Re: Frequent Flyer Miles are a cyber currency [B.McMaster] [ In reply to ]

Dec 15, 17 15:07

Post #26 of 40 (617 views)

B.McMaster wrote:

SH wrote:

B.McMaster wrote:

travelmama wrote:

Miles are damn near valueless anymore especially since the major devaluations that took place last year. I have been hoarding miles for years and have about a million but don’t redeem often them because it has always been cheaper to buy tickets.

Interesting.

4 of us flew international 1'st class this past fall using points. Cash cost to me was $104/ticket. I've never seen a 1'st class international ticket for $104.

Flying my wife on a 3 leg trip this spring using points. Cash cost for me is $11. Don't think I've ever seen a domestic 3 leg flight for $11.

How many points? What milage program? What airline? Between what airports?

The issue is if you are getting less than $.015 per point in equavalent $$$ value then it generally is a poor deal vis-a-vis just paying the cash. But that's the issue with most milage plans.

The 1'st class seats were 67,500 on Delta. JFK to PUJ. Booking that same trip today for 2018 would be $1,500/ticket. I don't recall the price when I booked it with points.

It costs me ZERO dollars to earn the points, so I'd say using points, paying $416 for $6,000 worth of tickets is a good deal and "worth" the effort. ($5,500 savings)

The domestic flight is 44k points on Delta.

Was that 67,500 points per leg of the flight or was it for the round trip?

Re: Frequent Flyer Miles are a cyber currency [spot] [ In reply to ]

Dec 15, 17 15:08

Post #27 of 40 (615 views)

spot wrote:

SH wrote:

vitus979 wrote:

It costs me ZERO dollars to earn the points

Yeah.

This must be why I'm lower middle class, at best. I clearly don't understand finance. I can't see a situation in which it's cheaper to pay cash for a ticket than to use free points, no matter how lowly those points are valued for redemption. Especially if those points can't be used for anything else.

I'll try and explain it pretty quickly. Let's say I give you a quantity of bit coins that is worth ~$1,000 (if we can believe the newspapers). You want a pack of bubble gum at a roadside gas station. The gas station attendant offers to sell it to you for all your bit coins, or you can just pay the regular cash price (maybe $1.40). Do you take the gas attendant's bit coin offer or just pay in cash? What was your decision process? Did it matter that I had given you the bit coins for free?

That’s not a great example unless the bitcoins can only be used for bubble gum.

Well, points and miles can be used for other things, upgrades, and other flights.

Last edited by: SH: Dec 15, 17 15:08

Re: Frequent Flyer Miles are a cyber currency [SH] [ In reply to ]

Dec 15, 17 15:13

Post #28 of 40 (607 views)

SH wrote:

spot wrote:

SH wrote:

vitus979 wrote:

It costs me ZERO dollars to earn the points

Yeah.

This must be why I'm lower middle class, at best. I clearly don't understand finance. I can't see a situation in which it's cheaper to pay cash for a ticket than to use free points, no matter how lowly those points are valued for redemption. Especially if those points can't be used for anything else.

I'll try and explain it pretty quickly. Let's say I give you a quantity of bit coins that is worth ~$1,000 (if we can believe the newspapers). You want a pack of bubble gum at a roadside gas station. The gas station attendant offers to sell it to you for all your bit coins, or you can just pay the regular cash price (maybe $1.40). Do you take the gas attendant's bit coin offer or just pay in cash? What was your decision process? Did it matter that I had given you the bit coins for free?

That’s not a great example unless the bitcoins can only be used for bubble gum.

Well, points and miles can be used for other things, upgrades, and other flights.

Ok, I’ll change it from bubble gum to you can only use the bitcoins at BP Gas Stations. That changes your example quite a bit. So, if I can only use my miles or bitcoins or whatever from Delta, the notion that I’m losing money by cashing them on a flight vs an upgrade doesn’t really make a lot of sense. I’ve personally found that upgrades use up miles far faster than flights in coach....for example, I was able to fly my family of 4 to France with about 280,000 miles, but only one person could have flown business class to France for the same amount of miles.

___________________________________________________
Taco cat spelled backwards is....taco cat.

Re: Frequent Flyer Miles are a cyber currency [spot] [ In reply to ]

Dec 15, 17 15:16

Post #29 of 40 (604 views)

Quote:

Ok, I’ll change it from bubble gum to you can only use the bitcoins at BP Gas Stations. That changes your example quite a bit. So, if I can only use my miles or bitcoins or whatever from Delta, the notion that I’m losing money by cashing them on a flight vs an upgrade doesn’t really make a lot of sense. I’ve personally found that upgrades use up miles far faster than flights in coach....for example, I was able to fly my family of 4 to France with about 280,000 miles, but only one person could have flown business class to France for the same amount of miles.

Yes, but the decision process is the same. You look to maximize the value of those miles or coins within the universe of items that can be purchased. Some of those items may have a much lower value to point ratio than others. You don't just pull the trigger on a purchase and say "it doesn't matter because I got them for free". Well, unless you aren't being smart.

