Magical Beginnings vs. banking surpluses

[radiodome21]

I took advantage of it and have no regrets. I thought about rolling them over but decided I’d rather have the nice check. In August I was in Disneyland three days after closing on my direct VGF contract with a February UY so our 2023 Disney trip was covered. If I were to buy again I’d still consider it based on what our vacation outlook is.

 

[SugarSweetLee]

To MB or not to MB, aye, that's my question.

I've been doing lots of research and debating about purchasing my family's first DVC contract and am debating whether I'd want to take advantage of Magical Beginnings to get back a chunk of change right at the start or whether I'd like to use the first year points as "bonus" points over the course of several years since I'd be unlikely to use the first year points during their use year.

I'm wondering if there are people here who've taken advantage of Magical Beginnings and later wished they hadn't, or others who've tried what I'm thinking about and whether they regretted it later.

For a baseline, let's say I bought 300 points this summer...I could get a $6,000 refund on the purchase at current MB rates, or I could bank them all.

If I chose to bank them, when the 2025 usage year starts, let's say I win up booking 330 points worth of stays using my 300 banked plus 30 from the new use year, and then bank 270 for the next year. So essentially, over the course of several years, I'd be able to upgrade my stays, room types, etc.

What I'm trying to debate is the "value" between having the extra points available over several years vs. the up front savings...which I know is a different proposition depending on a lot of factors including individuals' financial situations, but curious to hear some feedback around whether people prefer MB or extra bankable points if you're not planning a trip in your first use year?

We are planning to sell back to improve the purchase price/per point.

 

[HappyDisneyWife]

I've been doing lots of research and debating about purchasing my family's first DVC contract…

I have not had the opportunity to buy with or without MB, but I’ve thought it out & have a few solid reasons why I would “just say no” to it:

#1- I bought my first contract resale & thought I’d be ok with only 2/3 of the current year’s points (it was an excellent deal!) & I ended up being so wrong (landing myself in a constant borrowing state until buying more points), that I determined I would never buy even a partially stripped contract again!!

#2- I’ve kept track of my DVC point stays vs cash rates (inc promos), and I’ve averaged just shy of $40pp when I use them myself (I rarely use them for 1BRs; I book mainly standard view studios & 2BR’s which are the best point values)… so, only getting $20pp wouldn’t be worth it to me (even though it would still be tempting!)

#3- Back to my first point, when this is your first DVC contract- and your research has no doubt pointed out the strong temptation of addonitis- having extra points banked can help keep that at bay… or it can cause you to book an extra/unplanned trip! Either way, it’s a total win-win!!

All that said, at the end of the day, having an additional $20 off pp is a sweet little incentive & you should do whatever is right for you!
Best of luck to you! & Welcome to the club

 

[MyDogTink]

This is the debate in my brain right now. If we add on at Poly, I know I will want to book. I am debating not doing MB (if it’s even offered) and renting out my BWV points. However, claiming the rental as taxable income erodes the set-off amount. Selling back for MB with that being a non-taxable rebate is a more cost effective than renting and claiming the rental on income tax.

 

[wdw_explorer]

After 16 years since our last DVC purchase this OKW (DW's favorite) deal reeled us in and we purchased an additional 300 points (bringing us to 585)

Instead of looking at MB as a possible $20 per point savings I viewed it as $115 per point purchase with the ability to buy a year's allotment of banked points for $20 per point. While I know many others find it worth it, I could not spend 2x the normal maintenance fees for banked points.

In our scenario, the additional saving was paramount, but if not a better option for me would be to get transferred in points that gave us the benefit of both a different home resort to enjoy and longer time usage (i.e. non-banked points)

But to each their own.

 

[Electron_si]

After 16 years since our last DVC purchase this OKW (DW's favorite) deal reeled us in and we purchased an additional 300 points (bringing us to 585)

Instead of looking at MB as a possible $20 per point savings I viewed it as $115 per point purchase with the ability to buy a year's allotment of banked points for $20 per point. While I know many others find it worth it, I could not spend 2x the normal maintenance fees for banked points.

In our scenario, the additional saving was paramount, but if not a better option for me would be to get transferred in points that gave us the benefit of both a different home resort to enjoy and longer time usage (i.e. non-banked points)

But to each their own.

I agree with the offering price of OKW I feel like those points were a much better deal over MB.

