Redeeming Points: Do what works best for you!

In the business of booking award tickets you learn that people place a different value on miles and points. Some come up with a fixed value, such as 2 cents per mile for United Miles, and other think in terms of what they can get with their available balances. For example you can fly round trip in business between the US and Southeast Asia for 120,000 United miles. Some say 120,000 United miles are “worth” $2400 and others say they are “worth” 1 round trip in business to Southeast Asia. I tend to think in terms of what I can get and not a dollar value.

Neither one of them are wrong. However, going strictly by how many cents-per-mile is not the best idea. You need to look at your overall financial picture and do what makes sense for you. You also need to understand the ins and outs of all of your miles and points programs in order to be sure you are getting the best value out of them. Rules can and do change so keeping up to date with the latest is also important.

I would never personally pay $2400 for a ticket to Southeast Asia in any class of service. I think of miles and points in terms of what I get when I redeem. I would never pay more than the lowest cash economy price for any flight to anywhere and that is what I base my decision on. I use miles and points so I can get business class or better without the large out of pocket cost. It all comes down to economics and personal budget.

I do use the cents per mile concept to see roughly the value I am getting but it doesn’t weigh too heavily on my decision. If my cash budget doesn’t allow me to buy the flights I want then cents per mile doesn’t matter since what I am willing to pay is effectively $0 (or just the minimal taxes and charges for the award ticket). Points also tend to lose value over time so you are better redeeming them now and saving cash for later or to use on other parts of the trip (hotel, dining, etc.)

Another example: Joe wants to book a round trip flight within the USA. Let’s assume Joe’s budget is to spend $0 by using miles and points for the flights. Finally lets say the only points Joe has available are 25,000 Chase Ultimate Rewards. If the flight prices out at a total of $156 in cash, which is relatively cheap, then using the 2 cents per mile “rule” would say just buy it–because the legacy airlines charge 25,000 miles in economy for US Domestic flights. If booked with United the cents per mile “rule” says 25,000 miles are “worth” $500. However the goal here is to save cash. So 25,000 miles might make sense for Joe. Better yet Joe can book that same itinerary using Chase Ultimate Rewards Travel website and use points to pay for it for only 12,480 Ultimate Rewards Points! This is because the Chase travel website allows you to use Ultimate Rewards points at 1.25 cents each towards cash fares. That is half the number of points that United would charge for the same thing!

In the above example I would advise Joe to book the flight through Chase Ultimate Rewards travel website. He only uses half the points of a normal United redemption and on top of that will earn United miles for the flights since United will consider it a paid fare. If Joe redeemed via united.com using all of his 25,000 Ultimate Rewards points transferred over to United he would have 0 points left in both accounts and not earn any for the flights. You have to go with what is the best overall for your situation! Joe saves 12,520 Ultimate Rewards points and still gets the flights he wants. I call that a win-win.

The point of this article is to get you thinking about all of your options when you are looking to use miles and points for your flights. Does it make more sense to do a traditional redemption with a program such as United MileagePlus? Or is a pay with points option, such as Chase Ultimate Rewards Travel, a better option?

General Guidelines for how to redeem the fewest points:

1. First Or Business Class? — Expensive cash tickets. Almost always makes sense to redeem using a specific airline program over using a pay with points option. This applies to one ways and round trips.
2. Economy Class Flights? — Depends on the cash ticket cost. Price it out both ways and see if a traditional airline program redemption or a pay with points redemption uses less total points.
3. Southwest Airlines? — Special Case. Transferring Chase Ultimate Rewards to Southwest is ALWAYS a better value. Chase gives you 1.25 cents per point towards cash fares and Southwest gives roughly 1.8 on cheaper “Wanna Get Away” fares and this includes all AirTran flights! Points transfer 1:1 from Chase to Southwest instantly. NOTE: Southwest fares do not show on any search except for their own website!
4. One Way Flights? — If in economy class it could go either way–again looking at cash prices. If you are looking to fly on an airline whose program doesn’t offer one way awards then paying with points might be cheaper. Price it both ways to see.

If you have flexible points such as Chase Ultimate Rewards or American Express Membership Rewards always compare the fixed value (using points to buy a cash fare) versus transferring to an airline program and redeeming them. You may be surprised which one costs you less in terms of total points and cash required to book the tickets. Know the rules and features of the programs and made and educated decision before booking!

With so many miles and points programs out there it can be daunting and difficult to remember all of the benefits and options. Our award booking service is here to help with this!

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