Frequent flyer points: an asset with value that many don’t realise

A majority of Australians are members of at least one frequent flyer program, but don’t realise their points are a valuable asset.

Millions of Australians are building big piles of frequent flyer points without understanding their worth as an asset.

Points specialists have seen a rise in people growing large frequent flyer point balances, particularly business owners using rewards credit cards to collect upwards of one million points per year.

Every 100,000 points sitting in a frequent flyer program can be worth as much as $5000 or as little as $500, depending on how they are redeemed.

Qantas and Virgin Australia’s Velocity, which have 17 million and 13 million frequent flyer members, respectively, do not release data about individual members’ balances because of privacy and commercial sensitivity reasons.

However, it is understood that some frequent flyers have amassed more than 20 million points, and there has been a rise in people stockpiling a million points – an asset worth $50,000 when used to redeem business class flights.

Adele Eliseo says Australians are earning more points than ever. Picture: Supplied

The Champagne Mile founder Adele Eliseo said people should treat their points as an asset rather than a perk.

“The true value of points is lost on most frequent flyers, and loyalty programs benefit from that lack of awareness,” she said.

“Almost no one includes frequent flyer balances in the estate planning process, even though Australians are earning more points than ever. If people saw points as a financial asset, they’d take better steps to protect them.

“Million-point balances aren’t publicly tracked, but I often come across them in my work. For SMEs, hitting a seven-figure points balance simply through everyday spend in 12 months or less is very achievable.”

Among Australia’s large-scale point collectors is Ryan Lawson, the founder of furniture business Wattle Living. Since actively starting to collect points in 2023 he has earned millions, and has a current balance of 2.5 million Qantas points that “we can use for our business”.

“I only wish we had started collecting them sooner,” Mr Lawson said.

He said he earned Qantas points through a variety of business activities including international transactions, an American Express Business Rewards credit card for daily costs, and booking accommodation through Qantas Hotels.

Mr Lawson said he saw his frequent flyer points as “a strategic business asset”.

“Travel is essential for refining our products, maintaining strong supplier relationships, and ensuring quality control,” he said. “Leveraging everyday business expenses to unlock more travel means I can be present where and when I need to be – without the extra cost.”

Ryan Lawson, founder of Wattle Living, has 2.5 million Qantas points. Picture: Supplied

Qantas says in the first half of this financial year a record 109 billion points were earned by program members, up 10 per cent, while 87 billion points were redeemed on flights and other ­rewards.

“Thirty-five per cent of all credit card spend in Australia is also on a Qantas points-earning credit card, which represents around 4 per cent of Australia’s GDP,” he said.

The CEO of iFLYflat, Steve Hui, said the easiest way to build huge point balances was to own a business that could pay for expenses using rewards credit cards and frequent flyer program partnerships.

Mr Hui said he believed “tens of thousands” of people had very large point balances, yet many did not consider their asset value.

“They don’t know how many points they need to fly,” he said.

“Most people earn points with no plan, then when they want to go somewhere they look up the (airline) website.

“I think people are still treating them as a perk, as a side thing. They’re not thinking ‘we have these points and they’re worth a certain amount of money’.”

A Velocity Frequent Flyer spokesman said many people knew their points had value but were less clear about how to earn and spend them.

“Particularly in today’s cost-of-living crisis, investing time to understand all of the ways to earn points with everyday spending to then redeem on a host of services and products can help people save money,” he said.

Velocity says points can be earned by flying, shopping, ride-sharing, buying fuel, using credit card programs and more, while popular ways to redeem points include booking reward seats, upgrading to business class, shopping at its rewards store, buying wine, and booking holidays and car ­rentals.

Steve Hui from iFLYflat says many people earn points with no plan. Picture: Supplied

The Champagne Mile’s Ms Eliseo said while points functioned like a currency, their value was not guaranteed.

“Airlines can devalue balances, increase redemption rates, or restrict availability overnight, sometimes without members noticing until it’s too late,” she said.

Ms Eliseo said the value of a point could vary tenfold depending on how it was redeemed. For example, premium flights and upgrades could provide 5c value per point, while using them to buy gift cards returned about 0.5c per point.

“A common trap I see people fall into is paying surcharges to earn points, then redeeming those points for less than they cost,” she said.

Originally published as Frequent flyer points: an asset with value that many don’t realise