Better to borrow than to bank DVC points?

[BoardwalkSuzy]

If traveling every other year to WDW, and are attempting to utilize double the points than you get into your account each year (to build up 2 years worth of points), is it safer to get into a cycle of borrowing from the next year, or rather to bank into the following year for use the next year?

I am looking at the risks of a cancelled trip. Say have a use year of Feb and have a trip planned for Sept 2011. Say you bank the Feb 2010 points into 2011 so you can have double the points for better accommodations that next year. THEN you find out you need to cancel that trip 31 days in advance. The banked points will then be lost since can't bank a 2nd time, and Sept is the end of the 8 month window if have Feb use year, correct?

So, to me, it sounds like it's actually much safer to borrow points from the future year, in order to use in current year rather than the other way around using banking, if need double your annual allotment of points every other year. This way if cancel trip prior to 30 day window, then the points aren't lost, and will go back to account? Is this correct? I'm just trying to calculate all the risks.

Do most people get into a cycle of more banking or more borrowing on their points? Considering the add-on contracts, I'm going to guess the answer is "borrowing". Which approach is easier? Which is safer? Any data on that?

 

[bangzoom6877]

We're going on our first trip home in July. Planning to go to WDW every other year for 10 nights. We actually did both banking and borrowing. We bought our DVC membership in late 2008, planning our first trip home this coming July. We banked some 2009 points into 2010, and we also had to borrow some of 2011's points for this year's trip. When the time comes, we will bank the remaining 2011 points into 2012, then when we book 2012's trip, we will use the points we banked, all of 2012's points, plus whatever else we need to borrow from 2013's points to completely cover our stay. We will keep doing this every other year at least until the boys are out of high school (they're only 5 and almost 3 now).

We have an April Use Year. We wanted that so that it would be 3 months before we usually take our big vacation each year. That way it would buy us some time in case we have to cancel a trip at some point.

So, to answer one of your questions, we bank and we borrow for our trips because that's what works for us. We bought a contract we could afford, while letting it still afford us every other year at Disney for a nice long trip. I don't know what most people do though.

 

[5forDiz]

Neither is safer, it does not matter if they are Banked or Borrowed points because
Banking and Borrowing are both final transactions. In a cancelled reservation Banked &/or Borrowed points committed to that reservation must be used by end of the Use Year when the trip was to have taken place.

Points that are banked stay in the Use Year they are banked into and if you borrow points into the Use Year when your trip is to take place they must remain in that Use Year as well even if your trip is cancelled; the borrowed points cannot be "Put Back" so to speak into the Use Year they were originally from.

The most you would be able to do if you were STILL within your banking window at that time you cancel a trip would be to bank the Current Use Year points committed to the reservation if you cancelled the trip at least 31 days or more before the check-in date; between 30 days to 1 day before check-in cancellation will put all your points into Holding Status rendering them unbankable whether or not they are Current UY points or not. Your Current Use Year points are the points that are from the UY allotment during which the trip is to take place but again, you would still need to be within your banking window (first 8 months of UY) to bank those Current UY points ~AND~ the cancellation of the trip would have to be AT LEAST 31 Days or More before check-in date for those Current UY points to be bankable as well.

 

[wdrl]

If traveling every other year to WDW, and are attempting to utilize double the points than you get into your account each year (to build up 2 years worth of points), is it safer to get into a cycle of borrowing from the next year, or rather to bank into the following year for use the next year?

I am looking at the risks of a cancelled trip. Say have a use year of Feb and have a trip planned for Sept 2011. Say you bank the Feb 2010 points into 2011 so you can have double the points for better accommodations that next year. THEN you find out you need to cancel that trip 31 days in advance. The banked points will then be lost since can't bank a 2nd time, and Sept is the end of the 8 month window if have Feb use year, correct?

So, to me, it sounds like it's actually much safer to borrow points from the future year, in order to use in current year rather than the other way around using banking, if need double your annual allotment of points every other year. This way if cancel trip prior to 30 day window, then the points aren't lost, and will go back to account? Is this correct? I'm just trying to calculate all the risks.

Keep in mind that once points are borrowed, they cannot be put back into their original year. For example, lets say you make a reservation for September 2010 using 75 2010 UY points and 75 points borrowed points from your 2011 UY. Then, in July you decide to cancel the September trip. The borrowed points cannot be returned to your 2011 UY. They must be used by the end of the UY in which they were placed; in this case, January 31, 2011. Thus, you are in essentially the same predicament as if you had used banked 2009 points and current UY points to make the reservation.

Perhaps some of the disboard veterans might know whether banking or borrowing is a better strategy. But offhand, I can't discern a difference between either approach in your situation. Good luck on using your points!!!

 

[hakepb]

As mentioned, Once you made the reservation (and banked or borrowed the points) then there's nothing much either can do with those banked or borrowed points in your scenario.

