Point Me to First Class with Devon Gimbel MD | The Psychology Behind Points Travel Competency

30. The Psychology Behind Points Travel Competency

Sep 25, 2023

I love discussing individual rewards cards and how best to leverage them, or the specific airlines and hotels that offer the best value for points. But today, I’m covering something that never gets talked about in the points travel world but is really one of the secrets to becoming more proficient when it comes to points travel: The Dunning-Kruger Effect.

The Dunning-Kruger Effect is a type of cognitive bias that causes people to overestimate their knowledge or abilities, particularly in areas where they have little to no experience. While this may be an unfamiliar concept, you can probably already see why having some background on the Dunning-Kruger Effect makes all the difference when you’re learning something new, like points travel. 

Tune in this week to discover how the Dunning-Kruger Effect is impacting how you approach the hobby of points travel. I’m showing you the different stages of the journey when learning the ins and outs of points travel, and how to keep moving through the stages until you reach a point of confidence and competence.


On October 14th 2023, I’m opening up enrollment for Points Made Easy. Enrollment will only be open for one week and this is your last opportunity to join my six-month course this year, so click here to get on the waitlist!


What You’ll Learn from this Episode:

  • What the Dunning-Kruger Effect is and what it can teach us about our limitations.
  • How humans tend to overestimate their abilities and make mistakes they don’t realize they’re making.
  • Why levels of confidence shoot up a lot faster than our levels of competence.
  • The different zones of the Dunning-Kruger Effect and how they apply to points travel.
  • How just a little more knowledge or competence can send your confidence into a nosedive, but that isn’t a bad thing.
  • What it looks like during the most despairing phase of learning the points travel hobby.
  • How to continue expanding your knowledge of points travel, so you can move through the Dunning-Kruger Effect.


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Full Episode Transcript:

Welcome to Point Me to First Class, the only show for employed professionals, entrepreneurs, and business owners who are looking to optimize their higher-than-average expenses to travel the world. I'm your host, Devon Gimbel, and I believe that your expenses are your greatest untapped asset if you know how to leverage them. Ready to dive into the world of credit card points and miles so you can travel more, travel better, and travel often? Let's get started.

Welcome back to the podcast everybody. I hope you're having a fantastic Monday if you're listening in real time when this episode airs, or a fantastic any other day of the week depending on when you like to listen to podcasts. In just a few weeks, on October 14 to be exact, I am opening up enrollment for the final time this year to Points Made Easy, my online course that teaches you everything you need to know to make earning tons of points for the stuff you're already spending money on and using those points to save thousands of dollars on bucket list travel easy. 

You know that one of my biggest beliefs when it comes to those of us with high expenses is that our expenses are assets if you know how to leverage them. So if you've been sitting on the sidelines taking your time learning the basics of points, now is your chance. 

Points Made Easy is a six month course where I walk you through how to create a personalized rewards credit card portfolio to leverage your spend, how to find and book the awards that save you thousands of dollars on travel without your having to struggle through days of unproductive internet flight searches, and how to sustainably earn points year after year so that your points will get you bucket list travel not just one time but over and over. 

If you have dreams of using points to travel anytime next year, if you're already sitting on a pile of points but have no idea how to get the most value out of them and are too scared to use them to book anything because you're worried that you're going to accidentally waste them. Or if you want a comprehensive process for how to earn and use points so that you don't have to figure it out on your own, you have to join me inside Points Made Easy. 

Enrollment opens on October 14, but only for one week. So grab your spot on the waitlist now so that you can be the first to join when doors open. You can join the waitlist at www.pointmetofirstclass.com/pointsmadeeasy. 

Now, one of the things that I am constantly thinking about is how to make learning about and using points easier for you, and that includes everything that I teach inside the Points Made Easy course as well as the topics that I cover on this podcast. As much as I love talking about individual rewards cards and what they're best for or covering specific award flights or hotel stays that offer tons of value for points, I also think a lot about the process of learning itself and where and why I see people getting stuck as they get skilled at this whole hobby of points travel.

