Welcome to a weekly feature on the Renés Points blog. Each week this series covers in a “rookie” way either a Delta or travel related theme and attempts to break down to a basic level each topic. You can read up on all the previous posts HERE. Now on to this week’s feature.
The day that changed my life and if this is new to you it has just changed yours. I was sitting in college and the professor started talking about opportunity cost. I am a computer geek. I not only multitask, but I think multitask. It has helped me in life, but there is also something to be said for living in the moment too. Either way, there is always a cost to anything you do. How does this apply to the true value of points?
Black Friday weekend OfficeMax had the stunning $20 off Visa debit gift cards (that could be loaded to BlueBird at Walmart). There was an activation fee of almost $7 but you still ended up with $13 free. Oh, and then when you paid with a card that pays 5x at office supply stores you got another $12 in Ultimate Rewards points when redeemed for travel.
I expected the short line of people waiting for the store to open that night at 8PM to rush in and all grab one and I would maybe get none or just one. But no one “got it”. I checked out, asked if I could walk out and back in and get another and was told sure. I did not push it and just go two for me and Lisa got two as well.
We had some traveling to do Friday and Saturday and I ended up with 17 of them since even over the 3 days of the promotion no one even with time “got it” and the value of $425 of cash and points for my time. In the end I had to get a few of the MasterCard ones but we can use those at Sams Club and we do shop there so why not.
I have more airline points than I can spend. They also keep coming as with each new round of cards Lisa & I get we get more. Once the AA & US Air merger happens we will combined have almost 1 million AA points I must burn at some point. So I just spend my Ultimate Rewards points on places like you see in all these photos in the post.
This is the point of today’s post. Many mainstream travel writers and journalists poo-poo “free” award travel saying it is NOT free. You know what – they are right. It is never free but that is such a myopic view it makes me want to YELL each time I read it. Here is why.
Let’s just look at my gift card example. Say it took me 4 hours all in to go get the cards and then drive to Walmart over two days to unload them. Say I burned $25 in gas. So I made $100/hr for my time. I don’t know about you but to me $100/hr is just – wow – and I wish I made that much from my computer work (I do bill $75/hr but after expenses don’t make that much).
Now here is where we dial this up. Your time is valuable. If you are going to take a vacation, and it is going to cost you $5000 for you and your family it will take many hours of work to pay for that.
But, if you are willing to adjust your lifestyle a bit, to burn the “opportunity cost” of some of your free time, by say stopping by a pharmacy to buy some “things” on the way home, to be organized to get some new credit cards every 91+ days or so and NEVER EVER carry a balance on them.
Then, evaluate what to do with the card when the annual fee hits. Also make time to read BoardingArea blogs and multitask about ways to save on each facet of a trip and you may end up paying just 10-20% of the retail price of any trip you take.
Is the trip free then? No, clearly not! But you did NOT have to spend $5000 of you own money you worked so hard to earn. So is the trip free now? I would argue not just free, but you are getting paid for your time and effort. I have discussed this in the past and others disagree but as I sit drinking 2 for 1 rum punch I am living in the moment and enjoying the fact that I get almost “free” travel and wish others would too. Got a doubter in the family – send them the link for this post – please! – René
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