Travel Rewards Credit Cards

Sep 08

What survey points and Bose headphones have in common

(I had prepared to do a longer post today, but life happens. Tomorrow will be more substantial, unless life happens again.)

Surveys are often long and annoying, but they’re an easy way to accumulate miles. My favorite is E-rewards, which will send you several 10-15 minute surveys per week, each for some amount of proprietary currency (which they coincidentally call “dollars,” likely to fool you into thinking that it is real cash). $100 e-rewards is worth 2,000 miles on JetBlue, United, Southwest or Virgin (and possibly others that I couldn’t find). You can also get restaurant gift cards, hotel/rental car gift cards or other goodies. If you want the miles, you have to sign up through the particular airline offering them (They all have links on their mileage offer pages.). Other merchants are available through any sign-up.  I’m doing JetBlue and accumulating miles to treat myself to a Mint flight someday, since I’d never pay for it out of my own pocket. It will take a while, but I can sit here and do surveys while watching TV.

A few years ago, I shelled out 35,000 Membership Rewards points (proprietary points from American Express) for a pair of Bose noise-cancelling headphones. I didn’t actually need the headphones-the $2 pair from Radio Shack really serve my purposes just fine. But I had tried them on at a store once and not only were they comfortable but the sound quality was incredible. Like the Mint flight, I would never actually pay for the headphones out of pocket, but in this case, I was just using points, so it’s different, right?

Wrong. In both cases, I was guilty of something that a behavior finance professor would call “bucketing,”* or mental accounting. In the first example, the JetBlue points from surveys count just the same as from flights. Why should I view them differently? The second example is potentially more harmful, though. 35,000 MR points is worth approximately $350. I have no problem paying 35,000 points for a pair of headphones that I don’t need because it came from my “rewards” bucket. If you had asked me to pull out my credit card to pay for them, however, I would have headed right for Radio Shack.** But why should it make a difference? $350 worth of rewards points, if exchangeable for cash, are worth the same thing as $350 in the bank. And I should have treated them that way.***

But I really love my headphones.

 

 

*This phenomenon is also known as the “I-couldn’t-possibly-eat-another-piece-of-dinner-but-a-piece-of-apple-pie-sure-sounds-good” heuristic.

**Next time you’re in a casino, take a look at a slot machine. See how they list your money as “credits?” There’s a reason they don’t use dollar signs or show you anything that looks like a cash amount. Casinos are about as good as they get in terms of using subtle nudges to separate you from your cash, and reading about them is fascinating, if not a little scary.

***That’s also the reason that, when you trade 120,000 miles for a business class flight that sells for $10,000, you’re not really getting $10,000 of value, since you would never have paid $10,000 in the first place. This is a topic that frequent flyer geeks, er, “junkies” debate endlessly. We make Trekkies look cool.

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