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Thank You Points Severely Devalued: Fixed Point Option for Flights to be Removed

In a move that will significantly devalue Thank You Points, Citi will be removing fixed point awards for flights, effective March 1, 2009. Why is this such a big deal? For those in the know, fixed point travel redemptions offered a way to get nearly a 3% rebate per point. With many options available for earning multiple Thank You points per dollar spent, fixed point flights represented a tremendous value.

How can you get nearly 3% in value per point?
Here’s how to maximize your Thank You point redemption in a nutshell:

You’ll first need to buy a fixed-point business class ticket. The destination is not important as you will not actually be using the ticket, but the airline is. You need to pick an airline that you will want to use and ideally select a flight designed to max out your point cost. For domestic flights, this means finding a flight that costs as close to $2700, which will take 90k points. For flights to Europe, this means finding a flight that costs close to $5400, or 180k points. You should search for flight costs using Expedia.com and only selecting non-refundable business class fares.

Once you have booked your ticket, you can call your airline to change it to a flight that you really want. The airline will deduct its change fee and should issue you a residual value voucher for the rest. Each airline handles things differently, but many will allow you to spend the remainder of your voucher on multiple different flights for up to a year in the future.

Note that selecting a non-refundable fare is essential. It’s sufficient to make just one leg of your trip non-refundable, as that will achieve the desired goal of making your ticket non-refundable. If you mistakenly choose a refundable fare, when you attempt to change your flight, the airline will usually choose to refund to the original method of payment. Since Citi paid for the ticket, they will get the credit instead of you. We clearly want to avoid that.

Make sure you do your research on this method thoroughly by reading through this very informative FT thread. There are a number of very important details covered there.

With the removal of this option, the attractiveness of the Thank You network is significantly diminished. In its absence, the Starwood Preferred Guest program and 2% cash back cards clearly become superior.