You wouldn’t invest your whole 401(k) in a single stock—why put all your credit‑card points in one?

(SeaPRwire) –   Nick Ewen, the editor-in-chief of The Points Guy—a publication dedicated solely to the art of maximizing credit card points and miles—was shocked when he discovered a friend had recently cashed in Amex Membership Rewards points for a vacuum cleaner on Amazon. It was the exact reaction any points enthusiast would have.

“I was like, you can’t do that,” Ewen told . It wasn’t because Amex points aren’t accepted on Amazon (they are), but because utilizing them there obliterates their value. Had they been transferred to the appropriate airline partner, those identical points could have paid for a round-trip ticket. Instead, he purchased an appliance at a redemption rate that valued each point at under a penny.

This is the type of error that occurs when someone amasses all their rewards in a single location without ever learning their true worth or potential applications.

Ewen has spent two decades navigating the points and miles industry, and one of the principles he emphasizes most frequently is diversification. This applies not only to credit cards but also to the reward currencies they generate.

“It’s just like an investment strategy,” he says. “You don’t want to be fully invested in a single stock, because if that stock crashes, you’ll be left with nothing.”

This identical logic applies to loyalty programs. If you direct every dollar of spending toward Delta SkyMiles and Delta subsequently devalues its award chart, hikes redemption costs, or cancels a route you depend on, you are out of luck. You are left with a stockpile of currency that has lost its purchasing power and lacks a backup plan.

“If you are completely committed to Delta SkyMiles and Delta alters something you dislike, you aren’t left with much flexibility,” Ewen says. “Conversely, if you hold miles with Delta, United, and Chase, you insulate yourself against some of those modifications.”

The analogy between points and portfolio management is more than just a figure of speech. Airline loyalty programs are currently valued in the tens of billions of dollars—sometimes exceeding the value of the airlines themselves. During the pandemic, United, Delta, and American together secured $26 billion in debt backed by their frequent flyer programs. United’s MileagePlus alone was valued at $22 billion, more than twice the airline’s equity at the time. American’s AAdvantage was appraised at up to $30 billion, while the airline’s value was under $7 billion. When a points program of that magnitude adjusts its pricing, the impact ripples out to millions of point balances at once. This is why Ewen suggests diversification as a hedge—though it carries its own drawbacks as well.

“It is possible to be spread too thin and over-diversified, particularly if you aren’t spending a significant amount of money each month,” he noted. “It becomes more difficult to accumulate substantial point balances.” Someone spending $3,000 monthly across four distinct programs might never amass enough in any single one to book a significant reward. Conversely, focusing that $3,000 on two carefully selected programs offers a better chance at a useful redemption.

The optimal strategy lies somewhere in the middle and begins by aligning the card with your actual spending habits, rather than what an influencer recommended. “The first question is, what are you aiming to achieve with this?” Ewen asked. “If someone responds, ‘I don’t know, maybe a trip, but I only travel once a year and it’s usually a road trip’—then a cash back card is going to be the ideal choice.”

So, how should I utilize my points?

For those who travel frequently enough to warrant a travel card, Ewen suggests beginning with a flexible points currency (such as Chase Ultimate Rewards, Amex Membership Rewards, or Capital One miles) instead of a co-branded airline or hotel card. A flexible currency can be transferred to various airline and hotel partners, ensuring you aren’t restricted to a single program’s pricing structure.

Consider United credit cards, issued by Chase and favored by dedicated United flyers. However, the Chase Sapphire Preferred, which carries a lower annual fee, actually earns rewards at superior rates on dining, general travel, and online groceries. Since Chase points transfer to United at a 1:1 ratio, you can accumulate more United miles through the Sapphire Preferred than via the United card itself. Additionally, you keep the option to transfer points to Hyatt, Southwest, or any other Chase partner if United’s pricing isn’t suitable for a specific trip.

“Surprisingly, there are often much better alternatives to holding a co-branded credit card,” Ewen stated.

Richard Kerr, General Manager of Travel at Bilt, observes the same trend from the issuer’s perspective. The co-branded card landscape has become so saturated that consumers experience decision fatigue before they even begin to optimize their strategy.

“It’s an incredibly competitive environment now,” Kerr remarks. “There are not only countless options across various airlines and hotels, but each individual airline and hotel offers four or five different cards for you to consider.”

A greater number of cards translates to higher annual fees, increased interchange revenue, and more chances to lock a customer into a specific ecosystem. For consumers, the remedy is identical to the advice a financial advisor would give for an investment portfolio: diversify your risk, understand your holdings, and avoid chasing performance.

“Start with one card. Get comfortable using it,” Ewen advised for anyone entering the points hobby. “Then, if you add a second card with a few different bonus categories, stick with that setup for six months or a year. Make it part of your muscle memory.”

His wife serves as proof of concept: She progressed from relying on a handwritten cheat sheet to instinctively knowing which card to use at the grocery store, gas station, and restaurant.

“It simply became part of her muscle memory,” he said. “It took time to reach that point, but it is crucial not to take on too much at once.”

For everyone else—those who don’t want a cheat sheet, don’t want to track quarterly bonus categories, and simply want to stop losing value without turning it into a second job—both Ewen and Kerr come to the same conclusion.

“It’s never a wrong choice,” Kerr says regarding a no-annual-fee card offering a flat 2% cash back on all purchases.