Re: Frequent Flyer Miles are a cyber currency [SH] [ In reply to ]

Dec 15, 17 15:22

Post #30 of 40 (598 views)

Round trip.

Re: Frequent Flyer Miles are a cyber currency [SH] [ In reply to ]

Dec 15, 17 15:25

Post #31 of 40 (594 views)

SH wrote:

Quote:

Ok, I’ll change it from bubble gum to you can only use the bitcoins at BP Gas Stations. That changes your example quite a bit. So, if I can only use my miles or bitcoins or whatever from Delta, the notion that I’m losing money by cashing them on a flight vs an upgrade doesn’t really make a lot of sense. I’ve personally found that upgrades use up miles far faster than flights in coach....for example, I was able to fly my family of 4 to France with about 280,000 miles, but only one person could have flown business class to France for the same amount of miles.

Yes, but the decision process is the same. You look to maximize the value of those miles or coins within the universe of items that can be purchased. Some of those items may have a much lower value to point ratio than others. You don't just pull the trigger on a purchase and say "it doesn't matter because I got them for free". Well, unless you aren't being smart.

Sure, but some of that is subjective. Is two coach flights to somewhere worth more to you than a single first class flight to the same place? Like I said, the example given here is that it’s a better value to use miles to upgrade, but in my experience that was not at all true.

___________________________________________________
Taco cat spelled backwards is....taco cat.

Re: Frequent Flyer Miles are a cyber currency [B.McMaster] [ In reply to ]

Dec 15, 17 15:26

Post #32 of 40 (591 views)

B.McMaster wrote:

Round trip.

Those were good deals then. Really difficult to come by in some milage programs.

Re: Frequent Flyer Miles are a cyber currency [spot] [ In reply to ]

Dec 15, 17 15:30

Post #33 of 40 (586 views)

spot wrote:

SH wrote:

Quote:

Ok, I’ll change it from bubble gum to you can only use the bitcoins at BP Gas Stations. That changes your example quite a bit. So, if I can only use my miles or bitcoins or whatever from Delta, the notion that I’m losing money by cashing them on a flight vs an upgrade doesn’t really make a lot of sense. I’ve personally found that upgrades use up miles far faster than flights in coach....for example, I was able to fly my family of 4 to France with about 280,000 miles, but only one person could have flown business class to France for the same amount of miles.

Yes, but the decision process is the same. You look to maximize the value of those miles or coins within the universe of items that can be purchased. Some of those items may have a much lower value to point ratio than others. You don't just pull the trigger on a purchase and say "it doesn't matter because I got them for free". Well, unless you aren't being smart.

Sure, but some of that is subjective. Is two coach flights to somewhere worth more to you than a single first class flight to the same place? Like I said, the example given here is that it’s a better value to use miles to upgrade, but in my experience that was not at all true.

Your own personal value doesn't count that much. What counts is the dollar value the airline assigns to that same trip or upgrade. That way you would know your opportunity cost vis-a-vis using cash. Even if you love, love, love the coach tickets, you might delay if you estimate that you can get a more expensive coach trip in the future for the same miles. The miles are not always related to the dollar value for the tickets listed. That's why you need a separate analysis, and why it's a PITA.

Re: Frequent Flyer Miles are a cyber currency [SH] [ In reply to ]

Dec 15, 17 15:34

Post #34 of 40 (580 views)

SH wrote:

spot wrote:

SH wrote:

Quote:

Ok, I’ll change it from bubble gum to you can only use the bitcoins at BP Gas Stations. That changes your example quite a bit. So, if I can only use my miles or bitcoins or whatever from Delta, the notion that I’m losing money by cashing them on a flight vs an upgrade doesn’t really make a lot of sense. I’ve personally found that upgrades use up miles far faster than flights in coach....for example, I was able to fly my family of 4 to France with about 280,000 miles, but only one person could have flown business class to France for the same amount of miles.

Yes, but the decision process is the same. You look to maximize the value of those miles or coins within the universe of items that can be purchased. Some of those items may have a much lower value to point ratio than others. You don't just pull the trigger on a purchase and say "it doesn't matter because I got them for free". Well, unless you aren't being smart.

Sure, but some of that is subjective. Is two coach flights to somewhere worth more to you than a single first class flight to the same place? Like I said, the example given here is that it’s a better value to use miles to upgrade, but in my experience that was not at all true.

Your own personal value doesn't count that much. What counts is the dollar value the airline assigns to that same trip or upgrade. That way you would know your opportunity cost vis-a-vis using cash. Even if you love, love, love the coach tickets, you might delay if you estimate that you can get a more expensive coach trip in the future for the same miles. The miles are not always related to the dollar value for the tickets listed. That's why you need a separate analysis, and why it's a PITA.

Sure, but unless the airline is willing to tell you the future value of your miles (which they are never gonna do, and the likelihood that your miles will ever increase in value is nil) , how on earth are you supposed to make that calculation? All you can do is to compare what you can do now as related to other options.

