Should you use cash or points to book your travel? A 2024 guide

This article series on credit cards, points and miles, and travel budgeting is presented in collaboration with The Points Guy.

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We all know that one travel enthusiast (or influencer on our Instagram) who endlessly praises the benefits of points and miles. While it's true that points can unlock amazing luxury travel experiences that are otherwise out of reach for many, there are important considerations. Airlines and hotels increasingly complicate the redemption of points during peak travel seasons while offering lower rates during off-peak times. This can result in situations where using points isn’t the best choice for your travel plans, making cash a more viable option.

Deciding whether to book travel with cash or points hinges on your travel goals and budget. Using points can save you money on travel and enable bookings for high-priced luxury flights and hotels at reduced costs. However, miles can expire and come with numerous restrictions, which may make cash a better choice for certain bookings. Cash offers greater flexibility, as it can be used without any limitations. When determining the best option for your needs, here’s a breakdown to help you decide whether to book travel with cash or points.

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Assess the value of your points

For those just starting with points and miles, navigating various point systems and their values can be daunting. However, understanding the value of your points is essential for deciding whether to use points or cash for your bookings. The worth of your points varies by loyalty program and redemption method, making it a complex issue for newcomers. That's why The Points Guy’s point valuation guide serves as an excellent resource. This guide is updated monthly with detailed data and expert insights.

Transferrable currencies such as American Express Membership Rewards*, Capital One miles, Citi ThankYou points, and Chase Ultimate Rewards are the most valuable types of points. In contrast, budget hotel programs like Best Western Rewards and Choice Privileges® provide the least value. Transferrable rewards offer greater flexibility and redemption options, enabling you to convert points to cash or transfer them to numerous popular loyalty programs. The more redemption possibilities a currency provides—especially in premium travel—the more valuable those points tend to be.

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Evaluate the cash rate against the point rate

After determining the value of your points, compare the cash price of travel to the points required before making a decision. A straightforward way to find the redemption rate is to divide the cost of a flight or hotel by the points needed, then multiply that figure by 100. If the resulting number is lower than The Points Guy's valuation, consider paying with cash.

For instance, if a Hyatt hotel charges 25,000 points and costs $300 per night, you would divide $300 by 25,000 and multiply by 100, resulting in a value of 1.2 cents per point. Since TPG values Hyatt points at 1.7 cents each, paying cash might be the better choice in this case. Remember, these valuations serve as guidelines rather than strict rules; if saving money is your priority over maximizing every point, feel free to book as you prefer.

If you possess transferable points (like Chase Ultimate Rewards or Capital One miles), remember to compare the redemption rates when using their travel portals. For instance, cardholders of the Chase Sapphire Reserve® can redeem Ultimate Rewards points through the Chase Travel℠ portal at a value of 1.5 cents each. Thus, if you're considering a United Airlines award that offers less than 1.5 cents per mile, it may be wiser to redeem your Ultimate Rewards points via the Chase portal rather than transferring them to United.

The same principle applies to hotel redemptions: occasionally, it’s more advantageous to redeem points through travel portals rather than transferring them to a loyalty program. For example, World of Hyatt is a transfer partner for Chase Ultimate Rewards. Free nights at Hyatt hotels can cost between 3,500 to 137,000 points, depending on the hotel category. If a Category 1 hotel costs $52.50 or less, it’s better to book through the Ultimate Rewards portal instead of transferring your points to Hyatt. Conversely, if a high-tier Hyatt award exceeds $2,055, redeeming Hyatt points is a smarter choice since the value surpasses 1.5 cents per point.

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Prime times to book travel using points

Using points to book travel can help you save money by allowing you to spend points earned through rewards programs or credit cards instead of cash. This method is an excellent way to secure discounts on flights, accommodations, and various travel expenses. Moreover, some loyalty programs provide bonus points for bookings, which can enhance your savings even more.

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Award promotion

Both hotels and airlines frequently hold award promotions that can reduce the standard point cost by up to 50%. This presents a fantastic chance to book travel using fewer points than normal. If you encounter a worthwhile award promotion, redeeming your points instead of paying cash can be a smart choice.

