HSBC Devalues World MasterCard Rewards Points

I have been catching up on my mail since returning from St. Helena and South Africa, and finally got around to opening the stuff that looks like junk mail. Of course, a lot of that stuff in there is actually important, and in the miles and points world, this is pretty explosive. It’s the first notice of an overt (rather than stealth) devaluation of a bank rewards program I have ever seen.

hsbc evaluation

HSBC points are devaluing. Is the money in your account next?

Points in the HSBC Premier World MasterCard Rewards program spend like cash through a travel portal, similar to the US Bank or Bank of America rewards programs. Currently, for HSBC Premier members, the rate is 62 points per $1. However, as of April 2, 2018, the rate will increase to 80 points per $1. This is a significant devaluation, from about 1.6 cents per point in value down to 1.25 cents per point in value.

I think this is most significant because it is the first major bank program devaluation. Banks have been fairly hesitant to devalue their award programs, and I think for good reason. You don’t want to associate a bank’s brand with the idea that your assets in that bank will lose value. In fact, American Express has responded to airline award program devaluations by offering periodic transfer bonuses into airline programs. This has helped to maintain the value of Membership Rewards points.

However, HSBC crunched the numbers and must have decided that a money grab is worth the reputational risk. It’s an extremely aggressive move, because this impacts their Premier product–these accounts are for their highest value customers with over $100,000 on deposit. So, I think this is a shot over the bow. If HSBC is willing to devalue their points this much, and to do so for their highest value customers, I don’t think any bank award program is safe.

For my part, I’ll be asking my HSBC banker whether they also plan to devalue the cash in my account.

One Day Left Before LifeMiles Devalues!

Frequent flier miles are a depreciating currency. Don’t hang onto them and never trust that they will maintain their value. The latest program to devalue is Avianca LifeMiles. You have until midnight (Colombia time) tomorrow to book under the old rates. Pay attention to the time zone so you don’t miss out!

Avianca logoThe new award chart hasn’t been published (and won’t be until the devaluation has already happened) so it’s impossible to know precisely how much the program will be devalued. Accordingly, if you have Avianca LifeMiles, my recommendation is to redeem them now.

One of the most frustrating things about the LifeMiles program is that you can really only book what is offered online, and there are a lot of restrictions. It’s really best to use the program for simple point-to-point itineraries. You can book either one way or roundtrip itineraries. Unfortunately, the LifeMiles search engine is spectacularly stupid. A lot of itineraries fail to show up, even though they are available.

To search for flights, I recommend using the United search engine, which seems to work a lot better, to find an itinerary. Ideally, look for an itinerary involving only one airline. Once you find a workable itinerary on the United page (bearing in mind that only “United Saver” or “Partner” award space will be available when booking with LifeMiles), you can search for the same dates with LifeMiles. The LifeMiles search engine allows you to skip their “SmartSearch” option (which, in my opinion, is the opposite of smart) and select an individual airline. I have tested a few different itineraries and by using this method, have been able to make successful bookings that do not show up either with the “SmartSearch” or “StarAlliance” option.

Good luck, and burn LifeMiles now while you still can. At least Avianca gave advance notice of the devaluation this time. This doesn’t always happen.