Guest Author - Jill Browne

Loyalty points are everywhere, from "get the 12th donut free" to the airline frequent flier plans, credit card points, and on and on.

Where's the value?

This is how I analyse it.

1. Will I ever use these loyalty points? If not, can I sign up for something else I will use? For example, some of the hotel chains have their own loyalty points, but you can also choose to get points on one of the major airline plans instead. It isn't always the same number of points. But if I rarely stay at that particular chain, I may never cash in the hotel's own points. I almost always choose to get points on the airline plan, where there is at least a chance I will cash the points in sometime.

2. Do I have to pay to get the points? If so, are they really worth it? I have to measure the savings from the points – assuming I'm going to use them before they expire – against the cost of signing up for the program. So far, the only plans I have signed up for are the one on my credit card, and one at a bookstore where the 10 percent discount on every purchase quickly covers my card cost.

3. Are there opportunities for double-dipping, or for getting lots of points on my ordinary purchases? Here is where I love my credit card. (I can't believe I said that). I get AirMiles every time I pay with my MasterCard. If I'm shopping for groceries at Safeway, I get AirMiles for shopping at Safeway. Shopping at Safeway and paying with MasterCard gets me two piles of AirMiles.

4. Can the points be used to buy non-travel items? This is a twist on question #1. I have used my AirMiles to buy a toaster oven and a lot of Starbucks cards, which I can use as cash. The conversion rate on these purchases (the number of AirMiles I have to give up per dollar of purchase) may not be that great, but it is still cash I can put toward travel experiences.

And let me say for the record, since I have been so positive about AirMiles above, that I have never tried to use AirMiles to purchase a flight. Well, I've tried, but I was on hold on the phone for so long, I started looking for ways to use AirMiles on line instead. That is how I got into using them to buy non-travel items. My time is too valuable to sit on hold forever!

The bottom line on loyalty points is, if you can collect them at no cost and if you will use them for items you would have purchased anyway, then you should collect them. The value lies in the cash you save, which you can then put toward travel.