Redeem points and miles on 5 occasions instead of spending cash
In the world of travel rewards, understanding the value of your points and miles is crucial to making the most out of your hard-earned rewards. Here's a guide to help you navigate the process, ensuring you get the best possible value.
The Air France / Flying Blue program, for instance, offers Promo rewards, which are award "sales" that can make it easier to achieve stellar value. An example of a Promo rewards deal is a one-way economy flight from Chicago to Toulouse, France in November 2024 for 15,000 miles plus $110.40 in airline taxes and fees. This deal offers a value of about 2.5 cents per mile, which is better than the average value of Air France / Flying Blue miles of 1.0 cents each.
Booking airfare in a premium cabin can provide outsized value for travel rewards, especially for international trips. However, if the redemption value for a flight is less than the average value, it's often better to pay cash and save the rewards for another day.
To calculate the average redemption value for travel credit card rewards, divide the cash price of a travel booking by the number of points or miles needed for that booking. For example, if a flight costs $415 or 41,500 miles, the redemption value is about 1 cent per mile.
Many frequent flyer programs will let your rewards lapse if you don't "earn or burn" some of your rewards every 12 to 24 months. So, making a redemption can extend the life of your rewards, even if the award you're booking is subpar.
If you're not interested in earning elite status, you may want to opt for redeeming rewards instead of paying cash. Using travel rewards instead of paying cash can deliver meaningful savings, especially if you're not interested in earning elite status or don't have a specific redemption in mind.
The benefits of elite status are worth pursuing, but using rewards for travel can make travel more affordable and convenient. Elite status benefits, such as free checked bags and priority check-in with airlines, along with room upgrades and free breakfast with hotel loyalty programs, are valuable perks. However, usually, they require spending money to retain.
Remember, the average redemption values vary by program. For example, American Express points average about 1–2 cents per point, Chase Ultimate Rewards 1–2 cents, and others like Capital One miles around 1.7 cents per mile. Being thoughtful about how you redeem your rewards can help you get optimal value.
Lastly, tools like Bankrate's Points or Cash calculator can help make informed decisions about using points or paying cash for travel. By consistently calculating the redemption value and comparing it to your program’s average, you can strategically decide when it’s best to pay with miles or cash.
[1] Source: The Points Guy [2] Source: NerdWallet [3] Source: Forbes [4] Source: CreditCards.com [5] Source: Investopedia
- To maximize the value of technology and finance in your lifestyle, consider utilizing travel rewards in combination with tools such as Bankrate's Points or Cash calculator, like expert advice from sources like The Points Guy, NerdWallet, Forbes, CreditCards.com, and Investopedia suggest.
- When it comes to travel rewards, understanding the average redemption values of your points and miles, such as Air France / Flying Blue miles, American Express points, Chase Ultimate Rewards, and Capital One miles, could provide you with a better lifestyle by achieving superior value and leaving room for exotic experiences or premium cabin bookings.
