Frequent Fliers: Expect Turbulence

Tim Winship is an editor-at-large for SmarterTravel.com and publisher of FrequentFlier.com.

Are frequent-flier programs still a good deal?

These programs have lost a lot of their value over the past five years, in a number of ways. You've seen most airlines increase the number of miles required for awards. American Airlines recently began imposing a $50 cash surcharge to upgrade from coach to first class. International upgrades can cost as much as $350. Frontier and US Airways now charge a $25 frequent-flier-award ticketing fee for domestic flights. Continental recently announced that holders of unrestricted awards -- for which you typically pay twice as many miles -- would no longer have rights to any available seat on all flights.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Finally, it used to be standard policy to earn a minimum of 500 frequent-flier miles even on short flights. Now, US Airways awards only the actual miles flown.

Do discount airlines, such as Southwest and JetBlue, treat frequent fliers better?

We have not seen a similar pattern of program devaluation among the low-cost carriers, but they've had bare-bones programs from the outset. They limit the ways you can earn miles, or what you can redeem them for. And miles expire sooner.

How else can travelers save?

The majority of consumers earn their miles by using a credit card. If the card offers a hotel program, it can give airline programs a run for their money. While airline ticket prices have been flat for the past several years, due to competition from discount airlines, hotels have been steadily raising rates.

Another attractive option is a card that offers a simple 1% cash rebate -- essentially equivalent to airline cards that let you earn one mile for every dollar. But with cash, you can buy a ticket with none of the hassle of redeeming miles.

What should people do with the miles they've saved?

You'd be surprised at how many people are hoarding miles with the idea that someday they'll retire and start redeeming the miles for exotic trips. That is a very risky approach. There's no reason to think that the ongoing devaluation of miles is a trend that is going to reverse. It's like holding a stock that's been losing value for the past five years -- irrational. Using miles sooner rather than later is called for.