Credit Cards Travel Credit Cards

If You’re Hoarding Your Points, You’re Missing the Point

If you are saving and never redeeming your points and miles, you could be putting yourself at risk of devaluation and even theft.

By Brett Holzhauer

Edited by Becca Borawski Jenkins

Updated July 25, 2024

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Earning valuable miles and points from flying and using credit cards can open up endless travel possibilities. You can fly in first class and stay in luxurious hotels for much less than typical. Or, if you prefer economy travel, you can stretch your points to see more of the world.

Reward points provide the opportunity for anyone to see the world, but when we hoard these points, it doesn’t allow for that adventure to happen. In fact, keeping these points can actually be detrimental to the value of your points — not only do you risk your points becoming worthless due to devaluation by the issuer, but there is also an increased risk of hackers stealing your points.

In this article, I will detail why hoarding points isn’t a great idea, and easy and fun ways you can begin spending the points you already have.

In this article

The danger of devaluation of your points and miles
The danger of points and miles theft
So, why do we hoard points?
5 trips you can book with your big pile of points
How to build your points back up
Bottom line

The danger of devaluation of your points and miles

First, let’s define “points hoarding.” While there are various definitions out there, I define points hoarding as “earning significant amounts of points and miles without any plan or desire to redeem them.”

Unfortunately, this hoarding is actually what directly leads to the devaluation of points and miles. Companies like American Express, Delta Airlines, American Airlines, and Hilton Hotels all have robust loyalty programs that are a key component to their business. Loyalty programs are proven to keep consumers engaged with their brand and turn regular customers into loyal customers.

However, these brands must account for the value of all the unredeemed points and miles floating around in the world when running profit-and-loss spreadsheets on their business. The brands know the true internal value of these rewards points, and they have to be prepared in case everyone with outstanding points suddenly decided to cash them in. These companies must calculate for this as a liability when it comes to their bottom line.

For example, let's say Delta has 1.3 billion unused SkyMiles out in the universe. Now imagine all these points were redeemed at the same time. As the value of Delta SkyMiles is estimated at 1.2 cents each, that would mean over $15 million worth of flights being redeemed in one day. Needless to say, $15 million dollars in free flights could put a business like Delta in a tough position. In short, these large liabilities from outstanding points and miles mean businesses need to mitigate risk to avoid a disastrous situation.

To avoid this situation, brands devalue their rewards points or miles. Devaluation is when rewards points are reduced in value by raising the number of points needed to book a flight or hotel. Devaluation typically happens without an announcement as companies aren’t too keen on devaluing their own programs. However, mitigating risk is more important to these businesses. For example, travelers noticed in June of 2019 that Hilton devalued their Hilton Honors points significantly.

To put this in real-world terms, let’s say you accumulated 1.5 million Hilton Honors points without a plan or desire to use them. We don’t know the true value of these points, but many travel rewards experts value them at 1/2 cent per point (.005). At that value, 1.5 million Hilton Honors points are worth approximately $7,500. However, if Hilton devalued their points by 15% overnight, those same points would only be worth $6,375. These instant devaluations have just lost you $1,125 in estimated value.

As you can see, holding these points hurts both parties. You lose some of your purchasing power and the rewards program as a whole becomes less appealing for consumers to use. Devaluation is a frustrating part of collecting points and miles, and it is just another reason why you shouldn’t sit around with hundreds of thousands of points.

The danger of points and miles theft

There are numerous stories online of people logging into their rewards accounts to only find their points have been stolen. Those stolen points are typically sold on the dark web or used for purchases such as gift cards to essentially “cash out” the points.

While getting your points stolen may not be as “serious” as having your debit card stolen, you will also not have the same consumer protections as you would for a fraudulent purchase on your debit card. The recovery of these points is determined on a case-by-case basis and is largely based on how soon you report the fraudulent activity.

If you ever find yourself suddenly missing miles, be sure to report it immediately to the appropriate reward program. The sooner you do this, the sooner you can potentially recover your points. However, that result is not guaranteed. In many cases, you are going to be left without any recourse to recover the stolen points.

In short, holding onto your points is generally a bad idea. So the question remains — why do we do it?

So, why do we hoard points?

There are many reasons we hoard points. Some of us may enjoy earning tons of points and just seeing the totals rack up. It could also be we’re unsure of where to travel, unsure of how to use our points, or even have a fear travel itself. All of these are understandable concerns.

But these concerns can be overcome, and it’s worthwhile to do so — because our travel rewards points have the potential to help us check off so many things on our bucket list. As a first step, picture your ideal adventure. What does that look like for you? Once you can visualize this, your trip will actually only be only a few clicks away, using the points and miles you have accumulated.

If you’re nervous about booking your dream vacation because you’ve never traveled outside of the United States, I completely understand it can be quite intimidating. I didn’t leave the U.S. until I started traveling at age 19, so I can understand the potential anxiety of leaving U.S. soil. But since you’ve likely got a lot of points, you can start with a small trip and build up from there.

To get you to start imagining your adventure, here are a few ideas to begin using your points and miles on. These trips include both domestic and international tours.

5 trips you can book with your big pile of points

A luxurious weekend in Miami with Hilton Honors Points

If being beachside is your preference and you have a large amount of Hilton Honors points, you can soak up some rays and enjoy Florida’s coastlines at the Waldorf Astoria Boca Beach Club. For a trip in June of 2020, this resort will cost you 89,000 points per night. Keep in mind with Hilton Honors that you do get the fifth night free when you book four consecutive nights using your points.