Do I use credit card points for airline tickets?
I'm planning a vacation and want to book some flights. Should I spend credit card points on them, or is there a better way to go about this?
Haven't really done this before, so advice would be appreciated.
There's tons of subreddits and other sites devoted, but generally see how much the points are valued on average, then see if you're redeeming points for a higher value than what it would cost to purchase it outright. However, you can also transfer credit card points to airlines directly which may have even better deals. That's the gist, but there's people here more knowledgeable than me in how to max it.
Thanks Pierogi, I'll look into that. I'm not looking to maximize the points obsessively, I just don't want to waste them unnecessarily.
P.S. nice name, but I prefer Pelmeni :)
one of them is superior, and we know which one that is! XD
but yes, I'm not the most knowledgeable person about it either so I usually just use the points freely, I'm not the best with endlessly researching deals. I do like what used to be Scott's Cheap Flights, the deals there are great. I will say, maybe someone crunched the numbers on this, but credit card points are more for a "free agent" approach, in which you're not necessarily building status with a certain airline. If you envision living in the same place forever, it may be more better to build status via a branded card or whatever with whoever has a hub locally, and they'll oftentimes have their own lounges (though not sure if those are better than the Priority Pass, etc. ones now that everyone can go to those essentially).
Using credit card points effectively is not as simple as it sounds. Unfortunately there is no free lunch in life. Speaking from a UK perspective to YMMV from US.
First thing you want to do is establish some form of baseline value per point - normally you can do this by seeing what you can convert points into which is closest to cash (usually some shopping voucher). E.g. if you can use 100k points for a $500 Walmart voucher, then the minimum value of your points is 0.5cents.
You do not want to buy a plane ticket where the value per point is lower than your baseline value per point. You can check the value per point by dividing the plane ticket you can buy with points to the price of an ALTERNATIVE realistic ticket. What does alternative realistic ticket mean? (I just made up that term). It means, if you weren't to use points to buy this plane ticket, what plane ticket would you realistically buy with cash. This might be with a completely different (maybe budget) airline.
So the value per point = realistic alternative ticket price ÷ points required for targeted plane ticket.
This is basically a cost of capital (baseline points value) Vs return on capital (value of points when buying tickets) calculation.
As with normal valuation protocols, you want to maximise the return on capital. But as long as RoC > CoC, you're creating value.
Depending on the type of points you have (Amex, chase, etc.), I would transfer the points to the airline you intend to fly with (i.e Skymiles, etc), and buy your flights with miles. The points you've built up usually go much further that way. Dont buy flights with credit card points using the credit cards travel portal.. that will drain your points quickly. Just my 2 cents.
tbh, I've tried to find better value via transferring to other airlines, and only in certain occasions is it better value. I was more under the impression that it would be better every single time, but most of the flights I've looked at tended to be better in the travel portal. Maybe I was just unlucky in that regard.
Nihil eum distinctio voluptate debitis cumque in id. Officiis quis hic architecto consequatur quia beatae.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...