___________________________________________________
Taco cat spelled backwards is....taco cat.

Re: Frequent Flyer Miles are a cyber currency [SH] [ In reply to ]

Dec 15, 17 15:42

Post #35 of 40 (574 views)

SH wrote:

spot wrote:

SH wrote:

Quote:

Ok, I’ll change it from bubble gum to you can only use the bitcoins at BP Gas Stations. That changes your example quite a bit. So, if I can only use my miles or bitcoins or whatever from Delta, the notion that I’m losing money by cashing them on a flight vs an upgrade doesn’t really make a lot of sense. I’ve personally found that upgrades use up miles far faster than flights in coach....for example, I was able to fly my family of 4 to France with about 280,000 miles, but only one person could have flown business class to France for the same amount of miles.

Yes, but the decision process is the same. You look to maximize the value of those miles or coins within the universe of items that can be purchased. Some of those items may have a much lower value to point ratio than others. You don't just pull the trigger on a purchase and say "it doesn't matter because I got them for free". Well, unless you aren't being smart.

Sure, but some of that is subjective. Is two coach flights to somewhere worth more to you than a single first class flight to the same place? Like I said, the example given here is that it’s a better value to use miles to upgrade, but in my experience that was not at all true.

Your own personal value doesn't count that much. What counts is the dollar value the airline assigns to that same trip or upgrade. That way you would know your opportunity cost vis-a-vis using cash. Even if you love, love, love the coach tickets, you might delay if you estimate that you can get a more expensive coach trip in the future for the same miles. The miles are not always related to the dollar value for the tickets listed. That's why you need a separate analysis, and why it's a PITA.

This may also explain it. http://www.godsavethepoints.com/.../buyingandupgrading/

_____________________________________
DISH is how we do it.

Re: Frequent Flyer Miles are a cyber currency [vitus979] [ In reply to ]

Dec 15, 17 15:58

Post #36 of 40 (572 views)

vitus979 wrote:

Using them to upgrade is still redeeming them, isn't it?

And I still don't see how redeeming them for a ticket isn't cheaper than paying cash.

Yes it is but there is less value per mile then ever before, which is why it can be cheaper to pay for then upgrade a ticket. Last month I flew from LAX to Costa Rica for $244rt. Using 30k miles would have made no sense.
I have been hoarding miles because I was using them to upgrade my father and sometimes travel in business class with him.

_____________________________________
DISH is how we do it.

Re: Frequent Flyer Miles are a cyber currency [travelmama] [ In reply to ]

Dec 15, 17 16:30

Post #37 of 40 (567 views)

I can understand that you’d rather use the miles to pay for an upgrade than for a coach ticket. That’s a little different. I can also see where the supposed dollar value of the miles is higher for an upgrade than for a coach ticket. (Though that’s not an especially real value to start with, since the value of a first class ticket is inflated and subjective to begin with.) But it’s still not cheaper to pay cash for a coach ticket than to use miles.

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Frequent Flyer Miles are a cyber currency [vitus979] [ In reply to ]

Dec 15, 17 16:34

Post #38 of 40 (565 views)

vitus979 wrote:

I can understand that you’d rather use the miles to pay for an upgrade than for a coach ticket. That’s a little different. I can also see where the supposed dollar value of the miles is higher for an upgrade than for a coach ticket. (Though that’s not an especially real value to start with, since the value of a first class ticket is inflated and subjective to begin with.) But it’s still not cheaper to pay cash for a coach ticket than to use miles.

Depends on how and when you travel and on which carrier. The link I posted above should better explain it.

_____________________________________
DISH is how we do it.

Re: Frequent Flyer Miles are a cyber currency [travelmama] [ In reply to ]

Dec 15, 17 16:51

Post #39 of 40 (558 views)

That makes more sense to me, thanks. I get it now.

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Frequent Flyer Miles are a cyber currency [travelmama] [ In reply to ]

Dec 15, 17 17:02

Post #40 of 40 (552 views)

travelmama wrote:

vitus979 wrote:

I can understand that you’d rather use the miles to pay for an upgrade than for a coach ticket. That’s a little different. I can also see where the supposed dollar value of the miles is higher for an upgrade than for a coach ticket. (Though that’s not an especially real value to start with, since the value of a first class ticket is inflated and subjective to begin with.) But it’s still not cheaper to pay cash for a coach ticket than to use miles.

Depends on how and when you travel and on which carrier. The link I posted above should better explain it.

He is right in a single transaction. A free ticket is always cheaper than one you pay cash for. You can't turn the point into cash. (I know you can get different gift cards, but you can't turn them into something you can pay your mortgage with - i.e. cash)

However, I do agree with you that if you fly a lot, you can manager your usage of points and at times it is better "points management" to pay for a ticket and use points to upgrade or buy "more valuable" ticket in the future.

FWIW - I do what you do and place a dollar value my points, but I also fly 20-25 times a year which is more of an exception than the rule for most people.

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