It’s the struggle of every rewards traveler: points or cash?
For some flights, it’s obvious — like that first-class ticket to Hong Kong you’d never pay cash for.
But what about a winter trip to Mexico? Or that upcoming wedding in Montana?
When to use airline miles vs. cash
The first thing to remember is not to hoard your points. Unlike an investment account, points don’t grow more valuable with age.
In fact, because of frequent devaluations, airline miles and points will only decrease in value. So, when in doubt, use ‘em!
Here are a few more considerations.
If you’re flying first-class international: Miles or points
I’ll illustrate this point in-depth below, but suffice it to say that if you’re flying business or first-class overseas, you usually can get a better deal through your frequent flyer miles.
If you need flexibility: Miles or points
When you use airline miles, you get the added bonus of flexibility. You often can change or cancel a rewards flight for less than it would cost to change a cash flight. So, if you’re not sure about your travel plans, it’s smarter to buy tickets with miles.
If a budget carrier flies that route: Cash
Search for budget carriers that travel your desired route. When I used to fly between Florida and New York, I used Allegiant Air, a budget carrier that cost me around $150 round trip. In that situation, I never even thought about using points — the prices were way too low!
If the award ticket has high taxes and fees: Cash
When you book an award ticket, the taxes and fees can be a nasty surprise. They vary based on the carrier and route, so if you run into outrageous prices, it might be better to use cash. Plus, unlike a rewards flight, you’ll earn miles on any flight for which you pay cash.
The best use of airline miles or points
In general, experts agree that the best use of airline miles or points is for long-haul premium flights, such as first-class or business flights to Asia or Australia.
That’s because — although these flights cost exponentially more than, say, a domestic round trip — you don’t need exponentially more miles.
In other words? You’ll get a lot more value out of your points.
One blogger, for example, redeems her airline miles only if she can get a value of at least two cents per mile or point. Other bloggers assign individual values to each program’s points — and presumably redeem those points only if they get that perceived value.
Once you dive further into the world of travel rewards, you’ll determine how much each point currency is worth to you. In the meantime, you can use cents-per-mile calculations to help you decide whether a flight is worth it.
To show you how it shakes out, let’s compare two different trips.
1. Round-trip economy flight from JFK to SFO: 25,000 miles or $272
$272 ÷ 25,000 miles = $.01/mile
By dividing the price by the miles or points required, you can determine the value of each mile. In this case, each mile is worth approximately 1 cent. Not awful, but not good.
2. First-class flight from JFK to Hong Kong (one way): 62,500 miles or $18,070
$18,070 ÷ 62,500 miles = $.28/mile
Even though it costs nearly triple the miles, this flight is so expensive that the value of each mile is 28 cents! As you can see, it’s a more valuable way to use your miles than the domestic flight.
And how many miles do you need for a free flight? That depends on a lot of factors. One way to check is with RewardExpert’s new flight search engine.
You can filter your search by program and then easily see how many points or miles you’d need with each. It also offers cash prices, courtesy of Skyscanner.
Should you use points or cash?
Through all these calculations, the most important thing to remember is that the decision is up to you.
If your redemption gets you only half a cent per mile but you’re tight on cash and want to use your miles anyway, go for it. If you don’t want to save your miles for a trip across an ocean and would rather use them to visit your aunt in Omaha, Nebraska, do it.
Just don’t forget to send me a postcard from wherever you end up!
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Rates (APR)||Eligible Degrees|
|Get real rates from up to 4 Lenders at once
Check out the testimonials and our in-depth reviews!
|2.63% – 7.75%||Undergrad & Graduate||Visit SoFi|
|2.57% – 6.32%||Undergrad & Graduate||Visit Earnest|
|2.68% – 8.79%||Undergrad & Graduate||Visit Lendkey|
|2.80% – 7.02%||Undergrad & Graduate||Visit Laurel Road|
|2.57% – 6.65%||Undergrad & Graduate||Visit CommonBond|
|2.62% – 8.69%||Undergrad & Graduate||Visit Citizens|