Which is why today, I want to cover a topic that isn't often talked about in point circles. When I say it isn't often talked about, I mean that it's never talked about, at least not as far as I can tell. The reason that it's never talked about in points circles is because it doesn't actually have to do with earning or using points, at least not on the surface. But I think this is a really interesting and useful topic to be aware of. I have a feeling that learning about it here is going to help a lot of you in your points journey

What I'm referring to what we're going to be talking about and taking a closer look at today is the Dunning-Kruger Effect and how it applies to getting really skilled at points travel. For those of you not familiar with the concept of the Dunning-Kruger Effect, let's take a little walk down history lane. 

According to the Googles, the concept of the Dunning-Kruger Effect is based on a 1999 paper by Cornell University psychologists David Dunning and Justin Kruger. The pair conducted a study where they tested participants on their logic, grammar, and sense of humor and found that those who performed in the bottom quartile self-reported their skills far above average. In other words, the Dunning-Kruger Effect is a type of cognitive bias that causes people to overestimate their knowledge or abilities, particularly in areas where they have little to no experience. 

Dunning and Kruger’s research revealed that people with low knowledge in a particular area often don't have enough knowledge to recognize their limitations. As a result, they tend to overestimate their abilities and make mistakes they don't realize they're making. We're going to talk about how this relates to points travel in just a minute. 

But first, if you Google Dunning-Kruger Effect, one of the things that you're likely to see is some variation of a graph that charts how people experience confidence based on their level of knowledge or competence in a particular skill. Now, if you're currently in a place where you can bring up this graph, check it out. I think It's really interesting. But for those of you who are listening to this podcast while driving or walking or doing something else where it wouldn't be safe or practical for you to head on over to Google, let me describe what this graph shows. 

So imagine a two dimensional graph that plots confidence along the y-axis from low to high, and plots knowledge or competence against the x-axis also from low to high. The Dunning-Kruger Effect it shows a U-shaped curve that I actually looks more like a cursive U-shape for those of you old enough to know what cursive handwriting is. But essentially, there are four distinct zones of this curve as you move from the very left hand portion of the graph towards the right. Meaning as one's knowledge or competence in a particular area or skill increases, four distinct things happen to their level of confidence. 

Now, you might imagine that when you're starting from zero knowledge or competence in a particular skill, that your confidence is also zero. That as you slowly gain knowledge and competence, your confidence would gradually rise in association with that and look something like a straight line going up at a 45 degree angle. But that's not what happens according to Dunning and Kruger 's findings. 

Instead, the first thing that happens as you move from the most left hand portion of the graph, where one's knowledge or competence in a specific skill shifts from zero to just a tiny bit of knowledge, is that the curve shoots straight up at a very fast incline. So with just a little bit of knowledge or competence in a specific area or skill, a person actually experiences a tremendous amount of confidence in their ability in that area of skill. 

If you check out this graph online, what you'll notice is that at the top of this incline is a peak that is referred to as “the peak of Mount Stupid”. Now, I actually really don't like the word stupid at all, I think it's pretty ableist, but what I think might be more accurate is to call this spot the peak of Mount Ignorance. Because at this point when your confidence in your skills or abilities in one particular area is exponentially higher than your actual knowledge or competence in that area, really, the problem is ignorance. You simply don't know what you don't know. Put another way, ignorance is bliss. 

This first zone of the Dunning-Kruger Effect applied to points travel is usually before you even know that points exist. Or once you're aware of that you can use credit cards to earn points, and those points are worth something. But certainly before you've been introduced to the idea that you can get a hell of a lot more value from your points than what your credit card issuer claims. 

Here are some signs that you're in zone, one of the Dunning-Kruger Effect in the points world. When you're sitting comfortably on top of the peak of Mount Ignorance, you might carry multiple store specific credit cards because they offered you 20% off your first purchase with the card. You make most of your purchases by debit card or cash-back credit card, or maybe you have a rewards credit card, but you use that one card for all of your purchases, and you end up earning one point per dollar on the majority of your expenses on the card. 

