Are Points Safer Than Cash? Devaluation vs. Inflation

By Bryce Casson, Founder · Cardocrat · Updated June 2026

The short answer: It is tempting to treat a big points balance like savings, but points are a worse store of value than cash. Cash erodes slowly and predictably to inflation, while points erode faster to devaluation, earn no interest, are not insured, and can go to zero if a program is killed or an airline fails. Points beat cash on value when you redeem them well and soon, but they lose to cash as a place to park value.

Both lose value, but not equally

Neither cash nor points hold value perfectly, but they fail differently. Cash loses roughly two to three percent a year to inflation, slowly and predictably. Points lose value to devaluation, when programs raise award prices, and that erosion is often faster and only moves one direction. On top of that, points earn no interest, are not insured, and cannot be spent anywhere outside their program. As a store of value, points lose to cash on every axis except one. See the devaluation history and why you earn and burn.

Points can go to zero; cash cannot

The risk that really separates them is catastrophic loss. A loyalty program can be devalued overnight, or worse, an airline can fail and take its miles with it, as Spirit Airlines did in 2026 when it shut down and left Free Spirit miles essentially worthless. Cash never goes to zero. Holding a large points balance concentrates your value in a single company that owes you nothing and can change the rules or disappear. See what happened to Spirit miles.

So why hold points at all

Because their ceiling is high. A point worth about a cent as cash can be worth two to five cents or more transferred to an airline or hotel for premium travel, which cash can never match. That is the whole case for points: they beat cash on value when you redeem them well. But that advantage shows up at redemption, not in storage, so it rewards spending them, not banking them. See what points are worth and transferable points.

Treat points as spend-soon, cash as savings

The takeaway resolves the tension cleanly: keep your savings in cash or real investments, and treat points as a currency to earn toward a specific trip and burn within a year or so. Every month a big balance sits, it can only lose value or, in the worst case, vanish. Use points for their high redemption ceiling, and rely on cash for what cash does best, holding value safely over time. See when to use cash instead of points.

Frequently asked questions

Are points safer than cash?

No. Points are a worse store of value: they lose value to devaluation faster than cash loses to inflation, earn no interest, are not insured, and can go to zero if a program is killed or an airline fails. Cash never goes to zero.

Do points lose value over time?

Yes, through devaluation, when programs raise award prices, which is often faster and more one-directional than inflation. That is why a banked balance tends to be worth less the longer you hold it.

Can credit card points become worthless?

They can. A program can be devalued sharply, and if an airline fails its miles can become worthless overnight, as happened with Spirit Airlines in 2026. A large balance concentrates that risk in one company.

Should I save points or spend them?

Spend them, generally within a year. Points reward redemption, not storage, so earn toward a specific trip and burn promptly. Keep your actual savings in cash or investments, not in a loyalty program.

Are points better than cash?

On value when redeemed well, yes, since a point can be worth several cents transferred for premium travel. As a store of value, no, cash is safer and steadier. Use points for their high ceiling, and hold value in cash.