Kevin O'Learythe entrepreneur and investor, known as Mr. Weird, known as Shark Tank, recently shared his ideas about loyalty programs, calling them a failed game for consumers.
"Loyalty program? Not inclined to hype. Points expand faster than the dollar," O'Leary wrote on X recently.
In the same post, he shares a video which elaborates further. "Loyalty programs and point systems. It's worthless, worthless," he said. "Inflation at the key points of airlines is ridiculous. Just look at everything you got 12 months ago."
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O'Leary claims that over time, many consumers have accumulated loyalty, hoping to get free flights or other rewards. "People think, oh, I'm going to build loyalty. I'm going to fly to Hawaii. You find out two years ago it was 30,000. Now it's 170,000. There's nothing you can do about it."
O'Leary's strategy is not to hoard points, but to take advantage of any opportunity to cash out the value as soon as possible before it falls further. He recommends using them for goods and services wherever possible, such as on Amazon (NASDAQ:AMZN) to avoid being caught by the cycle of point inflation.
“I signed up for every loyalty program, every retailer, get the retailer a second time, and blow them out,” he said. “If you’re a keen consumer, you can save about two percent of your monthly cost by playing the game correctly.”
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This approach contrasts sharply with more traditional strategies that try to maximize credit card rewards over time, which can be effective but requires financial discipline, good credit, and careful organization.
For those who like to chase points, hard work can pay off, but it also comes with risks. If you are not careful, you can end up carrying your balance, paying high interest rates, and even damaging your credit score if your account opens too many accounts too quickly.
O'Leary also noted that for people who earn high incomes, chasing points may not be the best use of their time. Even if you earn a million points in a year, it's worth only $10,000, which is not worth it for everyone.
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O'Leary's approach is simple: collect points, but never lasts for a long time, because he thinks "the game is manipulated" with those trying to save bigger rewards. "The most important thing about using any loyalty program is to spend points right away. You don't stick with it for the second second."
For those who appreciate convenience, this strategy reduces the time to manage multiple accounts, remember payment dates, and tracks changes in redemption rates. This is a straightforward approach, prioritizing immediate returns over long-term gains.
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Kevin O'Leary said on the credit card point that this article "the game is manipulated." He claimed that they were expanding faster than the dollar, always cashing out quickly, initially appeared on benzinga.com
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