Beginner’s Guide Part 3: Leveraging Redemptions for the Best Value

Leveraging Redemptions for the Best Value is Part 3 of 4 in the Just Carrying On Miles and Points Beginner’s Guide, an introduction to the world of earning and using miles and points to help you travel the world and spend less money doing it. This Beginner’s Guide is meant to be short and sweet. It isn’t comprehensive. But throughout the guide I will point you to additional resources if you’d like to dive deeper. To read the rest of the Miles and Points Beginner’s Guide, follow the links below:

Part 3 – Leveraging Redemptions for the Best Value

Earning miles and points is a fun and necessary first step in the miles and points hobby. But just as important is finding the redemptions for those miles and points that provide you the best value. Part 3 of the Beginner’s Guide reviews the important considerations as you look to make the best use of your miles and points.

Not all award programs are created equal

There are really two categories of miles and points award programs: those that are tied to specific frequent flyer miles programs or hotel points programs and therefore can only be used within that program (like United Mileage Plus or Marriott Rewards) and those that are tied to a bank and can later be transferred to a specific airline or hotel-based program of your choosing (like Chase Ultimate Rewards and Citi ThankYou Points). When earning points, all are good options but bank-based miles and points are more flexible.

Not all miles and points are created equal

Miles and points have different inherent values, based on many factors. Bloggers have done complicated math to figure out, in terms of cents/mile and cents/point, what those values are. For instance, Starwood Preferred Guest points (SPG is a hotel chain) are the most valuable points out there (2.2 cents/point), meaning you can get more value per point when it comes time to redeem them. They are also valuable in their flexibility, because they can be transferred to different airlines (similar to bank-based rewards above). In contrast, Hilton and Club Carlson (two other hotel programs) have some of the least valuable points (0.4 cents/point) and cannot be transferred outside their own programs. The more valuable the points, the more difficult they usually are to acquire.

Even within a single award program, not all redemptions are created equal!

Ok, this is where the those who like to find a good deal really shine. Let’s go back to SPG points for a minute. You have lots of choices for how to use these points. For example, you can redeem them for a hotel room, an experience (SPG Moments), or transfer them to a frequent flyer program. No matter which option you choose, there are good redemptions and bad redemptions. The goal is always to maximize the redemption. For instance, you wouldn’t want to use 10,000 SPG points for a $150 hotel room (1.5 cents/point) if you could use 4,000 SPG points for a $100 hotel room instead (2.5 cents/point) because getting more cents/point on your redemption means you’re spending your points more wisely.

Can you give me another example?

Say you have 20,000 SPG points and you want to transfer them to a frequent flyer program instead of redeeming them for a hotel room (there are over 30 airline partners to choose from, each with their own exchange rate). You could transfer all your SPG points into your United MileagePlus program account at a ratio of 2 SPG points to 1 United mile. This would convert your 20,000 SPG points into 10,000 United miles. Alternatively, you could transfer them to your Alaska Mileage Plan account at a 1:1 ratio and end up with 20,000 Alaska miles. In this scenario, transferring to Alaska is a better deal, both because you end up with twice as many miles due to the difference in exchange rates, but also because Alaska miles (1.8 cents/mile) are inherently more valuable than United miles (1.4 cents/mile).

You’ve lost me—what are you even talking about anymore?

This is where the details can become overwhelming. If you want to read more about specific high-value redemptions (business class redemptions have far more value than economy), pitfalls to avoid (like closing a card and losing all your miles in the process), tricks for finding award availability (by utilizing specific partner airline websites), and award program sweet spots (maximizing free stopover routing rules), I suggest you visit our Miles and Points Favorite Sites and Resources page. Sign-up for the daily email digests of the various websites listed and you’ll be well versed in the hobby in no time.

I just want to use my miles and points to travel cheaply

If you just want to dip your toes into the miles and points game, that’s great! You don’t need to sign up for lots of credit cards, become a member of every frequent flyer program, and learn all the tricks of the trade. Instead, think about what trip you want to take and target the miles and points you need to make that trip a reality. Perhaps you take it slow and sign up for one new credit card (our Top 5 Travel Credit Cards page has recommendations), earn the sign-up bonus, and then cancel it before the annual fee comes due. Maybe you do the same thing the next year. Remember, you don’t have to jump in head first or become an expert to travel cheaply with miles and points.

Use Google search to tailor your miles and points to your specific needs

There is so much written about miles and points that there is often a specific website dedicated to the exact question you might have (if not, leave a comment below!). Say you want to travel to Hawaii for a week and stay at a resort for 6 nights. Google search “best way to get to Hawaii with miles” and “best hotel redemptions in Hawaii using points” and specifically target those redemptions with credit card sign-up bonuses. Maybe you have a fair number of Southwest points and you want to get the most bang for your points. Google search “best uses for Southwest miles” and find a high-value redemption that makes sense for you.

The Big Picture

Just by knowing that not all award programs are created equal, not all miles and points are created equal, and not all redemptions are created equal will help you make the most of your hard-earned miles and points. To make sure you do, continue on to the last of our Miles and Points Beginner’s Guide Part 4 – Coming Out on Top.

Still have a question about the basics? Leave a comment below!

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