Ariana Arghandewal | (TNS) Bankrate.com
If I had a point for every time I got asked about the best way to use points for travel, I’d have enough to fly around the world — twice. After more than ten years in which I turned an interest in loyalty programs into a full-time job, I know how to make my points last as long as possible.
When used correctly, points can be more valuable than cash. You can use them for everything from a staycation at an extended-stay hotel to a first-class trip to the Maldives. You can plan a cross-country road trip with motel pit stops or literally fly around the world. The key is to know what your points are worth and use them wisely. As a general rule, you should aim to get at least 1 cent of value out of each point (though that won’t always be possible).
If you’ve been saving up your points and wondering how best to use them for travel, we’ve got you covered. Here’s everything you need to know about maximizing value from your points and miles:
1. Use points and miles for international business- and first-class tickets
International business- and first-class tickets typically offer the highest-value return for your points and miles. For example:
—A round-trip business-class ticket to Europe typically costs between 80,000 and 140,000 points or miles, while a cash fare for the same route will typically set you back about $5,000.
—An economy-class ticket to Europe typically costs between 30,000 and 60,000 miles round-trip, with cash fares often going as low as $400 during the off-peak season.
As you can see, you’re more likely to get more value for your miles on a premium cabin redemption than on a coach redemption. However, international business- and first-class travel doesn’t just provide the highest redemption value for your rewards — it’s also something most people can’t afford without points and miles. That’s why they’re considered to be the best use of points and miles for travel, as they allow you to keep your expenses low and access travel opportunities that would otherwise be out of reach.
Some of my best mileage redemptions have been flying business and first class. It’s a memorable experience that I’ll never take for granted, and the few times I’ve been able to share it with family members have been equally rewarding. Starting your trip off on a comfortable note with a flatbed seat that lets you rest and enjoy a flight is a special experience that’s worth the splurge.
2. Book luxury (or all-inclusive) hotels and resorts
Luxury hotels can also offer a tremendous return on your points. The Maldives, for example, is a popular destination for maximizing hotel points. Hotels in the Maldives can go well over $1,000 per night, making them a great place to use hotel points and free-night awards.
But one aspect that often gets overlooked is that these “free” luxury hotel stays often come with many additional expenses. Even if you don’t pay for your hotel room, food can be expensive in these remote destinations, and boat and seaplane transfers can cost over $500 per person. Unless you were planning to pay out of pocket for the room anyway, you may not save much money on this type of redemption.
A good option would be to reserve all-inclusive hotels near your home, such as in Mexico and the Caribbean. Hyatt, Hilton and Marriott all have all-inclusive resorts that need a reasonable amount of points. Hyatt’s all-inclusive hotels start at 12,000 points for one night (during the off-peak season). You can easily gather enough points for five free nights using the welcome bonus from the World of Hyatt Credit Card* or Chase Sapphire Preferred® Card.
To explain further, the World of Hyatt Credit Card currently provides up to 65,000 bonus points — you can receive 35,000 points after spending $3,000 in the first three months of opening an account, plus up to 30,000 more points by earning 2X points on purchases (that normally give 1X points) during the first six months after opening the card (on up to $15,000). On the other hand, the Chase Sapphire Preferred currently offers 60,000 bonus points after spending $4,000 in the first three months of account opening.
It’s important to mention that this 12,000-point rate is for two people per room. Hyatt charges an extra 6,500 to 22,000 points for each additional person staying in the same room. However, the great thing about Hyatt’s all-inclusive hotels is that all meals and accommodations are included, making it possible to leave with a $0 bill. That’s not always possible at luxury resorts, where even a trip to the minibar can put a serious dent in your wallet. All-inclusive hotels like these are perfect for budget-conscious travelers who want to have fun without spending too much.
3. Use hotel points for low-category extended hotel stays for families and large groups
There’s more than one way to get value out of hotel points, and I’m a firm believer that extended-stay hotels can be an excellent use of points.
Extended-stay properties tend to be some of the cheapest hotels, often requiring a fraction of the points required by their luxury counterparts. But lower redemption rates don’t impact value. In fact, these affordable hotels often offer high-value perks that will enhance your hotel experience.
For instance, complimentary breakfast is usually included at these types of properties, along with free or affordable parking. Thanks to larger beds and additional sofas, these properties can usually accommodate more than two guests per room. This makes extended-stay properties ideal for families and large groups, allowing them to fit into one room instead of two.
4. Look for great deals on peak travel bookings
During peak travel seasons — such as summer, spring break and the holidays — everything from airfare to hotel rates surge. This can be a great time to use points and miles to keep your costs down.
It’s worth noting that an increasing number of airline and hotel loyalty programs — many of which are highlighted in Bankrate’s travel toolkit — are moving toward dynamic pricing. That means redemption rates will fluctuate based on the cost of airfare and room rates. However, you can still put your points and miles to good use despite dynamic pricing.
