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When to use miles vs. cash for flights

minute read

    It’s exciting to realize you’ve collected enough airline miles or points to cover the cost of a flight, or even a ticket upgrade, but should you always dip into those miles or is cash better in some cases?

    In this article we’ll explore when it might make sense to choose rewards vs. cash when booking your next trip, and spoiler alert — there is math involved!

    Keep in mind as you’re reading this article that when we discuss rewards, this could mean either points or miles or both, depending on the type of rewards program you’re using and the travel you’re booking. Also, when we refer to cash, this includes a debit card or credit card.

    Check your cash and rewards balance

    The first thing you may want to do is check the balance of your credit card rewards. Do you have enough to cover a flight? In addition, you’ll need to decide if your budget allows you to cover this flight in cash. Your current financial situation, including upcoming bills and commitments, may dictate if using cash is even an option.

    When to use cash instead of miles or points

    It can be appealing to know you have some rewards to use for an upcoming trip. But there are situations where it’s wiser to save them for later. In these cases, paying with cash can actually be more advantageous than using your miles or points. Here are a few times that may be the best option.

    If cost of the flight is low

    When the cost of a flight is relatively low, it’s generally more practical to use cash for payment instead of miles or points. This is because using your miles may not outweigh the potential benefits of saving them for a future flight with higher fares. By paying with cash for a low-cost flight, you can preserve your miles for a time when their redemption would yield greater value.

    If the flight is short and within the U.S.

    For short flights within the U.S., it might be more advantageous to use cash instead of redeeming miles. This is primarily because domestic flights tend to have lower fares compared to international or long-haul flights. If the price of the flight is relatively low, it may be beneficial to save your miles for longer and more expensive trips.

    If you have a big trip coming up in the future

    If you have a smaller or less important trip to book now, but know you have a big, international trip coming up next year, you may want to consider spending cash on the shorter trip now and saving those miles. International trips tend to have higher fares, making them prime opportunities for using the value of your miles.

    When to use miles instead of cash

    There are times when it may be advantageous to use your miles instead of cash to purchase a flight. Here are a couple scenarios when that may be the case:

    You need to stay flexible

    One benefit of booking your flight using miles is the flexibility it could offer if your plans change. In the event that you need to cancel your trip and you used miles to purchase the flight, most U.S. airline carriers will refund those miles in full plus any associated fees that you incurred when booking.

    On the other hand, if you book your flight with cash, you’ll typically be offered credit toward a future flight with that airline instead of a refund.

    The cents vs. miles redemption value

    The value of miles or points varies across different programs and situations – they’re not all worth the same. Here’s when you’ll want to do some math. It’s typically considered a good deal if you’re getting 2 cents per mile or more in value.

    Let’s say you have 25,000 miles available to redeem for a round-trip flight within the U.S. The cash price (minus taxes and fees) for that same flight is $300. To determine which option is the better value, you may want to consider working out the following: 

    1. Calculate the value of each mile by dividing the cash price of the ticket by the number of miles required for redemption. In this case, you would divide $300 / 25,000, which equals $0.012 per mile.
    2. If the value per mile is lower than the average value you typically get from redeeming miles (typically 2 cents or more), it may indicate that using cash is the better choice. If the value per mile is higher, it may suggest that redeeming miles would provide better value.

    In this example, the value per mile is lower than the average, therefore paying for the $300 flight in cash would probably be the way to go.

    You’ll want to remember that there are a few other factors that could make the above equation less objective. This includes personal preferences, airline loyalty programs that offer additional perks and which website you book your travel through.

    In addition, as time passes without utilizing your miles, they could become increasingly vulnerable to devaluations. Airlines may adjust their award chart or implement new booking restrictions, and this could potentially result in a reduction of value per mile.

    The bottom line

    Traveling can be pricey, so it’s a good idea to educate yourself on how to maximize your travel budget. Having a better idea of when it might be more beneficial to use rewards for, rather than purchasing, your flight could give you an advantage when stretching those dollars.

    Keep in mind that some credit cards allow you to earn transferable rewards. This means your rewards are not limited to one airline, but rather you accumulate points that could then be transferred to many different travel partners, including hotel chains.

    Flexibility is the key benefit here. When you book travel with Chase, you can use your Ultimate Rewards points, your Chase credit card or a combination of both. This ability to split payment methods might give you the flexibility to book when you're ready instead of having to wait until you've accrued a certain number of rewards.

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