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do you bank with ffp

Written by Mark Chaskiel

Seems like a strange question coming from the owner of a Travel Management Company (TMC). I've been very loyal to my main banker, but in recent years I have taken a huge interest in the Bank of FFP (Frequent Flyer Points).

Our task is to buy travel for our clients, sometimes this includes advising on loyalty programs.

In the early days of these programs this was easy. The reward of points was based on how much you flew. I even remember when the rules were so locked down, even when there were only a few programs. As a matter of interest, points go back to the early 1980’s and in particular in America from an international perspective with Pan Am.

Fast forward to 2017. How many ‘points millionaires’ do you know? Unlike bank balances, people are prepared to talk about how many points they have. They often even tell you that these points came from managing their business expenses with a multitude of credit cards. The funny thing is card stacking used to be a tool for underfunded businesses, now its created a false economy, a points economy some might even say it’s a bigger currency than Bitcoins.

So you now have many hundreds of thousands, if not millions of points and your life partner says how about London in July? The question needs to be asked is, is there any such thing as a free lunch? In this case call it a holiday. You found the flights in business class to London, you've converted your Starwood points to hotel accommodation, all you need now is the cash to cover your shopping. If only it was that easy! The simple answer is sometimes it is, but most of the time the idea of a free trip creates the expectation and you just can't get the seats.

So here is the deal. What is the best way to use your points? There are blogs, there are hacks, there are even frequent flyer point advisors that for a fee will tell you all there is to know about points and will even help you burn some.

And then there are even programs that allow you to see which flights are available (not all airlines and not all flights).

Let me say immediately that I'm not here to tell you how to get six business class tickets confirmed to Los Angeles using your points. However if this is what you are looking for, book a full year ahead.

My purpose of this article is to tell you that in some cases points are better used for purposes other than travel. In the past year, I have heard of examples where points have been used to purchase furniture, luggage and gift cards to name a few. All of this has helped preserve your cash.

It is worthwhile to note that once again it has been alluded to that the ATO (Australian Taxation Office) might start looking at points earned in a business but used for personal requirements. However, I urge you to speak with your Financial Advisor or Tax Accountant, as I am neither.

My Tips:

  1. If you are looking to use your points for flights, generally the best value is in premium classes. Try for midweek flights. Don't commit to an expensive land content until your flights are confirmed.  E.g. cruise until you have secured your flights
  2. Generally speaking, domestic travel is a bad value for points unless you travel in the premium cabin to Western Australia.
  3. I would avoid using your points to book multi-stops. It can be frustrating, so I do suggest just using your points point-to-point only.
  4. Be on the look out for credit card company initiatives including extremely lavish sign-on bonuses if you switch credit card provider. This is a good way to top up your points.
  5. If you have booked your flights and require accommodation, tours, a cruise etc. make sure you see your trusted Travel Advisor. They are the best qualified to add additional value to your travel.
  6. When overseas, be careful transacting with high points earning credit cards. You might love the points that you've earned, but the exchange rates they use may be a shock.
  7. I think one of the best thing that's happened for small businesses in recent times, is the newly released Qantas Business Rewards Program. You the client have the opportunity to leverage your spend for a benefit whilst your typical time-sensitive travellers will not be disadvantaged in their ability to earn points. The best thing about this program is that it kicks in from a very low spend. Effectively all you need is an ABN (Australian Business Number) and $89.50. Some are even calling it a double dip, but the trick is to make the most of it while available. Qantas Business Rewards have many partners in many fields including energy, construction, freight, banking and finance, office supplies and more.

I suggest reading more about earning Qantas Points. If you want to save your business money this is clearly one way how.

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