Hotel loyalty programs demonstrate how these redemptions can turn out well. For example, a stay at the Westin New York Grand Central over Christmas and New Year’s could cost well over $6,000. The same stay could run you roughly 480,000 Marriott Bonvoy points, giving you a value of 1.25 cents per point. That’s a fantastic value for a Marriott redemption, if you’re able to get the points.
The cost of award flights increases during busy travel times, but it's still worth comparing the value of using points against the cost of paying in cash. For example, I recently used 20,000 Aeroplan points to book a domestic United flight that would have cost $750, which gave me over 3.75 cents per point on an economy-class ticket during peak travel.
5. Plan your travel for times when it's not as busy and try to be flexible with your travel dates
When you book travel during expensive peak seasons, it can make your rewards more valuable, but you can save points and miles by booking during off-peak times.
For instance, American Airlines has specific dates for off-peak travel listed on their award chart for both their own awards and partner awards. Traveling during these off-peak times can save you around 20% on an award ticket. For example, an economy class flight to Europe usually costs 30,000 miles, but during off-peak dates, it's about 22,500 miles.
The same applies to fare-based programs like Southwest Rapid Rewards. By checking their low-fare calendar, you can find great deals on off-peak award tickets. If you're able to be flexible with your travel dates, you can make your points and miles go further by booking off-peak travel.
6. Find opportunities for great deals with different airlines and hotels
Finding sweet-spot awards is a well-kept secret of airline and hotel loyalty programs. These awards are offered at a significantly lower price compared to most other programs, and knowing about them can help you get more out of a limited points or miles balance.
For example, United MileagePlus often requires over 160,000 miles for a round-trip business-class ticket to Europe, while All Nippon Airways (ANA) requires just 88,000 miles for the same flight. With ANA, you can also get a free stopover on these award itineraries, allowing you to book multiple trips for the price of one.
Flights to Hawaii are always popular, and even off-peak travel from the West Coast can cost 40,000 AAdvantage miles or more for a round trip. However, British Airways Executive Club offers a great deal for West Coast travelers, starting at just 13,000 Avios each way.
The joint loyalty program of Air France and KLM, Flying Blue, may not be well-known, but it has hidden deals that can save you miles and cash. For example, you can book a ticket between the U.S. and North Africa for just 100,000 miles, while most other programs require 160,000 miles or more for the same award, making it an excellent deal.
7. Use discounts for staying multiple nights in a row
Many hotel loyalty programs offer the fourth or fifth night free when you book for several consecutive nights, which helps you make the most of your hotel points.
For example, Marriott Bonvoy gives the fifth night free on award stays for all members, while Hilton Honors limits this benefit to cardholders and those who have earned Silver Elite status or higher. Additionally, IHG One Rewards provides the fourth night free on consecutive-night bookings for members with an IHG co-branded credit card like the IHG One Rewards Club Premier credit card.*
8. Exchange rewards for decent value whenever necessary
While following the above advice will ensure maximum value for your points and miles, you should use your rewards however you see fit. If exchanging Chase Ultimate Rewards points for a New Orleans ghost tour makes you happy, then go for it. If using your American AAdvantage miles for a rental car keeps cash in your pocket, do it.
While the best way to use points and miles usually involves exchanging them for international business- and first-class flights, the best way for you to use your own points and miles may differ. Your rewards are yours to use, so you may want to ignore what the influencers are doing and do whatever works best for you.
However, points and miles devalue over time — they may even expire after an extended period of time — so the absolute best way to exchange them is as quickly as possible, for the best value you can get. Don’t hoard them, and don’t let them accumulate and devalue before you have a chance to use them. Further, consider exchanging them for lower-value awards like gift cards if they’re about to expire and you’re not able to keep them active.
The bottom line
The best way to use points and miles for travel comes down to your personal preferences. However, by exchanging them strategically, you can stretch their value further. Take advantage of sweet spot awards, splurge on luxury travel and redeem your points either during peak or off-peak travel seasons.
By planning ahead and comparing cash rates to award prices, you can save money on travel and make the most of your points and miles.
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FAQs
—Credit card points and miles are types of credit card rewards that you can earn for all eligible spending with your card. These types of rewards structures are usually a feature of travel credit cards.
—Whenever you swipe your travel rewards credit card, you’ll earn points or miles for all eligible purchases. For example, you might earn a higher points or miles rate for select types of purchases (such as airfare, rideshares or dining) along with a fixed rate on all other purchases.
—Many points and miles cards allow you to redeem your rewards for different types of travel, cash back, merchandise and gift cards, but redemption options will vary from card to card. Since credit card points and miles are usually a feature of travel credit cards, you’ll typically get the best value for travel-related redemption options.
—The information about the World of Hyatt Credit Card and the IHG One Rewards Club Premier credit card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
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