Should You Cash Out Your Points? My Thoughts Have Recently Pivoted
I have been a points cashing out machine these past few months. I made my case on why it makes sense early on in the pandemic. With the overall lack of travel, points balances stocked from cancellations, and my continued earning abilities, it didn’t make sense to let my points collect dust (and most likely devalue). I ran my Ultimate Rewards balance down to zero and shared recently how I planned on to earn it back. American Express Membership Rewards have been pared down as well, with the help of my Charles Schwab Platinum card. My plan was to continue down this path once I locked in my safety net balances. Anything above those figures was fair game. I have recently pivoted, and put a kibosh to this thinking. I am sure it is a question many are wrestling with right now too, should you cash out your points?
What Has Changed?
So what has changed over the last few months that has me going full stop on my money printing machine that is cashing out points? Well, a lot really. It hasn’t been one thing, but a combination of things that had me do a 180 on my line of thinking.
Avenues Being Shut Down
The news over the past few weeks has not been great. PayPal Key shut down Plastiq, and then Amex cards as a whole. Walmart also blocked Metabank Visa gift cards, which are a favorite of many, and now has a memo going around that doesn’t look great for us either. Throw in the fact that Best Buy gift card reselling is on a pause right now and you get the picture. Earning has become harder and the trend hasn’t looked very good overall. I feel like I am always waiting for the next shoe to drop.
One of my main avenues was caught up in the Metabank Visa card mess even though I don’t go to Walmart. I have found a quasi workaround but there is no telling how long that will last. And if that goes down it cuts my normal avenues for earning in half. That has me proceeding with caution.
Travel Is On The Horizon
As we turn the page into 2021 I am expecting a travel boom in the second half of the year. I think having a vaccine will open many doors, whether a person wants to take it or not. That means my balances are gonna take a substantial hit with all of my pent up travel desires. I expect to do longer, and more expensive, trips versus my normal travel patterns to try to make up for lost time. That will put a dent in my stash of miles and points for sure.
Changes In Applications
While offers are hitting all time highs, which is awesome, I think new rules and restrictions will continue to roll out to safeguard these increased offers. We have seen the Citi Premier roll out with new restrictions, does that transfer to other Citi cards?
Will the new American Express pay over time rules make getting cards more difficult? Only time will tell. This, along with the ever increasing shutdowns for everything in the gray area, makes points accumulation more difficult and something we need to keep an eye on.
Counter Point, I Am Being A Worrywart
Things come and things go. Sure, PayPal Key became a lot less interesting but it wasn’t even a thing a few months back. That was a win and a loss all rolled into one. Those things are always coming and going and as long as we continue to be creative options will be available to us.
And sure, Walmart has cut us off at the knees but we don’t know for sure how bad it will be post memo. It could just limit the velocity but not shut it down completely. More work for a smaller payoff is never great, but it is better than nothing.
This game has a lot of ebbs and flows and the end has been predicted for a decade now, but we are still here. There is some comfort in that for sure. Maybe I am just overthinking it here. I would rather be safe than sorry though. Plus, time is on my side!
How Is Time On Your Side?
Doors, and windows for that matter, are closing right and left, so how is time on our side? Good point, but I mean that from a cash out standpoint. We still have several months on the Pay Yourself Back clock, and that is if it doesn’t get extended. Add in the fact that there is no reason to think the Charles Schwab cash out option is going away and I have time on my side. There is no need to rush into this, I want to take the wait and see approach. Or the stockpile and see approach I should say 😁.
While I plan on pausing my cash outs for the time being it doesn’t mean I am done with them forever. There is no harm in sitting it out for a few months and see how the landscape looks down the road a bit.
Are opportunities still closing right and left? Or were my fears overblown?
Is travel really back? Or are we still sitting on the sidelines for the foreseeable future?
These are questions that will have much clearer answers 3-4 months from now. At that point I can reevaluate my thinking. The miles and points hobby is ever changing, ever evolving and no one should rest on their laurels. You need to be open to change and to pivoting as it makes sense.
Always be closing? Nah, always be evaluating is the way of miles and points.
Final Thoughts
So, should you cash out your points? Only you can answer that for yourself. For me, I am taking the wait and see approach. While I am not opposed to cashing them out again in the near future I plan on taking advantage of the entire runway in front of me. Once I get to the point of no return I can make a more informed decision on cashing out my points.
If things continue to trend downward then I will sit on them. If things show some improvement I will cash out my surplus before the options disappear. There have been enough land mines detonated recently that I think a pause is in order, for me at least.
What do you think? Have you recently changed your plans because of recent news? Let me know in the comments.
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Interesting article, but you don’t mention any of the cards with points I have (BA & United – both Chase).
You can’t cash out airline miles. This is more talking about transferrable currencies which is what most people focus on because of their flexibility. I would rather have 1 Ultimate Reward (that can be transferred to both BA and United vs the actual airline miles). Then the debate is should you hold them for those transfers or cash them out now.
I don’t ms so my stuff is Sub and organic.
I’m saving for a bus class seat for downunder
done a little pyb but trying to keep options open.
I think the Chase/Aeroplan is exciting.
Focusing on that combo..I think we’ll be moving about in 6 months or so …
Excellent George – enjoy the trip!
