Points Devaluation and the Earn-and-Burn Rule
What a devaluation is
A devaluation is when a program increases the points needed for awards or cuts a benefit, lowering the value of points you already hold. Airlines and hotels do this regularly, often with little or no notice, because they control the award chart. Your balance can be worth meaningfully less the next morning.
Why hoarding is risky
Because points only lose value over time, sitting on a giant balance is a bet against the issuer that you usually lose. Transferable bank points are a bit safer than airline or hotel currencies because you can move them to whichever partner still offers good value, but even they are not an investment.
Earn and burn
The practical rule is to earn toward a near-term redemption and burn the points on it, keeping balances modest. Chase a trip, not a hoard. This also sidesteps the risk of a program devaluing right before you were going to redeem. See when to use cash instead of points.
Frequently asked questions
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