Award sales often fly under the radar, so it’s essential to know where to search. Here’s a list of regularly updated award sale pages:

• Air France/KLM Flying Blue Promo Rewards: Enjoy discounts of up to 50% on award redemption rates, including for long-haul international flights.

• Delta SkyMiles Deals: Award bookings available from just 10,000 SkyMiles for a round trip.

• Marriott Point Savers: Offers up to 20% off standard award rates at select hotels.

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Take advantage of point transfer bonuses

Certain credit card issuers provide bonus points when you transfer them to airline or hotel loyalty programs. These transfer bonuses can make even pricey award tickets more accessible. For instance, American Express Membership Rewards* recently offered a 30% bonus for transfers to Virgin Atlantic Flying Club.

Numerous travelers seized this opportunity to book All Nippon Airways (ANA) flights to Japan at a reduced rate. Typically, these awards are a steal, starting at 60,000 points for a round-trip in economy class. However, with the transfer bonus, the price dropped to just 46,200 American Express points. If you were on the fence about opting for a cash ticket instead of redeeming points, this bonus might sway you toward the latter.

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Maximize your points with premium travel

When it comes to booking premium travel, such as business and first-class flights, using points and miles is nearly always advantageous. These high fares can quickly add up, and redeeming points can save you a significant amount of money. Luxury hotels also tend to be pricey, making points a better option than shelling out $500 to $1,500 per night. Although redeeming points for premium travel is generally more beneficial than paying cash, it’s wise to compare cash rates to ensure you’re receiving good value for your points.

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To cut costs (even when cash prices are appealing)

While many travel experts suggest holding onto your miles for the best redemption opportunities, I encourage you to prioritize what works best for you, even if that means using points when cash prices are low. If your aim is to save money, feel free to redeem your points. Not everyone aspires to fly first class or stay in lavish hotels; some prefer to use points to reduce travel costs, and if that’s your preference, go for it!

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When your points are nearing expiration

Letting your points and miles go unused is arguably the worst mistake you can make. While many loyalty programs have introduced no-expiration policies, numerous others still expire after 6-36 months of inactivity. If you don’t earn or redeem miles in that timeframe, you risk losing your valuable points. If your miles are on the verge of expiring, it may be wise to redeem them, even if it’s not at the most favorable rate.

To help you dodge this situation, here’s a rundown of common expiration policies for various airlines and hotel loyalty programs. Being aware of these rules can help you avoid losing your points altogether:

• Frontier Miles – expires after 180 days of inactivity

• Accor Live Limitless – expires after 12 months

• Hilton Honors – expires after 12 months

• IHG Rewards Club – expires after 12 months

• Air Canada Aeroplan – expires after 18 months

• Choice Privileges – expires after 18 months

• Hawaiian Airlines – expires after 18 months

• Wyndham Rewards – expires after 18 months

• Air France/KLM Flying Blue – expires after 24 months

• Alaska Mileage Plan – expires after 24 months

• American AAdvantage – expires after 24 months

• Marriott Bonvoy – expires after 24 months

• World of Hyatt – expires after 24 months

• ANA Mileage Plan – expires after 36 months

• British Airways Executive Club – expires after 36 months

• Iberia Avios – expires after 36 months

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When to consider booking travel with cash

Using points and miles isn’t always the most cost-effective way to travel. At times, booking with cash can be cheaper and more convenient. Paying with cash simplifies the process, eliminating the need to sift through various loyalty programs for the best offers. You can choose any flight or hotel without the hassle of blackout dates or award inventory limitations. Travelers visiting during low seasons may find affordable airfare and hotel packages that are better than standard awards. There are numerous situations where paying cash for travel is a smarter choice than using points. Here are a few examples:

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When airfare and hotel rates are exceptionally low

Choosing to book travel with cash is wise when flights and hotels are so inexpensive that using points isn’t justified. This involves calculating your redemption rate and comparing it to your personal valuations or those from The Points Guy. For instance, if you value United miles at 1.1 cents each, redeeming 20,000 miles for a $250 flight offers a solid value of 1.25 cents per mile.

While it may seem that affordable travel options are scarce these days, you can discover low fares and hotel rates during off-peak seasons. When such rates appear, it might be worthwhile to save your points for a future redemption instead.