All you manufacturer spending fanatics can choke on it. I hope you get stuck with gift cards or have your accounts shut down!!!
That was NEVER the intent of earning points and miles. You ruin it for everyone and as soon as you are pushed out the better!!
AA you should really talk to someone about your anger issues. Life is too short!
MS activity has a wide range, everything from just paying bills in advance to generate bonus points and SUBs along with occasional fee free GCs at the local grocery store, up to those buying and liquidating Simon VGCs in big numbers. Agree, “fanatics” – assuming that means those at the far end of the spectrum are a problem – will contribute to potential dilution of point value across the board and ideally their massive churning will be stopped. But those of us who more take advantage of an offer here and there designed by the banks and vendors to get us to spend now vs. later, hopefully you don’t see that as an issue; my take is the more we use those offers the more likely they will continue to offer them.
Wow. Just because you choose not to engage in an activity doesn’t mean that it’s wrong or immoral. I’d argue that charging 20 to 30% interest for those unable to pay off their balances—who tend not to be MSers—is the immoral part of the credit card industry.
Especially in a time when families are going hungry from job losses and the illness or death of a breadwinner at Depression era levels, your stance stinks of inappropriate self satisfaction.
Well seeing you are an AA flyer.. one day AA will shut down your account. Maybe not today. Maybe not tomorrow but rest assured, it will happen. Then you will be complaining about the tierney of these programs. No bank, no airline, no corporate entity is your friend. You’re just a number and will be dropped at a tip of a hat if need be. That’s all to say, get your moneys worth.. otherwise you’ll let the world pass by.
I agree with you.
I cashed out about 1 million UR through PYB because I had over 3 million. However, I’m going to sit on my remaining 2 million for now because of the WM thing. For many years I’ve been maxing out an Ink+ & Ink Cash each year for 375K UR/year. This won’t be so easy going forward, (especially as I expect my back-up grocery store to get killed by migration from WM).
I normally only use UR’s for International air in premium cabin so I consider UR value to be 3.5 cents+ for redemptions. This is not a problem when you can easily acquire more in volume via GC > MO MS*.
I’m not interested in churning new CC for SUB so I can see my earning potential dropping dramatically going forward. Oh well,, less of my life spent in line at WM MC/CS.
I think that makes a lot of sense Clint.
Meta VGCs are not blocked at WM just increments so small large players cannot handle the logistics.
They are essentially worthless at this point imo.
Perhaps worthless effort for the big whales who think in $10k increments, and none of them want to make 10 swipes per $1000, or have the cash float to not be in a rush, or convenience of so many WMs nearby that some of us have to do that. But for many of us, the smaller players, Meta GC purchases usually capped at $300 are very valuable to us. We can boost hotel or air mile balances by 1500 points/miles using 5X offers several times a year, or 10k miles meeting spending or annual spending bonuses, or just reach a SUBs sooner. We can liquidate them onto BB at amounts not blocked by WM, use them to pay bills that otherwise don’t accept credit cards, and similar low profile paths to make it worth it for us.
If the memo does what I think it may I think multiple swipes may be a thing of the past. If that happens the lower limits will make it not worth it. Time will tell I guess on that and I expect it to be location specific.
I should clarify wasn’t referring to the transaction going through on second or third swipe. Was referring to currently you should be able to make 10 one time swipes at $99 maybe $100 to liquidate a $1000 VGC onto BB. I believe BB swipes are fine up to $100. Of course clerk, line, and personal levels of willingness to be a nudge all factor in. For me it remains a simple way to make meaningful boosts to my balances .
I do think at the point the fees start to work against you. That could be 10 fees for 1 card purchase (on top of the purchase fees). Something to consider. If it is the fee free $200 office store cards then it isn’t a big deal. Simons cards though, I don’t think it is worth it at that point.
At WM, BB loads for free no matter how many deposits from a debit card you make, so 10 swipes to load/liquidate a $1000 S-VGC costs only whatever the VGC cost; the wild card is do you do it in 10 visits to WM, or one visit getting away with 10 swipes. And yes, everything I am posting about my own DP is exclusively fee-free Meta VGCs purchased at grocery or office stores. Obviously not viable if purchasing MOs.
Kibosh, not kabash.
I even googled it and Kabash came up as an option but I will change it – thanks Brutus.
I am not blaming Walmart at all. They would sell your grandmother if they could make a nickel. Think deeper on this one. Amex, Chase, and Citi went after Walmart and told them to stop this. It was costing those card companies zillions of points. From a WM perspective, someone selling Staples Gift Cards for a money order is legitimate money. Someone selling dope and coming in buying a money order with cash is money laundering. I believe the banks are the only ones that can put the screws to Walmart and Walmart blinked. Hence came the memo we all saw. When it specifically says manufactured spending, that is a term that has come from the big 3 banks and the hotel and airline industry.
Agree. Stores tolerate losses to get you in the door. So why not VGCs.
Probably because WM knows MSers just get their MO’s and leave.
I doubt the card issuers would contact Walmart about this. If anything they would go after vendors selling the gift cards. I think this is about limiting the lines in the money centers and if anything it came from the issuer MoneyGram.
hi mark,
would you being willing to share your workaround for metabank gift cards at walmart?
I don’t go to Walmart at all the workaround was for a local place that is a regional chain.