There's a story making the rounds about criminals stealing frequent flyer miles and then reselling them.
It caught my attention because it characterized the criminals as "hackers," as it appears the theft is taking place by gaining access to travelers' frequent flyer accounts.
In the story, Alaska Airlines was listed because the airline's frequent flyer miles were available for purchase on the "dark web."
First off, I consider myself a "travel hacker" although I don't engage in this sort of criminal activity. Rather, I take advantage of the "hidden in plain sight" deals available to get gobs of miles and points to help defray the cost of airline tickets and hotels.
Should travelers be concerned that their frequent flyer accounts might be hacked? I suppose so. After all, here in Alaska the frequent flyer accounts are sort of a savings account for travelers who need to make last-minute or family-emergency trips. I have friends who own businesses and gas up their fleets using the Alaska Airlines credit card. Some of them bank upwards of a million miles per year. So if someone hacked into their account, it could be a bad thing.
But there's a big difference between a traditional savings account and your Mileage Plan account with Alaska Airlines. With a savings account, you earn a little bit of interest on your money. But nothing depreciates faster than airline miles. The redemption levels are going up all the time. It's called "mileage inflation" and it's why the three magic words for travel hackers are "earn and burn." That means you have to earn the miles—and then you have to use them before they lose their value.
For example, Alaska Airlines has done a good job offering deals for Mileage Plan members. But you have to work for them. You can get a one-way ticket from Anchorage to Seattle for as little as 10,000 miles. You have to plan three weeks in advance to qualify. For the cheapest tickets, you have to connect in Juneau. For any nonstop flight on Friday, Oct. 19, it will cost you at least 20,000 miles one-way. First class is 60,000 miles one-way between Anchorage and Seattle.
At those levels, you're better off to buy a coach ticket from Anchorage to Seattle (for $152 on that date).
In the "hacker" story, the transactions are completed using crypto-currency like Bitcoin. It's interesting, since frequent flyer miles also are a sort of shadow currency — and that's one reason you should use them quickly before they lose their value.
For example, you could earn 30,000 Alaska Airlines miles just by getting one of their Visa cards from Bank of America. There's a $75 fee and you have to charge $1,000 on the card within 90 days. But that's easy if you plan on buying airline tickets or shopping at Costco.
I have two of the cards — and I've had as many as three of them at once. So you could get three of the cards yourself for $225 in fees. After charging $3,000 on the cards, you could net 90,000 Alaska Airlines miles without ever stepping on an airplane. Congratulations — you're a travel hacker. That doesn't include the companion fare offer that you receive with each card.
These mileage-building schemes are not secrets. I've heard of folks who routinely apply for five or six Alaska Airlines cards every few weeks just to get the bonuses. Then, after they've received the bonus miles and the companion passes, they cancel the cards, reapply and start the cycle all over again.
Airline mileage strategy is just one chapter in a travel hacker's playbook, though. Hotel costs can easily outstrip the cost of a flight. Travelers know this. Banks know this and the hotels know it too. That's why there's a concentrated effort to use hotel stays as bait for travelers to get another credit card.
Hilton Hotels has a great loyalty plan called Hilton Honors. They're offering a co-branded promotion with American Express that comes with 125,000 Hilton Honors bonus points. The card costs $95 per year and there's a "minimum spend" of $3,000 in the first 90 days. But cardholders get "gold" status at Hilton Hotels (including Embassy Suites, Hampton Inns and a bunch of other Hilton brands). Also included in the offer are 10 free airport passes from Priority Pass.
Another American Express offer is the Starwood Preferred Guest card, which includes 100,000 SPG points. The card is an updated offer to include Marriott Rewards, which was folded into the SPG program when Marriott bought Starwood (Westin, Sheraton, etc.). The $95 fee is waived for the first year on this offer. Sure, 100,000 points is a lot, but the new SPG plan is a watered-down version of the old plan, so I'm not buying it. But if you love Marriott, Westin or the other hotels included in the plan, the card is worth considering.
In addition to hotel-only or airline-only cards, I like the "flexible spend" reward cards like the Chase Sapphire Reserve card. You can move the points around to several loyalty plans (hotel and airline), depending on your travel itinerary. I like it, particularly the ability to transfer to Hyatt Hotels. Even though the annual fee is $450, there's a $300 travel credit and it includes a Priority Pass membership for airport lounges. American Express also offers several "flexible spend" cards with their Membership Rewards plans.
So sure, it's a good idea to protect your frequent flyer account from hackers. But the best way to protect the value is to get busy and use the miles. Plus, try a little "hacking" on your own to score some extra perks on your next trip.