For years, points behaved like a stable currency. A flight cost what the chart said it cost, and a balance you built up held its worth until you were ready to use it. Dynamic pricing changed the deal. When the cost of a redemption floats with cash fares and demand, your balance is no longer a fixed amount of travel. It is a number that buys a little less each year. That makes a lot of points a quietly depreciating asset, and it is worth understanding what that means before it costs you.
What actually changed
Under an old-style award chart, a mile was a claim on a specific thing. The chart said a flight to a region was 60,000 miles, and that number sat still for years at a time. Predictable. Plannable.
Dynamic pricing severs that link. Now the points cost tracks the cash price, more or less, which means it drifts up over time the same way cash prices do. There is no chart to defend, no announcement required, no fixed promise to point to. The program can nudge the cost of a redemption upward in small steps, and most people never notice until the trip they were saving for costs noticeably more than it used to.
So the headline is simple. A balance that used to hold its value now slowly leaks it.
Why holding a balance works against you
Think about what a pile of points does while it sits in your account. Nothing. It earns no interest. It is not invested. It does not compound. It just waits, and while it waits, the prices it will eventually face keep climbing.
Compare that to cash in even a basic savings account, which at least earns something. Points do the reverse: they sit still while the target moves away from them. The longer you hold, the wider that gap tends to get. None of this is dramatic in any single year. That is exactly why it is easy to ignore. A few percent here, a chart change there, and five years later the 200,000 miles you were proud of buys meaningfully less than it would have if you had spent it when you earned it.
Does this mean you should stop earning?
No, and this is where people get confused. Earning and holding are two separate decisions.
If you are earning points on spending you would do anyway (groceries, a card you already carry, a trip you already booked), those points are close to free. Earning them still makes sense. The problem is not earning. The problem is accumulating a large balance and then sitting on it for years with no concrete plan. That is the behavior depreciation punishes. So keep earning if it is effortless. Just do not treat the resulting balance like a long-term store of value, because it is not built to be one.
So what are your options?
If you hold a balance and you have absorbed all of the above, there are really only three honest paths. Each one fits a different situation.
Use it. The cleanest answer. If you have a trip you genuinely want and the redemption is reasonable, book it. Points buy the most when you spend them on something you would have paid for anyway, and spending now beats spending later at a higher price. This is the right move when you have a real near-term use.
Watch it. Maybe you do not have a trip lined up yet, but you expect one within a year or so, and the current pricing is tolerable. Fine. Hold, but hold with your eyes open. Set a rough deadline. Keep an eye on award costs for the redemption you have in mind. And know that "watch it" can quietly turn into "hold it forever," which is the trap. Watching is only useful if it ends in a decision.
Cash out. If you have a large balance, no specific plan, and no appetite to chase redemptions, converting points to cash takes the depreciation risk off the table entirely. You trade a number that buys less every year for a fixed amount you control. This is the option people overlook, partly because it feels like admitting the points were never going to become that dream trip. But for an idle balance, locking in today's value can simply be the rational call.
The honest version
Points are useful. They are also a currency the issuer controls completely, one that tends to lose buying power the longer you hold it. That is not a reason to panic and it is not a reason to stop earning. It is a reason to be deliberate. Spend with a plan, or hold with a deadline, or take the value out while it is high.
What does not work is the default behavior: a big balance, no plan, and the vague sense that it will all be worth a fancy trip someday. If that describes your account, it is at least worth knowing what the balance would fetch as cash right now, so the choice is yours instead of the program's.