"Let me put it on my map … I need the miles." ~ Monkey run
This is just one of many wonderful phrases you can hear from a devout credit card holder. What is it about the airlines that these run monkeys love so much? Perhaps it was the fact that they could be used as a flexible, free way to book airline tickets in time. Unfortunately, those days are gone and airplane miles today are a shadow of their former glory. They are highly depreciated, lack flexibility and cover only a fraction of the cost of the flight. I am writing this article to end all the craziness and tell everyone to drop their credit cards on the run.
Now, before I go any further, let me first say that airline miles have some value and that if I got enough of them by doing multiple flights, I would definitely buy them for some kind of ticket. My real avio miles beef is their cult as a popularity with credit card users over the much more flexible version of cold hard money. Here are my main reasons why I prefer money over miles every day of the week and twice on Friday –
Most people do not associate inflation with airlines, but this is exactly what happened to their recent devaluation. Since creating miles for airlines, the cost of a continental ticket has always been 25,000 miles. Today, you would be more fortunate to beat LeBron James in a one-on-one basketball game than book a decent ticket with a decent schedule in just 25,000 miles. A few years ago, all airlines decided to introduce a new "unlimited" class of flight ticket, which was not limited to a specific number of seats booked and cost 50,000 miles. In conclusion, they also reduced the number of limited-edition tickets (the old variety of 25,000) to just a handful, if any, of each flight, making the new effective fare fare closer to twice what it should be. This type of inflationary devaluation is close to a developing country with weak financial management like the Mexican peso since the early 1990s.
Lack of flexibility
In the past, one of the major benefits of the airline was the ability to book a last-minute ticket. Booking a ticket a few days before your flight is usually a costly endeavor, so big savings can be locked in by using miles instead of money. But just like the old 25,000-mile ticket, this one stopped. Bargain hunters who don't want to pay 2 miles to book a free flight are now forced to redeem mileage tickets months (if not all year) in advance of less than the ideal schedule (how to add extra leave and 3 hours to your travel sound?) Due to the lack of limited tickets available.
It's nothing for free
My last beef is not so much with mileage programs as with the new cost structure. For years, airlines have been losing money. Fierce competition and rising costs (both for fuel and labor) put most of the airlines in the red. Earlier this year, energy prices (including jet fuel) were rising, so airlines decided to encourage their customers to carry less luggage by charging for checked baggage. This is just one of many fees that you may be responsible for paying if you book a run ticket. Just last year I booked two international tickets for miles and had to pay several hundred dollars in airport taxes. So even though you are lucky enough to find a 25,000 mile ticket, you still won't run out of the airport without turning up a little cold hard money.
The fact is that airlines are a pseudo currency, with no system of checks and balances. The airline issues that credit mileage has the control of depreciating them, changing the rules or starting charging additional fees as it sees fit. I have already done the math for the true economic value of one mile on an airline, showing that it will be better to collect cash rewards than airline miles. For all these reasons, I would rather get cash for all my credit card purchases than for miles from airlines. To add insult to injury, most cashback rewards cards do not have an annual fee, while a typical mileage card will cost anywhere between $ 60 and $ 100 a year for the "privilege" of ownership. With all this evidence, the choice is clear … don't be a monkey on the run. Just say no to mileage cards and say yes to cash back credit cards.
As a disclaimer, I was very fortunate with Southwest's rewards program, which is based on trips made, not miles traveled. Just the other day, I commented to Mrs. Franco how funny it was that the Southwest was once considered a "discount airline" and now I consider it a luxury liner (free checked bags, check-in curbs, snacks, no booking fees, and a decent program for awards).