6 Questions To Ask Before Redeeming Your Points and Miles

Here at Upgraded Points, we pride ourselves on being points and miles experts, providing the best and most honest information out there. However, even though we live and breathe points and miles, we can often make costly mistakes, whether by overlooking something or not thinking things through.

The points and miles landscape has become more complicated over the years, with dynamic pricing, constantly changing award partners, varying transfer bonuses, and frequent loyalty program devaluations. To avoid some of these mistakes, it is a good idea to ask questions to ensure you are making a good redemption.

Here’s a look at some questions that many experienced points and miles collectors ask themselves before redeeming points and miles.

The Points and Miles Game Is Evolving

If you have been in the points and miles hobby for years, you probably know the basics quite well. You know that transferring points to airline and hotel transfer partners can unlock outsized value.

You know that premium cabin seats can be significantly cheaper when booked with miles than when paid for in cash. You know better than to redeem 100,000 points for a $400 hotel night, just because you have the points and the booking page gives you that option.

But even if you know all the basics, or you are an expert like many of us here at Upgraded Points, it’s a good idea to ask yourself some questions to make sure the award redemption you’re considering is worth your points and miles.

1. Have I Confirmed Award Space Before I Transfer Points?

Experienced points and miles collectors sometimes think ahead to potential award redemptions. While that can be a good idea, it can sometimes lead to pitfalls.

Transferable points currencies, like American Express Membership Rewards, Chase Ultimate Rewards, Capital One Miles, or Citi ThankYou Rewards, are extremely valuable thanks to their flexibility.

Often, programs run limited-time transfer bonuses, which provide an excellent way to earn thousands of additional points and miles. However, bank transfers to airline and hotel loyalty programs are almost always one-way, and once transferred, points can’t be moved back and the flexibility disappears.

If a specific award disappears before the points arrive in your frequent flyer program — or if the desired dates are no longer available — you may be stuck with points or miles in a program you do not need anymore.

Just last year, I transferred 50,000 Chase Ultimate Rewards points to Virgin Atlantic Flying Club to book an ANA business class award. Though I was fairly confident I could book the award, the award space vanished within minutes of my first seeing it.

Fortunately, I was able to book the same award a few days later. I would not consider that the norm, and I just got extremely lucky.

The right approach is to first find the exact award, confirm the points requirement, taxes and fees, and award availability, then transfer the required points. While that may not always work, especially with points transfers that can take days, you do not want to be stuck with points you otherwise can’t use.

However, there is a caveat to this. There are a few situations where a speculative transfer may be a good idea. This includes situations such as a significant transfer bonus, consistent use of a loyalty program, booking highly competitive awards, or an impending change to an award chart.

Hot Tip:

Award availability is never guaranteed. Even with careful planning, you may not secure an award. Additionally, transferable points are often more useful than airline miles or hotel points and should generally only be transferred when you have a specific redemption in mind.

2. Am I Chasing a High ”Cents per Point” Number Instead of Real Value?

One of the most persistent habits in the points and miles community is obsessing over “cents per point” valuations. Many travelers, including experienced collectors, become so focused on maximizing each and every point that they overlook whether the award redemption actually makes sense for them.

For example, using 80,000 points for an expensive business class ticket may yield an exceptional theoretical value. However, if you would never pay the equivalent cash price for that ticket, the overall calculation can be misleading.

On the other hand, a lower-value economy redemption can be a great idea if it saves cash and better fits your travel plans. Over the years, I prioritized redeeming points and miles for premium cabins only. I have changed this philosophy in recent months, because I’ve been booking a lot of flights, and saving money here and there has really added up.

This is one aspect of points and miles I still contend with, though not nearly as much as I have in years past. Nowadays, getting 1.25 cents per point is fine if it means I can save $600 out of my pocket.

The best approach is to think of cents per point as a measurement tool and not a goal. You should always compare the points cost to the cash price you would realistically pay for that award, rather than an inflated theoretical number that makes your award redemption feel more special.

Questioning what price you would pay instead of using points or miles ultimately determines if you are getting good value.

3. Have I Considered Dynamic Award Pricing?

In the past, having years of experience with traditional award charts was a good thing. However, that is not really the case nowadays, because many airline loyalty programs have switched to dynamic pricing.

Dynamic pricing for award redemptions means award costs vary by route, demand, and seasonality — the same route can be 40,000 miles or 135,000 miles in some cases. With dynamic pricing, premium awards often become dramatically more expensive during periods of high demand.

