Analysis: When you should, and shouldn’t, pay for airline points

HE’S crunched the numbers of Australia’s most popular airline schemes, and come up with the lesser-known, cheaper way to earn points.

MANY frequent flyer programs let you purchase extra points if you don’t have quite enough to book the flight or other reward you’re after. Both Qantas Frequent Flyer and Virgin Velocity, the most popular schemes for Australians, offer this option.

Before you splash out that money, though, you need to work out if you’re actually getting a decent deal.

In many cases, there are more cost-effective ways to get those extra points.

Firstly, you need to understand the rules.

READ MORE: Warning over outrageous Qantas fee

For Qantas Top-Up Points, you must have a specific reward in mind, and you can’t acquire more than 20 per cent of the value of that reward. You can’t buy top-up points more than twice in any 12-month period, and you can only purchase in 500-point blocks.

Buying more points scores you a slight discount, but it’s still not cheap. To get 60,000 points (the maximum you can buy), you’ll pay $1,425.

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Virgin’s Velocity holds occasional points sales. Picture: AAP Image/Peter Rae

Velocity Points Booster has the twice-a-year rule and a maximum of 50,000 points (which will currently cost you $1,172). You don’t need to identify a specific reward, but you can’t purchase more than 50 per cent of your existing points balance.

Occasionally Virgin holds “sales” where you can top up for discounted rates. One ran for the month of April that offered a 15 per cent discount.

In reality, other points-boosting strategies can work better.

An example makes that clear: Imagine you’re thinking about a return economy flight to the UK, and you have 110,000 Qantas Points. That flight costs 120,000 points (not including taxes), so you’ll need another 10,000 points. Qantas will charge you $335 for those.

Finder.com.au’s Angus Kidman breaks down the value of points.

That $335 sum is certainly much lower than the $2,200 or more you’d typically pay for the flight. However, there may be cheaper ways to get those extra points.

One lesser-known but useful method is wine. Yes, really. Qantas’ online epiQure wine club regularly features offers where you can buy a case of wine for around $300 and earn 10,000 bonus Qantas Points. That would top up your total to the required amount, and you’d have the 12 bottles of plonk to enjoy as well.

Similarly, many frequent flyer credit cards offer 50,000 or more bonus points for new customers who meet minimum spend requirements, and the annual fee may be lower than $300. For instance, right now the HSBC Platinum Qantas credit card, which has a $199 annual fee, is offering 60,000 Qantas Points for new customers who spend $3,000 on the card in the first 3 months after approval. (Note that offer only runs until 30 June 2018.)

Believe it or not, wine could be a cheaper way to earn Qantas points.

Getting new credit cards isn’t a trick you can use repeatedly, but others can be regularly employed. If you’re signed up to supermarket loyalty schemes, you can convert the points from those into frequent flyer points.

Coles’ flybuys is aligned with Velocity, while Woolworths Rewards can earn points for Qantas. You have to buy food anyway, and you can get more value from frequent flyer points than from $10 supermarket discount vouchers.

A final key tip: don’t buy top-up points for non-flight purchases. It simply isn’t worth it.

Here’s an example: the Qantas Store sells the Apple Watch Nike+ for 94,480 points. If you wanted a 20 per cent top-up of 18,500 points to reach that total, you’d spend $530. The watch itself costs $459, so you’d paying over the odds and blowing your points balance too.

Angus Kidman is the editor-in-chief and points guru for comparison site Finder. Fees correct at time of writing but might change in the future.

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