Maybe that single rewards card that you have and put almost all of your expenses on is a Delta card or other airline credit cards since you fly them a few times a year. But you don't really know how to redeem those points for travel, and you don't have status in that program. You cash in tens of thousands or hundreds of thousands of transferable points for store gift cards or statement credits, or you use all your points to book travel directly from the travel portal inside your credit card account.

Now I want to make something perfectly clear here in case it sounds like I'm judging these decisions or think that there's something wrong with them. I absolutely am not. For many people, using debit cards, using cash-back credit cards, or choosing to use their transferable points as cash equivalents is not dumb or stupid or ignorant. It's a great financially responsible choice that is aligned with exactly how they want to use their money and reap the rewards of their spending. 

But I think there is a huge difference between earning one point per dollar spent or redeeming all of your points for gift cards because you have no idea there's any other options available to you in terms of how to earn or use points and doing those things because you are aware of the other options, and you've decided they're not a great fit for you. 

So when I talk about being at the peak of Mount Ignorance in terms of points travel, I'm referring specifically to the group of people for whom optimizing points earning and redeeming for travel is a great fit. The only reason they're not earning more points for their expenses, or getting more value from their points is simply because they're not aware that's even possible yet. Most likely, if you're listening to this podcast and it's not the very first episode you've tuned into, you're not actually sitting at the peak of Mount Ignorance anymore, but you can probably remember when you were. 

For me, I actually spent about four years hanging out at the top of Mount Ignorance. I got my very first rewards card, a Chase Sapphire Preferred, when I was doing my fellowship back in 2011. At that time, I vaguely understood that it earn points, but I had no clue what bonus categories were. I had zero points earning strategy. In fact, I continued to mostly use cash for all my purchases for years. 

After three years of intermittently using the card and earning points in no organized fashion, I promptly cashed in every single one of those points for two economy flights purchased through the Chase travel portal. At the time, I thought that was a fantastic deal. I saved $2,500 on flights, after all, and that was a ton of money to me. I was very blissful in my ignorance. 

Fast forward about a year later when I really began learning about the true potential of points for travel. I started to have a very different perspective about using that one single rewards card intermittently to earn points at a fairly low rate. Then using those points for a measly one or 1.25 cents per point redemption value. I actually can't even remember the value of Chase points way back then when I first started using them. Thus began my descent from the top of Mount Ignorance into the second zone of the Dunning-Kruger Effect graph. 

If you check out the graph, what you'll notice is that once you crest the peak of Mount Ignorance, there's a very steep and very precipitous decline almost back down to the bottom of the graph. This reflects the swift decimation of one's confidence as they acquire just a bit more knowledge or competence in a specific skill or ability

This rapid decline in confidence culminates with hitting the lowest point of confidence on the entire graph once you move beyond knowing absolutely nothing. A point that is very accurately labeled as the Valley of Despair. The reason that one's confidence plummets at this point with the acquisition of just a bit more knowledge or skill is because all of a sudden, you know what you don't know. You realize that what you don't know is a lot

Just like the moniker the valley of despair suggests, knowing what you don't know feels terrible. If you are currently in a valley of despair when it comes to mastering points travel, that's probably painfully obvious to you already. You don't need me to point out the signs that will tell you that you're there. But I like to be thorough on this podcast. So let's review the signs of when you're stuck in the valley of despair. 

So two key things happen when you are in the valley of despair. Number one, you start to recognize all the mistakes that you've made in this particular area of knowledge or skill. It's very easy to judge yourself for decisions that you made while you were perched on top of Mount Ignorance. Maybe you realize that you failed to earn the welcome bonus on a rewards card that you applied for last year, not knowing at the time that you had to put a certain amount of spend on the card to earn the bonus.

