Beware of Airlines offering “Buy Now Pay Later” programs
The airlines are borrowing the age-old buy-now-pay-later marketing used by many retailers over the decades to get you traveling even if you don’t have enough cash or credit limit on your credit card right now. Now many of the budget airlines (Southwest, Frontier, Allegiant) are offering the travel credit programs offered by Fly Now Pay Later or Uplift. These programs let you purchase travel now and pay for it in small monthly payments over 24 months. For example, instead of paying $1311 for a 3-day air and hotel package to Phoenix, Southwest Airlines uses a company called Uplift to offer you a simple $61 a month payment. In the fine print of the promotion, you read your interest rate being charged is 15%. Instead of Buy Now Pay Later, I think these programs should be called Buy Now Pay More. Please be cautious of using buy now pay later programs as you will pay a hefty surcharge of extremely high interest. CLICK HERE to read an interesting article on the pros and cons of these programs.
Airfares seem crazy high right now – Some are deciding to drive? – I needed a ticket to fly to Pennsylvania in two weeks and was amazed to see the airfare was almost $900 RT. The same day I made the reservation, I saw an email from Southwest and United Airlines offering airfares as low as $59 one way. How can this be? Many people are going to be shocked to see how high airfares are for flying this summer. Basically, there has been so much vacation travel pent-up demand that the limited number of flights the airlines have coming out of COVID have filled up and the only seats left are kept by the airlines to maximize revenue by charging high prices. Airlines have been quietly increasing prices while at the same time offering airfare sales when in fact, the chance of finding a $59 OW airline ticket is like finding a needle in a haystack. I think offering airfare sales when practically speaking there are very few low-fare seats available is not smart for the airlines. That last flight you bought to visit grandma in 2019 for $350 might be double or triple the cost on flights between now and Labor Day. If you have a family of four planning to fly for a vacation, you may look at the airfares and decide to drive this summer.
Airlines working hard to make your frequent flyer miles worth less – Many of the largest airlines in the last few years have quietly moved their frequent flyer loyalty programs from a tiered pricing model to dynamic pricing or selling award seats related to the retail market price. Basically, what this change means is that your frequent flyer miles are rapidly becoming worth less and less. In essence, they are devaluing your miles so it takes a lot more miles to redeem for free tickets. The cost to redeem miles for free tickets has skyrocketed coming out of COVID as the airplanes are filling up this summer. The rule of thumb used to be that a frequent flyer mile was worth about 2 cents. With this new dynamic system, I think your miles are worth about 1 cent or less each. The window of availability to redeem your frequent flyer miles for free tickets is also closing fast for travel domestically this summer. In essence, you will be able to find seats to use your frequent flyer miles, but instead of taking 25,000 for a free roundtrip ticket, the new dynamic pricing model will require as much as 100,000 miles for that same trip, basically devaluing the value of your ff miles from 2 cents apiece to about 0.5 cents each. Ba Humbug!
June is the month you need to check your passport and see if it expires this year – You better take a look this month at your passport and see when it expires as many countries will not let you enter if your passport expires within 6 months of your travel dates. Last year many passport renewal processing centers closed down because of COVID, causing some (like mine) passport renewals to take as much as 5 months to renew. With the current topsy-turvy world of travel, I think you need to plan for passports to take up to 8 weeks for renewal. One option to get passports processed faster than 8 weeks is to pay $60 – $100 extra for an expedited service which only takes 2-3 weeks. If you need to renew your passport, call our office at 402-435-8888 and we can help.
Here is a list of my top 30 Bucket List destinations around the world – Last week, I presented a webinar with my top 30 destinations I recommend you consider adding to your travel bucket list. We recorded the webinar, and if you have some time, you can listen to the recording of the 50-minute presentation. I hope that you will be inspired to use this webinar to update your travel bucket list. If you have any questions or suggestions, please feel free to contact me or one of our friendly travel advisors at 402-435-8888 to help you find the perfect vacation in 2021 and the years to come.