When we purchased RIV I was going for lowest effective point cost so I took the MB

 

[chlwodud85]

We did not go direct for our two contract so I don't have real life experience but I have rented out my banked points for the resale contract and if I had gone direct I would 100% utilize the additional $4 per points offer that Disney is offering

Normal rate of rental is approx. $16 per points (going through services, and not directly renting out to others)

The MB is a one time bonus that wont be offered at other times (unless you buy another contract) so why not take that offer and try to get more pts for future bigger trip (or borrow pts for those bigger pts)

hopefully this will help others in there decision (take the limited time offers if its better value)

 

[MagicDVC]

Instead of looking at MB as a possible $20 per point savings I viewed it as $115 per point purchase with the ability to buy a year's allotment of banked points for $20 per point. While I know many others find it worth it, I could not spend 2x the normal maintenance fees for banked points.

I think this is the way to look at it. I would take the MB credit on the current UY, then enjoy and use the contact in years after. We will do MB if we buy more points at PVB. I wish we had the option of MB before as we banked the current years points and have been at a surplus as we only go once a year due to time off. We also rented out points on a resale contract, so in a way we did MB too, except we had to figure out the taxes.

 

[kgou]

I bought VGF during the sale last summer and with MB, all other incentives, and military our price per point came out to about $156/point. of course, the $156/point is how I justified to myself buying the direct points in the first place as I thought that I'd never buy direct...and now, wish that I'd just kept the points I have a Feb UY so I was selling back my '23 points, but if I was selling back the '22 points with a later UY I'd probably now still be glad we took advantage of MB.

not sure if that's helpful perspective or not I also wish I bought about 50 more points at that time but hindsight is 20/20 as they say!

 

[accm]

The problem with extra points, is that you get used to using extra points, and then you need to buy more points. This is what happened with us - bought at the beginning of covid, so had to bank our points. So we started off with 2x the number of points we actually had, so within a month or so of our first trip, we were adding on.

I would mentally use MB to justify purchasing more points than I probably should …. but then actually keep the extra year of points…

We bought a loaded contract recently, and I justified it to my husband that we'd rent out the extra points. He made me keep my word, but now we're running at a deficit again (have already used 270 of our 420 2025 UY points...), which means I'm getting the itch to add on again

 

[AstroBlasters]

The problem with extra points, is that you get used to using extra points, and then you need to buy more points. This is what happened with us - bought at the beginning of covid, so had to bank our points. So we started off with 2x the number of points we actually had, so within a month or so of our first trip, we were adding on.


We bought a loaded contract recently, and I justified it to my husband that we'd rent out the extra points. He made me keep my word, but now we're running at a deficit again (have already used 270 of our 420 2025 UY points...), which means I'm getting the itch to add on again

I get it…. points are fun.

Next year we are going for the DVC trifecta… WDW (BW/VGF), Aulani (OV GV), and Disneyland (VGC) in the same year.

 

[TexasJedi]

Instead of looking at MB as a possible $20 per point savings I viewed it as $115 per point purchase with the ability to buy a year's allotment of banked points for $20 per point. While I know many others find it worth it, I could not spend 2x the normal maintenance fees for banked points.

Why would you have 2x maintenance fees for banked points? Aren't you still responsible for the current UY pro-rated maintenance fees regardless of whether you take MB?

 

[intamin]

Why would you have 2x maintenance fees for banked points? Aren't you still responsible for the current UY pro-rated maintenance fees regardless of whether you take MB?

I think they’re saying the 20 dollars per point is equivalent to double what the maintenance fees cost at most resorts. In order to keep those points, you’re essentially paying double what the maintenance fees would cost for a year. When maintenance fees make up 70% of the cost per point, it gives some perspective that you’re paying over double that amount in some cases.

 

[PolyRob]

@TexasJedi what UY do you plan on selecting, when do you plan on purchasing, what resort do you plan on purchasing, and do you have an upcoming WDW trip planned?

If I was already a member, purchased right before my UY started, and already had my trips planned for the next year I would think it's an easy decision to take MB.

If I was a prospective member looking at buying a new resort that hasn't opened and won't have points until the next UY I would really want to keep the points to bank forward.

If you purchased an August, September, October, or December UY right now you would get 2023 UY points which would be sold back with MB. That means you would get the full 2024 UY allotment on either 8/1, 9/1, 10/1, or 12/1 and you could still bank those forward to the 2025 UY like you outlined in your hypothetical situation. It's too late for a June UY with MB now since you need to decide on taking MB four+ days prior to the start of the UY. I would only consider taking MB as a new member if you plan on purchasing a UY that is still getting 2023 UY points.