Maybe you've been putting all of your spend on an Amazon credit card only to realize that the points that you've been earning aren't the kind of points that can actually be transferred to an airline or hotel to book travel. Maybe you remember the time that you redeemed 250,000 Chase points for two round trip economy class flights to Morocco, like I did, and realized that you could have actually flown two people roundtrip in business class for fewer points

Listen, I completely understand what it's like to be wallowing in the valley of despair because I made a lot of mistakes earning and using points too. I think the biggest fallacy of learning a new skill is that any of us can actually avoid this part of the learning curve. Part of the reason that being in the valley of despair is so painful is that just because you are able to identify your mistakes doesn't mean that you automatically know exactly what to do instead. You just have enough knowledge at this point to understand that what you've been doing isn't necessarily the best that you could be doing. 

The second hallmark of the valley of despair is not just that you know what you don't know at this point. It’s that it feels like you're never going to be able to learn enough to master the skill that you're learning. So if you're currently in the valley of despair, do not be surprised if right now you believe that it's going to be impossible to actually get skilled at points travel, or that is going to take forever or be super painful. 

One of the tricky things about the valley of despair when it comes to the points hobby is that it is not just one finite stage of learning that you enter and then pass through and then you're exempt from ever being in again. I wish that it worked like that. Instead in my experience, people tend to slip into the valley of despair in kind of three distinct two phases. 

First, at the very beginning of entering into this hobby before you've even started really earning or using points efficiently. Second, once you've decided to get into points, but you get overwhelmed and how to actually start or which rewards points currency or card is best for you. Third, this can even happen once you're fairly confident about earning points, but you get really discouraged when you start trying to use those points for high value travel. 

Because each of those times in the points journey, understanding the fundamentals of how points work, understanding the methods for maximizing the number of points you can earn for the things that you're already spending money on, and optimizing the value of your points so that you can book business class flights for fewer points than economy class, for example, is itself a mini skill that you need to build as part of your points expertise

So if you're listening to this podcast and you're currently slogging through the valley of despair for the very first time, or if you find yourself back in the valley of despair as you attempt to increase your knowledge or skill in one particular aspect of points travel, like leveraging transfer partners and airline alliances to score amazing award flights with points, please hear me when I say this. Nothing has gone wrong. 

Being in the valley of despair does not mean that you're terrible at earning or using points, or that you are never going to be able to figure it out. It means that you're in the middle of increasing your knowledge and skill when it comes to earning and using points. You're on the path to getting great at this

Just to reiterate this point, I want to talk for a minute about an overlapping concept that I think is really useful here. That's the four stages of competence, which is a model of learning that was first described by a couple of NYU professors in 1960, but was popularized by a guy named Noel Burch in the 70s. 

The stages of competence just describes the experience when moving from incompetence to competence in a particular skill. The first stage of competence when learning a new skill is termed unconscious incompetence. That is when you don't know how to do something, but you're not even aware of not knowing how to do it. This is that state of blissful ignorance that overlaps with sitting at the peak of Mount Ignorance described in the Dunning-Kruger Effect

Like I mentioned before, when you're unconscious of your incompetence in a particular area, the wonderful thing is that it doesn't cause you any grief precisely because you are entirely unconscious of that incompetence. When you really think about it, we're actually all unconsciously incompetent about the vast majority of things in life. 

I am entirely unconsciously incompetent when it comes to being an astronaut, understanding the physical chemistry properties of baking bread, or riding a unicycle. These are all things I have absolutely zero skill in, but being entirely incompetent at them doesn't cause any grief for me because it's honestly never occurred to me to be good at them. 

But things change when we move into the second stage of competence. This is the stage that coincides with the valley of despair. The second stage of competence is known as conscious incompetence. This is when you're aware of a skill, but at the same time, you lack any proficiency in that skill. You're also acutely aware of just how little proficiency you have. 

I think this stage of being consciously incompetent at something we really want to be good at is particularly excruciating when you're someone who's probably high achieving and operating at a very high level of proficiency or expertise in several other areas of your life. At least I know that's what it's like for me when I pass through this phase of learning. 