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When award prices are excessively high

Opting to pay cash for travel is wise when award prices soar due to dynamic pricing models. These models allow airline loyalty programs to fluctuate their award rates based on demand and other factors to maximize earnings. Airlines such as Delta and United implement dynamic pricing, meaning that when cash fares rise, so do the miles required. For instance, Delta might charge a staggering 82,500 Skymiles for a one-way economy ticket priced at $1,039.

Although this redemption yields a value of 1.2 cents per mile (decent for Delta), using Membership Rewards to book an award flight at such high rates is a poor choice. When award prices are elevated and the value of your miles is diminished, booking your flight with cash is often more beneficial. You can save your points for more favorable redemptions and seek lower cash fares with budget airlines on the same route.

The same concept applies to hotel loyalty programs. Occasionally, hotels run out of standard awards and offer premium rooms at significantly higher point rates. In such cases, booking with cash and using flexible points like Capital One miles toward the expense might be the better option. Alternatively, consider finding a nearby hotel that offers lower cash rates.

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When award availability is lacking

If you can’t find available awards for your chosen travel dates, paying cash might be a smarter choice than using points. Airlines frequently offer a limited number of award seats on specific routes, which tend to get booked quickly. Many also have blackout dates during peak travel times, making saver awards unavailable. In some cases, there may be award space, but it could involve inconvenient multi-stop itineraries.

Although hotel award availability is typically higher, you may encounter difficulties using points during peak times. Alternatively, if you're looking to indulge in a specific room type that isn’t available for points booking, paying cash can be a more logical choice.

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To achieve elite status objectives

Using cash to book travel is also a smart choice when you're nearing your elite status goals. Most airlines do not count award flights toward elite status requirements. If you find yourself a few hotel nights or flight segments short, opting for cash travel instead of using points can be advantageous. The perks of achieving elite status can often outweigh the cost of getting there.

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Are miles more valuable than cash?

Miles can be a fantastic way to save on travel, but their value compared to cash varies based on usage. While many loyalty programs allow you to cash out your points and miles, the conversion rate is significantly lower than redeeming for travel. Typically, business and first-class tickets offer the best redemption value, often surpassing the cash equivalent.

For instance, the Chase Sapphire Preferred® Card provides 60,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening, translating to $750 when redeemed through Chase Travel℠. However, transferring those points to Aer Lingus Aer Club could yield two round-trip economy tickets to Ireland. The points could potentially be worth significantly more than $600 in cash. Even converting them to Hyatt points can result in more than $600 in value when redeemed for hotel stays.

The value of miles compared to cash really hinges on personal preferences and travel habits. Frequent flyers might see collecting and using miles as an excellent way to save money while enjoying travel perks like priority boarding and free checked baggage. Conversely, infrequent travelers might prefer having cash on hand, as it offers more flexibility for purchases without being tied to specific airline rules or restrictions regarding mile usage.

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Is it possible to book travel using both points and cash?

Certain airline and hotel loyalty programs permit the use of a mix of points and cash for award bookings. This option is ideal for those who may not have sufficient points for a full redemption but still wish to reduce travel costs. Combining points and cash can be a beneficial solution. Here are some programs that allow this flexibility.

• Air Canada Aeroplan

• Air France-KLM Flying Blue

• British Airways Executive Club

• Delta SkyMiles

• Iberia Plus

• IHG One

• JetBlue TrueBlue

• Marriott Bonvoy

• World of Hyatt

The specific point-to-cash ratio varies by program and award type. It’s crucial to assess cash prices against point rates to see if points-and-cash awards provide good value. While you might expect an even split, that’s not always how it works.

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Key takeaways

Utilizing both points and cash can be a great strategy for saving on travel expenses. Points tend to be most advantageous during high-demand seasons or for luxury travel options. On the other hand, cash offers greater flexibility for budget-conscious travelers and those who value straightforwardness over maximizing rewards. A balanced approach that incorporates both can help you stretch your travel budget further.

*American Express benefits and offers are subject to terms. Enrollment may be necessary for certain benefits. For more information, visit americanexpress.com.

Editorial note: The views expressed in this article are solely those of the author and do not reflect the opinions of any bank, credit card company, airline, or hotel chain. They have not been reviewed, approved, or endorsed by any of these organizations.