 

[zavandor]

If it's your first contract, I'd say keep the points. As a new owner you're excited to use your points and more likely to extend stays to try more resorts or plan extra trips. You'd go to borrowing mode quite quickly. That's how addoniting is fed.
A mistake most people do, when evaluating how much the points are worth, is divide the total cost by the number of years left. That's not fair, the first year points are worth much much more than points coming in 40 years. I don't think $20 pp is an oustanding deal. If you really have no use for the points, MB is better than renting. If you might use them, keep the points.

 

[DonkeyHoTay]

I sold all the points up front through MB at $20 pp and dropped my average cost to $100 pp in the process. I'm booking everything I want to do this year borrowing from 2025 UY. When I get to the next UY, I will just borrow again from 2026. Wouldn't do it any other way, but each person and situation is unique so I don't think there is a one size fits all answer to this question.

 

[TexasJedi]

@TexasJedi what UY do you plan on selecting, when do you plan on purchasing, what resort do you plan on purchasing, and do you have an upcoming WDW trip planned?

If I was already a member, purchased right before my UY started, and already had my trips planned for the next year I would think it's an easy decision to take MB.

If I was a prospective member looking at buying a new resort that hasn't opened and won't have points until the next UY I would really want to keep the points to bank forward.

If you purchased an August, September, October, or December UY right now you would get 2023 UY points which would be sold back with MB. That means you would get the full 2024 UY allotment on either 8/1, 9/1, 10/1, or 12/1 and you could still bank those forward to the 2025 UY like you outlined in your hypothetical situation. It's too late for a June UY with MB now since you need to decide on taking MB four+ days prior to the start of the UY. I would only consider taking MB as a new member if you plan on purchasing a UY that is still getting 2023 UY points.

I'll be at WDW in June and plan to take the onsite tour then for the gift card. I've also got a trip booked for DL this year, which is why I feel comfortable and confident about not "needing" points from now until next summer. Leaning RIV right now because of the incentive cycle and love for Skyliner, but we'll be staying at Poly in June to try it out. Current line of thinking is if we move forward, we'd do so to overlap the next wave of incentive cycles in case something there would work out better.

I think an April UY would be ideal for my family's habits (late May-June trips to WDW annually for several years now). I'd also consider a December UY because we have been on some holiday trips the last couple of years, but don't really consider that an every year thing. But you've got a really good point about 2023 points, which would actually give me an extra year of points over an April UY, and the banking deadline in July would be plenty of wiggle room if summer trip plans needed adjustment. There would be value in an extra year of points whether I used them, banked them, or sold them back via MB.

 

[PolyRob]

I'll be at WDW in June and plan to take the onsite tour then for the gift card. I've also got a trip booked for DL this year, which is why I feel comfortable and confident about not "needing" points from now until next summer. Leaning RIV right now because of the incentive cycle and love for Skyliner, but we'll be staying at Poly in June to try it out. Current line of thinking is if we move forward, we'd do so to overlap the next wave of incentive cycles in case something there would work out better.

I think an April UY would be ideal for my family's habits (late May-June trips to WDW annually for several years now). I'd also consider a December UY because we have been on some holiday trips the last couple of years, but don't really consider that an every year thing. But you've got a really good point about 2023 points, which would actually give me an extra year of points over an April UY, and the banking deadline in July would be plenty of wiggle room if summer trip plans needed adjustment. There would be value in an extra year of points whether I used them, banked them, or sold them back via MB.

Yes, the time of purchase really factors into the current UY allotment of points. A Dec UY would still let you bank 100% by 7/31, but April would probably be safer for built in insurance if you need to cancel a May/June trip. If you do go with April I would personally be less inclined to sell back with MB because you may want those points as a cushion throughout your membership. I personally like banking forward rather than borrowing.

 

[BuzzLightyr]

I think the starting point is thinking about your contract size versus your use needs.
Some are potentially financing and I'd say go with a smaller contract, bank your points and use them.
Some are a bit for affluent and have the flexibility to go with a larger contract than they would need. By buying more points, you qualify for additional incentives which lowers your cost per point. If you have more points that you initially envisioning yourself needing selling those points back to Disney makes a lot of sense.