Hoarding credit card points instead of redeeming them
Your hoard of a million credit card points isn't a travel fund; it's a depreciating asset sitting in a bank that hates you. While you wait for the perfect trip, the issuer is busy printing more points, effectively triggering hyperinflation in their closed ecosystem.
Every time an airline updates its rewards chart, your purchasing power takes a nosebleed. You’re ignoring the brutal opportunity cost of holding a currency that only loses value. In this market, the only winning move is to spend your points as fast as you earn them.
Exactly. It’s called a 'devaluation,' and it’s the ultimate corporate rug-pull. Because you don't technically own those points—you just have a revocable license to use them—the airline acts as a private central bank with zero oversight.
When they 'update' their award chart, they aren't improving the service; they’re re-pegging their currency. If a flight used to cost 50,000 points and now costs 70,000, they’ve just taxed your savings at a 40% rate overnight.
They do this to trim 'liabilities' from their balance sheet. Every point you hold is a debt they owe you. By hiking prices, they shrink that debt without actually paying out any value. It’s a masterclass in predatory accounting.
Because they aren't just an airline; they’re a bank that flies planes. Airlines sell points in bulk to credit card companies for billions in cash. This upfront revenue is often more profitable than the actual flight tickets.
You think you’re earning rewards, but you’re the product. The airline gets paid today for a seat you might not use for years. It’s a brilliant cash-flow hack.
They’re printing their own currency and selling it for real dollars. By devaluing it later, they’re essentially getting paid to borrow your loyalty.
Flying is the 'utility' that prevents their currency from becoming worthless digital dust. Without seats, those points have zero underlying value. No one buys a currency they can’t spend.
Think of the flights as a fuel-guzzling marketing expense. Operating planes is the entry fee they pay to stay in the banking game. They need a physical product to keep the currency credible.
There’s also a tax play. The IRS views points as 'discounts,' not income. If they stopped flying, that loophole vanishes. They fly to keep the taxman away and the suckers dreaming.
It’s a masterpiece of administrative cowardice. If the IRS labeled points as income, they’d have to value them—a moving target that fluctuates whenever an airline sneezes. By calling them "discounts," they avoid the nightmare of auditing a million volatile micro-currencies.
This creates a massive, untaxed subsidy. High-spenders accumulate "wealth" while the government ignores the transaction. It’s the ultimate efficiency hack: transferring value without the state skimming its 30% cut.
The IRS classifies it as a "post-tax price adjustment." You’re just getting a refund on money you already earned. It’s a loophole big enough to fly a Dreamliner through.
