing power, according to the Bureau of Labor Statistics.
So even if you earned 50,000 points on a major credit card in 2020, those points are only worth about 41,300 points today.
Credit card issuers have been more generous with their point offerings since the pandemic, increasing welcome bonuses instead of increasing the actual point value and offering more points on everyday purchases.
Amex Platinum and Gold cards will earn roughly twice as many points in 2024 as they did in 2017, and sign-up bonuses for Capital One Venture and Chase Sapphire Preferred will increase by 50%, WSJ reported. .
Things get even more complicated when it comes to transferring those points to frequent flyer programs or hotel loyalty programs.
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Each airline and hotel has its own method of scoring points, and many airlines and hotels are increasing the number of points required to book flights and rooms to keep up with price increases due to inflation.
The Department of Transportation launched a study in September into how airlines value points, but the results are not expected to affect point pricing for the time being.
For example, the average price of an economy flight booked with points has increased about 19% since 2019, according to aviation consultants. idea works.
To find the best deals, experts suggest using cards that allow you to easily transfer points and creating accounts with different partner companies.
Spending your points as soon as you earn them can also help reduce “point flation.”
Overall, travelers are encouraged to consider these changing values and be strategic about how they manage and redeem their points.
