'The Game Is Rigged' Says Kevin O'Leary On Credit Card Points. He Claims They're Inflating Faster Than The Dollar And Always Cashes Out Fast

Kevin O'Leary, the entrepreneur and investor known as Mr. Wonderful from “Shark Tank,” recently shared his thoughts on loyalty programs, describing them as a losing game for consumers.

“Loyalty programs? Don't fall for the hype. Points are inflating faster than the dollar,” O’Leary wrote on X recently. 

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Why O'Leary Cashes Out Quickly

In the same post, he shared a video in which he elaborated further. "Loyalty schemes and point systems. Worthless, worthless," he said. "The inflation in points from airlines is absurd. Just look at what you got 12 months ago for what you get now."

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O'Leary claims that loyalty points, which many consumers accumulate in hopes of earning free flights or other rewards, have lost significant value over time. "People think, oh, I’m going to amass loyalty points. I’m going to fly to Hawaii. You find out that two years ago, it was 30,000 points. Now it’s 170,000 points. There’s nothing you can do about it."

Instead of hoarding points, O'Leary's strategy is to cash them out as soon as possible, taking advantage of any opportunity to spend them before their value drops further. He suggests using them for goods and services wherever possible, like on Amazon AMZN, to avoid being caught in the cycle of point inflation.

"I sign up for every single loyalty program, every single one, any retailer, and I blow them out the second I get them," he said. "If you’re a sharp consumer, you can save about two and a half percent of your entire costs every month by just playing the game right."

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The Drawbacks of Hoarding Points

This approach contrasts with the more traditional strategy of trying to maximize credit card rewards over time, which can be effective but requires financial discipline, strong credit, and careful organization. 

For those who enjoy chasing points, the effort can pay off, but it also comes with risks. If you're not careful, you can end up carrying balances, paying high interest, or even hurting your credit score if you open too many accounts too quickly.

O'Leary also points out that for people earning a high income, chasing points might not be the best use of their time. Even if you manage to earn a million points in a year, that's only about $10,000 in value, which isn’t worth the hassle for everyone.

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Cash Out and Move On

O'Leary's approach is simple: collect points but never hold onto them for long, as he believes “the game is rigged” against those who try to save up for larger rewards. "The most important thing to do with any loyalty program is to spend the points immediately. The second you get them, do not hold on to them."

For those who appreciate convenience, this strategy cuts down on the time spent managing multiple accounts, remembering payment dates, and tracking changing redemption rates. It's a straightforward approach that prioritizes immediate returns over long-term gains.

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