Similarly, an award redemption that once looked expensive may now be competitive, while an award that once represented a “sweet spot” may no longer be worth the points.

The best approach is to stop relying exclusively on historical award prices and compare the current points requirements with cash fares. It is also a good idea to be flexible with your travel plans (within reason), as a flight a day earlier could mean saving 20,000 miles.

When possible, it is also a good idea to check alternative loyalty programs before transferring points.

4. Am I Hoarding Too Many Points for the “Perfect” Redemption?

Many points travelers, including experts, understand that premium cabin redemptions often deliver tremendous value. Maybe it’s a 75,000-mile business class seat that would otherwise cost $4,000, or a night at a luxury hotel that would otherwise cost $650.

Once you have seen those kinds of redemptions, ordinary awards can begin to feel disappointing. This understanding drives many to keep accumulating points indefinitely and only use them for the “best of the best” redemptions.

However, that is not always a good idea. Waiting for the perfect premium cabin or luxury hotel can backfire, largely due to devaluations. Loyalty program and award redemption rate devaluations happen all the time.

Loyalty programs can increase award redemption rates, change award charts, or otherwise reduce the value of points, often without notice. A large balance of points and miles does not guarantee the same purchasing power tomorrow.

I also tend to hoard my points, although I have been actively working on changing that mindset. I began to question whether that “once-in-a-lifetime” redemption is really worth it compared with several more feasible, yet still valuable, redemptions.

Earlier this year, I redeemed 1 million Capital One Miles for some incredible travel, nearly emptying out my entire balance. Fortunately, I have earned many more Capital One Miles since then.

The best approach is to have a redemption plan rather than treating points as a long-term savings account. Additionally, only transfer credit card points when you have a specific use, because that can reduce exposure to a single airline or hotel program’s devaluation.

5. Have I Underestimated the Costs Beyond the Points?

An award redemption can look terrific based on its mileage price alone, but there are often other things to consider. When you factor in additional fees, like taxes, carrier-imposed surcharges, and cancellation policies, an award can look much less attractive.

A 75,000-mile business class award redemption is not necessarily just 75,000 miles — you might pay $80 in taxes and fees and $155 in carrier-imposed surcharges. On top of that you may have additional expenses like positioning flights, ground transportation, or additional fees for things like baggage or cancellation penalties.

Recently, I was planning to redeem 75,000 miles for a business class award. However, that redemption also included an $800 cash component, consisting of taxes and fees. While the mileage requirement was excellent, I opted not to book this specific award due to the very high additional charges.

In many cases, two awards may require the same number of points but have dramatically different cash costs. An award redemption that costs 15,000 fewer points or miles may not be as appealing if the taxes and fees are $400 higher.

The best approach is to evaluate an entire redemption cost — points, taxes, fees, surcharges, and whatever else — before making a decision. I now ask myself if the full cost still makes the redemption worthwhile.

6. Am I Refusing To Pay Cash Because “I Have Points?”

Lastly, one of the most common mistakes even experienced collectors make is an ironic one — refusing to pay cash for things just because you have points and miles. After spending years accumulating points, it can be psychologically difficult to spend cash when you have miles that can save you even a little bit.

Say you have 400,000 airline miles that you worked hard to earn over the years, whether by flying, using an airline credit card, or earning credit card welcome offers — why would you possibly pay $380 for a flight?

Well, because sometimes the $380 flight is exactly what you should book. This is because of the opportunity cost of those miles. If a domestic flight costs $140 in cash or 15,000 miles, redeeming miles may make complete sense.

However, if the same flight instead costs 24,000 miles, it may no longer make sense, because you need to consider what those miles could otherwise be used for. Those same miles could be used toward a 75,000-mile business class award, which would normally cost upwards of $2,000.

Using points or miles for a relatively inexpensive ticket can mean giving up that future opportunity. The best approach is to have an idea of what each individual point or mile is worth to you. This way, you can redeem them for a value you feel comfortable with.

Bottom Line:

If you have millions of points and miles and don’t care about getting the most from each of them, using them freely can make perfect sense. The important thing is to match the award redemption to your travel goals and your ability to replenish the currency.

Final Thoughts

The points and miles hobby has become ever more sophisticated. There are more transferable points currencies, more airline partners, more award search tools, and more ways to optimize every point and mile than ever before. However, more options do not necessarily mean better decisions.

Even as experienced points and miles collectors, we often make mistakes, whether by overlooking certain things or failing to look at the whole picture. It is extremely important to ask yourself whether an award redemption is truly worth its cost.