When You Should -- And Shouldn't -- Use Your Miles

by  Darren Murph | Sep 3, 2014
Credit card
Credit card / Phatchara Bunkhachary/iStock

It’s fairly easy to make travel happen — be it a business trip, a jaunt to see a family member, or a bona fide vacation — when you’ve spare cash laying around. It’s a little tougher when you don’t, but loyalty programs and the ability to collect miles and points have made it possible to enjoy a bit of travel-related adventure, if you're willing to have patience and put in the effort. Understanding and managing miles and points across various platforms, services, and credit cards is no easy task, but here are a few tips on making the most of those unused travel currencies.

When you should: Where points are most useful are on “aspirational" hotels -- think nightly rates more than $300. For me, and for many travelers, those rooms are well out of reach without points. When it becomes a matter of staying with points or not staying at all due to high prices, that’s when I look to points.

Remember, all points and miles have cash value. If you exchange 20,000 points for a hotel room that would’ve cost $500 in cash, your point value is $0.025 per point. If you exchanged that same 20,000 for a room that you could have purchased for $150 in cash, the point value is lowered to $0.00625. If you have the time, it’s wise to comb through properties you’d like to visit and compare how much they cost in cash versus points. As an example, I found that the Park Hyatt Maldives routinely changes upwards of $800 per night for a standard room. However, you can secure that same room for 25,000 Hyatt points. While it’s not always the case, you should generally lean towards using points instead of cash on the most expensive properties.

When you shouldn’t: If you’re looking for a rule of thumb, I typically will not exchange points/miles for a hotel night under $150. By and large, it’s easy to use Priceline to secure mid-range hotels for far less than $150. To boot, properties that aren’t located in exotic locations generally aren’t great uses of points. In Chicago, for example, competition is so fierce that it’s comparatively easy to find a great rate on a hotel. In The Maldives, however, nightly rates below $500 are nearly impossible to find at any of the desirable islands. When you have plenty of lodging options, think twice about using points — you’re likely to find better cash deals through booking engines such as Priceline and Hotwire.

When all else fails: I’ve known mile hoarders that have banked up well over one million airline miles due to frequent business travel, only to see those miles abruptly devalued when their airline of choice makes a drastic program change. Over the past couple of years alone, most of the major airlines have made their miles less valuable, either by charging more for award tickets or by making miles more difficult to earn. Unlike actual cash, there’s little value in holding on to points and miles. History has shown that these currencies will only become less valuable over time, not more.

So, when in doubt, use your miles. My own approach is to set goals on destinations that I want to visit, and only earn enough to make that trip happen. As soon as I generate enough points to cash out on a trip I’ve been yearning to go on, I do it. As an example, I cashed in 120,000 Delta SkyMiles last year in order to fly from the United States to the Maldives in business class; had I waited a few more months, that same ticket would’ve required 140,000 miles.

Have any other great tips on using (or saving) miles/points? Let us know in the comments section below!

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