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With Bank of Montreal now at the controls, a crash landing for Air Miles has been averted.

Enjoy the respite if you have a whack of Air Miles points, and then start thinking about how to redeem them sooner rather than later. The tough economics of running a customer loyalty program brought Air Miles to the brink, and they limit its recovery potential as well.

Once the king of customer loyalty in Canada, Air Miles ran into trouble about six years ago when it announced a plan to have points older than five years expire. Air Miles backtracked after a fierce customer backlash, but the damage was done. “They could never recover from that,” said Patrick Sojka, who as founder of has been following the reward business for more than 20 years.

Mr. Sojka said Air Miles increased the number of points needed to book some flights in recent years, though he noted that it also added booking flexibility. Crushingly, partners such as Sobeys, Safeway, Staples, Rexall and Liquor Control Board of Ontario (LCBO) stores left the program.

Late last week, news broke that Air Miles had filed for bankruptcy protection as a result of heavy debts. BMO then saved the day by signing an agreement to buy Air Miles parent LoyaltyOne Co. BMO said the deal, which requires court approval, would have no impact on Air Miles members collecting or redeeming points.

BMO has talked about reinvigorating Air Miles, and maybe it can. Job one is to sign up some high-profile partners and re-create the feeling that you’re missing out if you don’t have an Air Miles card.

One risk of redeeming your points is that you miss out on a better Air Miles to come. But there’s also a risk that BMO devalues Air Miles points in the future in an attempt to make the program financially stable and profitable. BMO has a history of devaluing its own reward points, as have other players that offer customer loyalty programs.

Truth is, devaluations are part of doing business with customer loyalty programs. “They love to promise a lot,” Mr. Sojka said. “And then the chief financial officer takes a look at the numbers and says, ‘We’re giving away too much. We have to change the program and make it a little less valuable.’”

Also working against Air Miles is the difficulty of getting the program into more stores. Partners that left the program did so because of the cost of participating, Mr. Sojka said. Some found it was cheaper to start their own loyalty programs, or join another program. Sobeys has linked up with Bank of Nova Scotia’s Scene+ program, while the LCBO now offers Aeroplan points.

Air Miles users have also soured on the program. In a Twitter poll I did last week, 52.6 per cent of the 555 participants said they have stopped using Air Miles, 27.4 per cent summed up the program as disappointing, 17.1 per cent said it was OK, but not what it once was, and just 2.9 per cent thought it was good as ever.

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Rob’s personal finance reading list

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A lively discussion on Reddit about how we came to be in a position where the cost of living your life and owning your home came to be so expensive.

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A useful run-through of ways to save on tax in retirement, most of them applicable to couples. Solo seniors will just shake their heads.

Cool Winnipeg

Calgary is a hot spot for people moving out of expensive cities in Ontario and British Columbia, but how about Winnipeg? Here’s a guide to the best spots for food, booze and art in Winnipeg, where the average house price in January was $323,600. The national average price was $612,204, with Calgary at $509,900.

Ask Rob

Q: Should bond mutual funds be sold at a loss because of higher for longer interest rates?

A: Higher for longer? The fallout from the collapse of Silicon Valley Bank suggests the higher for longer outlook is on ice for now. While inflation in the United States is persistent, it’s actually been cooling in Canada. This gives the Bank of Canada reason to keep rates level for now and then possibly lower them late this year or early next. The point is, we don’t know for sure where inflation and rates are going. I’m not sure selling a bond fund now is the right move, in that context.

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.

Today’s financial tool

Thinking of moving to a different province for a cheaper cost of living? Check out this calculator to see how your tax burden would change.

The money-free zone

The new album from country-folk artist Iris Dement, Working’ On a World, is such a pleasure to listen to. Beautiful uplifting music, but with some bite. Start with a the song called The Sacred Now.

From the Twitterverse

Get some historical perspective on the run-up in interest rates from this chart, which goes back to the 1930s.

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