In a very generic theory, it would seem borrowing is better than banking because both are 0% interest transactions, and wouldn't you rather borrow at 0% than save at 0%? Say you used all 2010 points. In July 2010 a major family event happens and you decide to postpone your 2011 vacation plans, you are a little more flexible in a borrowing scenario where your 2011 points can be banked into 2012.

 

[Sandisw]

I also think it is a toss up. When you are on the every other year plan, going with either banked or borrowed points, you will always have a risk of losing points (if you can't reschedule that trip before the UY ends) since both those points will expire.

If you cancel that Sept 2011 vacation, you would have to use up any banked or borrowed points by January 31st, 2011. So, they are not immediately lost, simply lost if you can't use them. Remember, there is always the option to try to rent those points out to recoup some monetary value for them.

That is one of the reasons to have a UY in which you will typically travel toward the beginning. It gives you the flexibility to use up banked or borrowed points if those trips ever have to be cancelled.

 

[kristenrice]

For me, I would rather be in the "banking" cycle than the "borrowing" cycle. We only own 100 points, so if we were continually banking, we could have the option of maybe doing a 1-2 BR instead of a studio for a trip.

Right now, I've borrowed all of our 2011 points already. I am also looking at possibly taking a trip next June which would borrow most of our 2012 points. So, my options are 1) Borrow 2012's points and take a 5 night studio trip in 2011, or 2) Bank 2012's points and have 200 points to play with in 2013. (Dad is treating us to a 7-night Disney vacation in 2012 anyways so we won't be using our points to travel in 2012)

If we opt to bank the 2012 points and travel in 2013, odds are that we will not use all 200 available. We'd probably use about 160 and split our stay between a studio and a 1BR. That means that we could bank them and still have 140 the next year. I would love to get into a cycle of having an "extra" 40-60 points each year, but I think I would just rather add on.

 

[SuzanneSLO]

We travel every other year and end up both banking and borrowing. We use all the current UY points, those banked from the year before and then borrow what we need to complete the reservation. We then bank those points not already borrowed and start over again.

As already pointed out, neither banked nor borrowed are good if you cancel late in your UY and cannot reschedule before the end of your UY. Best of luck -- Suzanne

 

[DenLo]

No banking of borrowed points, or at least that's how I think of it.

I'd rather bank too. There's is just something about having some extra points to stay another night or stay at a different DVC resort. Just adds some spice. Where borrowing makes me nervous that in the future we won't have the points we'll need.

 

[Anna114]

While I would rather be a "banker" I think you run a greater chance of losing those points. If you borrow and use them then they can't be lost. However, if you bank and cancel a trip and can't go again before the end of your UY then those points are lost. Just MHO

 

[BoardwalkSuzy]

We travel every other year and end up both banking and borrowing. We use all the current UY points, those banked from the year before and then borrow what we need to complete the reservation. We then bank those points not already borrowed and start over again.

As already pointed out, neither banked nor borrowed are good if you cancel late in your UY and cannot reschedule before the end of your UY. Best of luck -- Suzanne

You make good sense of it - a little bit of points from here and there, as needed - and never good if have to cancel late. That's why I have another post up about DVC trip insurance - what if one of kids suddenly has 104 degree flu on date of travel involving plane tickets, DVC resort reservation, park tickets, dining plan, etc? The bigger the family, the higher the odds something could go wrong to cause a cancellation.

Seems there's a 3 year window of point options to pull from. I read somewhere here on Disboard that's exactly how the reservation database screen looks like when it's pulled up - a 3 year window appears. The DVC reservation agent can see everything at a glance out of those 3 years, what's been banked, borrowed, currently available, and what's reserved.

Looking at it like that, wow, I could work with 1050 points! I just now am purchasing 350 points, with 350 already banked. Now I'm excited that maybe can do a really nice trip - especially if one every 3 years.

 

[Chuck S]

And, if you travel over the cusp of a use year, you could have 4 years worth of points available. For instance, with a 350 point June use year contract, you could have banked points from 2009 to June 2010. Make a reservation using 700 points (the banked points and current points, with check-out date of June 1, 2011) and another 700 point reservation beignning June 1, 2011, using 2011 and borrowed 2012 points.

 

[dzorn]

I prefer banking than borrowing. With a cancelled trip you take the chance of losing points either way, but if I can just reschule the trip then I have the option of borrowing points if I need more to make the trip happen. If I already borrowed all my points then I might not be able to book what I really want.

We usually book within the first few months of our UY so hopefully any cancellation we could still get something for that year.

Denise in MI

 

[landsm99]

I am a believer in borrowing. We just booked our trip beginning Oct 31. Borrowed all of 2011 points. It falls into the you never know what is going to happen thought process. What if we banked points and then could not travel for some reason.
Would I like to have more points/flexibility. Sure. But we purchased assuming a trip every other year. We have gone every year..borrowing every time. So now I am 'fully borrowed'. We are planing on a cruise in 2011 so we will catch up in time.