When To Use Points vs. Cash for Booking Travel

Deciding whether to pay with points or cash for your travel starts with learning how to calculate the value of your points. 

Luckily, that’s a cinch. And after a little practice comparing different redemption offers, you’ll feel more confident whenever you have to choose between your miles and your money. 

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How Much Are Miles Worth?

Your miles or points can be worth anything from 0.2 cents to more than 4 cents each,  depending on the type of points they are and what you redeem them for. 

Some easy arithmetic will tell you what value you’re getting per point for any redemption you consider.

How To Calculate Points Value

Here’s how to calculate what your points are worth — and if redeeming them is worth it.

Step 1

Start by finding out how many points or miles are required for your flight or hotel stay. 

In this example, Emirates wants 157,500 miles and $1,079.10 to cover taxes and fees on a one-way business-class flight from San Francisco to Amman, Jordan, for an adventure you’re planning in March.

Step 2

Compare that with the same flight’s cash price, $3,129.10. 

Step 3

Subtract the award flight’s taxes and fees from the flight’s cash price: 

$3,129.10 – $1,079.10 = $2,050 

Step 4

Divide $2,050 by the redemption miles you need (157,500). 

The result is the value you’ll get per point if you go through with the redemption. 

The example above gives a value of about 1.3 cents per point. Is that good enough, or should you hold out for a better deal and pay cash this time? 

Unfortunately, there’s no hard-and-fast rule when it comes to the value per point. Your baseline will depend on the type of points you have and your travel circumstances. 

But asking yourself the following questions can help you determine whether a redemption is worth your points:

1. Are your points flexible?
2. Are your transfer ratios good?
3. Can you afford to pay cash?

1. Are Your Points Flexible?

The more flexible your points are, the more likely you’ll be able to find a high redemption value.

Emirates, for instance, partners with 18 airlines, including United Airlines, Air Canada, and Qantas. 

Instead of redeeming your Emirates miles for an itinerary that gives you a disappointing value, it usually makes sense to keep them for a future flight.

And if you’ve earned your travel points from a transferable-points credit card, you’ll have an even wider network of redemptions to choose from.

COMPARE: Best Travel Credit Cards

For example, using a credit card like the American Express® Gold Card and saving up its American Express Membership Rewards® points provides access to 18 airline loyalty partners you can convert your points to, including Emirates. 

With that in mind, let’s backtrack to our earlier Emirates flight example. If your vacation dates are strict but you’re open to other destinations, it’s worth checking for award flights from Cathay Pacific, another Amex transfer partner.

The San Francisco-Tokyo business class itinerary shown below takes less miles than the flight to Amman: 

And this redemption gives you 3.6 cents per mile, nearly three times the Emirates’ award flight’s value.

Combining flexible travel preferences with flexible points expands your redemption possibilities — and can save you tens of thousands of dollars on flights over time.

READ MORE: How To Use Credit Card Points for Travel

2. Are Your Transfer Ratios Good?

It can also make sense to cover your lodging with points instead of cash, particularly if your points transfer to hotel loyalty programs at favorable ratios.

A night in a king room at the Hilton Conrad Tokyo, above the tranquil Hamarikyu Gardens, costs $1,411 for your March travel dates, which coincide with the start of Japan’s glorious cherry blossom season. 

Alternatively, you can book the room for 95,000 Hilton Honors points, working out to a so-so redemption value of about 1.5 cents per point.

But since your Amex points convert to Hilton Honors points at a 1:2 ratio, you’ll actually need only 47,500 Amex points to book the room, doubling your redemption value to about 3 cents per point.

3. Can You Afford To Pay Cash?

The above examples assume you’re in a financial position to use either cash or points. 

But if you need to travel to an unmissable event — like a wedding, funeral, or a Tokyo Swiftie convention — and funds are tight, the decision to pay with points might be made for you. 

Nonetheless, be sure to explore all the options available before you make your final redemption choice:

• If your points are issued by an airline that belongs to an alliance, check if its alliance partners offer comparable flights for fewer points.
• If your points belong to a credit card loyalty program, check all its transfer partners to see who else offers the award travel you need for the lowest number of points.
• If award flights or nights are scarce and you can’t find a redemption for at least one cent per point, consider redeeming credit card points for the travel you need via your card’s travel portal.

READ MORE: How To Travel for Free with Credit Cards

FAQs

What is the best way to redeem points?

There are many ways to redeem points for travel. But if you want to maximize the value you get, the best way to redeem points is to find an award redemption that requires a low number of points relative to its cash price. 

Do reward points expire?

Yes, many airline and hotel loyalty programs’ reward points expire, including the points for popular programs like Emirates Skywards, Turkish Airlines Miles&Smiles, and Wyndham Rewards. 

However, reward points that belong to these credit card loyalty programs do not expire, as long as you keep your account open and in good standing:

• Chase Ultimate Rewards®
• American Express Membership Rewards®
• Citi ThankYou® points
• Capital One miles
• Bank of America® travel rewards

TL;DR: Is Booking With Points Worth It?

The value of your miles or points can vary wildly, depending on the type of points and how you redeem them. 

Before automatically cashing in your hard-earned miles, calculate the cost of your trip in cash, then see how many points you would need — either through your card’s travel portal or a transfer partner. Anything over 1.5 cents is a good enough deal to use points instead of cash.

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