Being consciously incompetent can be excruciating. Usually what happens here is that it's really easy for us to give up because not only are we aware of how bad we are at a particular skill, but remember that a hallmark of being in the valley of despair is that it feels like there's too much to learn to get out of that place. It can feel impossible to imagine learning enough to get to the point where you are skilled

In the world of points travel, this can look like getting defeated when you first start practicing looking for award flights, especially the award flights that points bloggers or people like me love to talk about. The business class flights on Qatar that only cost 75,000 points one way to India or South Africa, or flying round trip on ANA to Japan for less than 100,000 points in business class, or just getting your family to Florida to spend the holidays with family without having to use 500,000 points to do it. Being consciously incompetent at something means trying it over and over and not getting it right. 

So here's what to do when you find yourself in the valley of despair. First, recognize it as normal and an expected part of learning a new skill. Don't personalize it and think that there's something wrong with you or your potential to get great at points travel if, right now, it's not all making perfect sense. Or if you're seeing other people earn points or use them in a way that you haven't mastered yet. 

Don't think that being very conscious of your incompetence while you're in the valley of despair means that you should just give up trying to get better or learn more about points travel. Here's what to do instead. Just keep going. Whether that's by listening to podcasts like this one, doing your own research on the internet on points blogs or joining points Facebook groups or sharing tips and strategies with friends who are also in points.

You can definitely navigate and pass through the valley of despair on your own, or you can get help doing it. Like I said before, going through the valley of despair is part of everyone's points journey. But it doesn't have to be the main part of your points journey. You will go through it, but getting through it doesn't have to take forever. That is one of the main reasons that I created Points Made Easy, to help you get out of the valley of despair in less time than it might take if you're trying to do it all on your own and to certainly have more fun doing it with help and support.

Whether you navigate the valley of despair on your own or do it inside of Points Made Easy, I promise you it's worth it. Because once you're through this phase of learning, you reach the third zone of the Dunning-Kruger Effect graph, which is a steadily increasing slope in which you're not only rapidly increasing your skills and competence, but your confidence is also rising in proportion.

This zone of the Dunning-Kruger Effect graph is fairly dramatically labeled the Slope of Enlightenment, which seems slightly hyperbolic to me. But the point is that once you persevere through the valley of despair, things get so much better. This sound coincides with the third stage of competence, which is also known as conscious competence. Which means that you're able to employ a particular skill, but it still requires conscious effort. I think that label perfectly describes the experience on the other side of conscious incompetence. 

When you're in the slope of enlightenment when it comes to points travel, or you’ve become consciously competent, here are a few things that happen. You can confidently manage multiple rewards cards and optimize allocating your spend to earn new welcome bonuses and take advantage of individual bonus categories on your cards, even if you do have to think about it first to make sure that you're getting it right. 

You know how to find the transfer partners of different transferable points currencies and use that to strategically decide which rewards cards will be the most next valuable ones for you to get. You learn how to do things like combine points across all your Chase cards together, or how to combine points with your partner, even if you have to read and follow a guide to do it the first couple of times.

You start piecing together award flights or hotel stays using trip reports that other people have posted as a guide. When you're consciously competent at a skill, you're so much better at it than before. But that doesn't mean that you're perfect. Listen, you never have to be. You also experience developing and applying that skill as so much easier, so much less discouraging, and ideally as actually enjoyable while you're also continuing to learn and get better

In the world of points travel, the best part of being consciously competent is that you actually have something to show for it. Once you're in the slope of enlightenment, things feel like they are finally starting to make sense. You're getting approved for new credit cards. Your points balances are increasing as you earn welcome bonuses and points for your everyday spend. You might even start using those points to Book Award travel, which is the really fun part. I think the point of all of this.

The only thing that's more fun than being consciously competent in the third zone of the Dunning-Kruger Effect graph is moving into the fourth and final zone known as the Plateau of Sustainability. Now, I know the plateau of sustainability sounds far less thrilling than being in the prior zone of enlightenment but hear me out. 

At this zone of the graph confidence continues to increase as knowledge and competence increase but at a slightly lower incline than before. Eventually confidence reaches a steady state even as knowledge and skill continue to increase. While eventually you'll no longer get huge hits of dopamine as your confidence and points travel increases, something even better happens.

