The Fallacy of Saving Miles for ‘Costly’ Flights

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Once I first began within the miles and factors world again in 2013, it appeared like everybody on-line writing about journey rewards centered on utilizing their factors for flying top notch and staying in five-star accommodations.

It’s enjoyable to examine these sorts of travels, nevertheless it’s simply not how my household (or anybody I do know) sometimes travels. Actually, that was the entire cause I began writing on-line — to inform people who it was OK to drive to your loved ones trip and use your miles and factors to remain on the Vacation Inn Specific.

How a lot are factors value?

To get a way of what redemptions are “greatest” for you, it’s first essential to take inventory of how one can decide the worth of your factors.

That may be laborious to do as a result of worth varies by program. A United MileagePlus mile shouldn’t be value the identical as a Marriott Bonvoy level, which isn’t the identical as a Capital One Enterprise mile.

rule of thumb is to calculate the cents-per-point worth of a selected redemption. On the lookout for a keep on the Intercontinental Magnificent Mile in Chicago? Evaluate the money value to the factors value.

So take the money value of $307 with taxes and charges and divide it by the factors value (50,000 IHG factors on this case). You’ll give you a redemption worth of zero.61 cent per level.

A standard instance of level valuation

I typically see individuals discuss their award redemptions by evaluating the quantity of miles and factors they used to the money value of the identical or related flights. This occurs particularly on premium cabins like enterprise and top notch. I’ve achieved this myself — it’s a enjoyable method to consider redeeming your miles and factors.

For instance, my spouse and I took a firstclass journey to Asia again in 2016. Our routing was Cincinnati to Chicago-O’Hare to Tokyo-Narita to Hong Kong to Singapore, all on one ticket, booked with 62,500 American AAdvantage miles per particular person.

Once I seemed up the money costs of our ticket, I couldn’t discover a strategy to value out your entire itinerary, so I needed to break up it into two fares, which got here to a complete of $16,837.

The whole value, $16,837, divided by 62,500 miles represents a “worth’ of 26.9 cents per mile. Besides it’s not a good comparability. Few individuals would pay greater than $16,000 for a flight from the U.S. to Asia.

If that’s the place you wish to go and the way you wish to use your miles and factors, then by all means don’t let me speak you out of it. However let me provide you with another choice for how one can greatest use your miles and factors.

» Be taught extra: Methods to use journey rewards to afford top notch

Right here’s the ‘greatest’ use of your miles and factors

The perfect use of your miles and factors is the one which will get you the place you wish to go, while you wish to go there, for the least sum of money out of pocket. We all know miles and factors are a deflationary foreign money, so there’s a actual value to holding on to them. You by no means know when that massive journey you’ve had your eye on will immediately go up in value.

By all means, when you’ve got a premium cabin redemption that you’ve your eye on, don’t let me speak you out of it. However as simple as it’s to get miles and factors (whether or not that’s by way of bank card welcome bonuses or different spending), don’t be afraid to make use of your factors to easily enable you to get the place you wish to go in your subsequent journey.

Methods to maximize your rewards

You desire a journey bank card that prioritizes what’s necessary to you. Listed here are our picks for the most effective journey bank cards of 2019, together with these greatest for:

Planning a visit? Try these articles for extra inspiration and recommendation:
Discover the most effective journey bank card for you
How to economize on worldwide flights
Earn extra factors and miles with these 6 methods

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