The 6 Worst Ways to Redeem Travel Points

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Travel rewards credit cards simplify the accumulation of various rewards including airline miles, hotel points, and adaptable travel credits. The valuation of these points can fluctuate based on how they are utilized; for high-value redemptions, it’s possible to attain 2 cents per mile or point.

However, not all rewards yield favorable returns, with some leading to redemption options that offer below half a cent per point or mile. This doesn’t inherently imply that these choices are incorrect, but it highlights the fact that they often leave users underwhelmed financially, especially in comparison to availing better alternatives.

For those holding a travel credit card, hotel rewards card, or a flexible travel points card, it’s crucial to be mindful of which redemption avenues to steer clear of.

1. Purchasing Merchandise

Many loyalty programs allow you to exchange points for merchandise. With certain rewards platforms, for instance, you can redeem your points on sites like Amazon or offset purchases at Apple.

While this option isn’t necessarily the least desirable, trading points for gadgets, small household items, and other goods usually yields a mere cent or less per point in value.

Delta SkyMiles, for instance, features some of the most unfavorable merchandise exchanges available. A request for 141,880 miles equates to a 10.5-inch iPad Air with Wi-Fi, which retails at about $649 on Apple.com, indicating a value significantly below half a cent per point.

While the allure of obtaining free items can be strong, it can be far more beneficial to save points for higher value redemptions in the future.

2. Low-Value Transfers to Airlines

It’s a common understanding among travel rewards aficionados that transferring points to airlines can enhance the value received, but this does not apply universally. While transferring can often lead to favorable deals, not every program is equally valuable.

It’s typical to see a transfer from card issuers to their airline partners yield around 2 cents per point in redemption value thanks to a standard 1:1 exchange ratio, barring exceptional cases.

Conversely, some programs offer subpar transfer ratios. For example, the IHG Rewards program permits transfers to airline programs like Air France/Flying Blue or Alaska Airlines, but you’ll only receive 2,000 airline miles for every 10,000 hotel points made.

Conclusion: Not all points transfers offer the same benefits. At times, it may be necessary to accept a loss of points for the sake of usability, but if you’re forfeiting thousands for the transfer, it’s likely wiser to seek another travel partner where the points can be used more effectively.

3. Exchanging Airline Miles for Hotel Accommodations

If you find yourself with unutilized airline miles, converting them for hotel bookings via the airline’s booking site could seem like a sensible choice. Although utilizing miles for hotel stays beats letting them go to waste, the value gained from such transactions is generally poor.

Taking the American AAdvantage program as an illustration, you can spend miles on hotel bookings; however, the redemption value is often unsatisfactory. On searching for dates, it was found that booking a stay at the Ritz-Carlton Bal Harbour in Miami would cost 188,500 miles, while a cash booking would amount to $1,185 per night. This implies a return well below 1 cent per point, drastically lower than the potential value derived from flights.

Before rushing to exhaust your points for a trip, consider retaining them for future use when they can yield greater value. (Related: How Travel Rewards Cards Can Help You Access Luxury Travel Benefits)

4. Opting for Gift Cards

Most loyalty programs present the option to convert points into gift cards, which might seem appealing when travel is off the table. However, redeeming airline miles for gift cards typically results in receiving under one cent per mile in value, even flexible programs may only yield about 1 cent per point.

Utilizing travel rewards for gift cards should ideally be a last resort when you find yourself completely unable to travel or if your miles are nearing expiration.

5. Magazine Subscriptions

It’s advisable to refrain from trading miles for magazine subscriptions, despite certain programs like Delta SkyMiles promoting this route. Their “MagsforMiles” initiative may offer you various magazine issues in exchange for miles.

While the redemption value might not at first glance appear detrimental, this is still a poor use of airline miles overall.

6. Booking Inexpensive Flights

Lastly, remember to check the cash price of flights before committing to using miles for an award booking. It is advisable to aim for at least one cent per point in value when redeeming airline miles for flights; in fact, many experts recommend striving for close to 1.5 to 2 cents per mile.

When flight costs are particularly low, it might be more sensible to opt for cash purchases over redeeming mileage. (Also, learn: 9 Unforeseen Costs to Consider When Using Travel Rewards)

Your Takeaway

While travel rewards can be redeemed in various ways, it doesn’t necessarily mean those options should be chosen. Often, you’ll accrue greater value by redeeming travel rewards, airline miles, and hotel points in line with their intended purpose.

For those leaning towards exchanging rewards for statement credits, gift cards, or merchandise, consider the advantages of a cash back credit card that provides these standard redemption features. Your rewards belong to you, and you can redeem them as you please, but travel rewards tend to bring more value when allocated towards travel rather than material goods.

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