What happens is that you graduate from the third stage of competence being consciously competent to the fourth and final stage of competence known as unconscious competence. This stage is amazing. Because when you've reached unconscious competence, you're not only incredibly adept at a particular skill, but it no longer requires your dedicated attention to be adept. It becomes automatic.

I'm sure that you know exactly what this is like. If you ever learned how to ride a bike or drive a car, you most likely passed through all of these four stages of competence. At first, you're really bad at it. You know you're bad at it. You're uncoordinated. You probably fell off of your bike a ton of times, or did stuff in the car like slam on the brakes too quickly before you understood how much pressure at what rate slowed the car down so that you didn't give yourself whiplash. 

Even once you've mastered the basics of steering and speeding up or slowing down, there's a phase of conscious competence where you knew how to ride a bike or drive the car but it still required all of your focused attention to do it, and to do it safely. Then at some point, you practice enough. You gain enough experience. You repeat the motions over and over and over again that you become unconsciously competent. 

Now you can get on a bike and just start riding without having to think about balancing yourself. Or you can get in your car, start some music or a podcast, and get straight to work without deliberately thinking about all the motions that it takes to drive a car and tracking each street sign or highway exit along the way. You just know how to do it

The same exact thing is possible with points travel. With enough learning, with enough practice, with enough trying and messing up and trying again and getting better bit by bit, it becomes automatic too. When you're in the plateau of sustainability, or you become unconsciously competent with points travel, here are a couple of things that can happen. 

You carry around 10 rewards card in your wallet and don't have to think about which one to use at the grocery store or which one to make your online purchases with because you just know their different bonus categories. Okay, quick side note here. If the idea of carrying 10 rewards cards freaks you out or is way past your comfort zone, don't worry. You never have to have that many cards unless it's fun or easy for you. You might be surprised that it actually can be fun and easy once you've passed through the other stages of competence to unconscious competence. 

When you're unconsciously competent at points, you can also easily manage one or more points currencies and actually enjoy having the option of using American Express points or Capital One points and can leverage the sweet spots the different programs offer. Speaking of sweet spots, when you're unconsciously competent, you're really familiar with award sweet spots and which airlines offer the cheapest economy and business class flights to different areas of the world. You can search for and book those flights in under an hour instead of it taking hours or days to run awards searches that just turn up empty. 

When you're unconsciously competent at points, you've built up a points reserve so that you can take last minute trips when great points deals do come up. Or you can splurge on business class flights or a hotel suite for your family because you have points to spare. When you're unconsciously competent at points, no part of earning or using points feels like a struggle anymore. It feels more like a game. The prize is taking more trips, traveling more often, or having travel experiences that you wouldn't otherwise choose to spend cash on. At least that's what it feels like to me. 

So here's what I want to leave you with today. Using points to travel is just like any other skill that you have learned and become proficient in. Most likely, you'll move through the zones of the Dunning-Kruger Effect graph and the stages of competence that I described today. You may have already identified which stage you're currently in when it comes to your points proficiency as I described the hallmarks of each stage on this episode. Here's what I want you to take away. 

If you are currently tumbling down from the peak of ignorance or feeling stuck in the valley of despair, don't worry. It's completely normal and expected. It will pass, and it will get so much better. If you heard me describe what it feels like to become unconsciously competent at points travel and you're not there yet but would love to be, and you want to accelerate getting there, I want to invite you, again, to join me inside the Points Made Easy course. 

I teach you the foundations of earning and using points and give you hands on support applying those lessons so that you don't have to stay in the valley of despair. Instead, you can start booking and enjoying amazing points travel. The course opens for enrollment on October 14. You can read more about it and get on the waitlist at www.pointmetofirstclass.com/pointsmadeeasy. That's www.pointmetofirstclass.com/pointsmadeeasy. See you all again next week.

Thank you for joining me for this week's episode of Point Me to First Class. If you want more tips on turning your expenses into travel, visit pointmetofirstclass.com to learn more. See you next week.

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