It’s pretty common to see 40% off these points, 60% off those points and limited time bonuses on this or that. It’s all very tempting, and discounts are irrationally exciting, but the offers don’t  do anything to explain whether purchasing is actually a good idea. There’s one situation where it’s always a good idea to buy points, whether you presently have any or not and it’s pretty simple..

Buy Points For Immediate Use With Immediate Savings…

Points purchases are a brilliant way to hedge your costs for a a flight or hotel. The one time you don’t even need to think about whether or not to buy is when you have an imminent use, and the cost to buy points is less than the cost of the flight or hotel you want if you were using cash. There are a couple considerations that round out that decision for more frequent travelers, but for most, it’s pretty much that simple…

Here’s A Great Example…

Occasionally British Airways will sell their points at a large discount, as do almost every airline and hotel from time to time. If there’s a flight I need to take which is currently selling for $500 cash, but I could buy the points I need to make it a “free” flight for $300, that’s a $200 savings, just from comparing the cost to purchase points versus purchase a flight before booking. If you already have some or all of the points it’s even better…

And For Frequent Travelers There’s A Bit More Math…

Things like frequent flyer or hotel elite status have value. The free breakfasts, points earned and other considerations should weigh into any final decision. If a hotel is $300 per night paying cash or just $250 using points, you would save $50 per night but miss out on the ability to earn points for future free stays or the ability to use your elite guest benefits, such as a free daily breakfast and a late check out, the decision becomes a little tougher depending on the benefits. If it’s a difference of more like $100 or more per night, it’s hard to justify earning a few points and some free breakfast versus just saving the money.

Other Times To Buy Points?

Totally. Certain flights or hotels rarely go on sale so in very specific circumstances, if you’ve done the math it can be worthwhile to buy up points over time to hedge those costs. As a word of caution though, airlines and hotels are known more and more for changing the amount of points you’ll need, so hoarding points is very rarely a good practice…