Ultimately, the goal of collecting points and miles is to redeem them for rewards. Whether you are seeking aspirational travel or a quick weekend getaway, getting the value out of your miles and points means figuring out how to redeem them.
The first time you redeem your points, the process can be overwhelming. You might be wondering where to start. You might see that you have several options for redeeming your points. You might have the option to transfer your points to another program.
At the end of the day, you want to make sure that you are getting a reasonable value for your miles and points.
Making sense of mile and point redemptions requires an understanding of the different types of miles and points, how airlines and hotels price awards and how to actually redeem your points. We’ll cover each of these items in this guide.
The Types of Points and Miles
Perhaps the most foundational thing to understand when using miles and points is what type of points you are working with. Some points have a fixed cash value, some have a value that can vary widely and some can even be transferred to other programs.
Fixed value points have an explicit, published dollar value for redemptions. Many smaller banks opt for fixed-value points programs due to their simplicity.
Even in fixed-value points currencies, the value you get for your points can vary by redemption type. For example, points might be worth 1.5 cents each when redeemed for travel rewards, but only be worth 1 cent each when redeemed for cash back.
The biggest advantage of a fixed value points currency is that you can almost always use your points for an award that you would otherwise use cash to purchase. Because points are worth a fixed amount, the points programs do not need to worry about restricting capacity and you do not need to worry about redeeming your points for less than their possible value.
Most airline and hotel programs fall into the category of variable rewards, where there is not a strict dollar value attached to points. Sometimes the value of these miles and points can vary widely; sometimes it is fairly tightly coupled to the dollar price of redemptions.
Programs with variable value offer both the most opportunity to get outsized value from your points and the greatest access to aspirational travel and experience redemptions. On the other hand, they can be among the most challenging to redeem on demand.
Points currencies such as American Express Membership Rewards, Chase Ultimate Rewards and Citi ThankYou points are generally thought of as transferable points currencies because of the ability to transfer these points to other points programs.
Understanding Award Pricing
When using miles and points for travel-related bookings, you’ll quickly run into the myriad ways that airlines, hotels and travel companies price their awards. Award charts, dynamic pricing, hotel categories and peak/off-peak awards can be confusing at first, but these award pricing mechanisms are relatively simple to understand.
Generally, the way miles and point redemptions are priced falls into one of the following categories.
Airline Award Charts
Historically, airlines have priced most of their frequent flyer awards using award charts. An award chart usually contains a matrix of regions (e.g Europe, North America, Southeast Asia) with a defined, fixed price for flights between each region.
For a good example of what a traditional award chart looks like, check out the Lufthansa Miles and More Star Alliance award chart. Airlines that still use a traditional award chart hold the greatest possibilities for huge value from mileage redemptions, but availability restrictions frequently make those redemptions difficult to find.
Increasingly, airlines are eliminating traditional award charts for most flights and using dynamic award pricing. Dynamic award pricing allows award prices to change based on demand, capacity and promotion.
If an airline is using dynamic pricing, the price of a given flight in miles will generally correlate with the price of the same flight in dollars. While dynamic pricing makes it more difficult to get outsized value for your miles, it often enables travelers to redeem for more flights, albeit at a higher price.
Pricing By Hotel Category
Most large hotel chains have brands that range from budget hotels to all-inclusive luxury resorts. Many of these chains use category pricing in their loyalty programs to account for the differences in price across brands, locations and seasons.
Marriott, for example, has eight categories of hotels, which range from 7,500 points per night for the standard rate at a category 1 hotel to 85,000 points per night at a category 8 hotel. Hotel categories do not change from season to season and are roughly related to the average room price over the course of a year. Within hotel programs using category pricing, the most valuable redemptions are often at hotels that have large swings in price between peak and off-peak seasons.
Peak and Off-Peak Awards
I’ve alluded to variable pricing based on seasonality several times. Whether they are using dynamic pricing or an award chart, most travel providers will vary their pricing based on peak travel seasons. Both airlines and hotels offer peak/off-peak pricing.
Flights to Europe from the U.S. are typically much more desirable during the peak summer travel season than during winter in the northern hemisphere, so it makes sense that you would pay less for that winter flight to Berlin than you would for Bastille Day in Marseille. American Airlines offers MilesSAAver Off-Peak awards for travel on certain dates to many locations.
Hyatt and Marriott are among the hotel chains that vary their award prices based on peak travel dates. If you’re traveling to South Africa in July, you might be able to score an off-peak award night at the Westin Cape Town during your stay. Within hotel programs, what exactly defines peak or off-peak is often determined by the individual property.
While some airlines and hotels will publish its criteria for what determines what dates are peak and off-peak, most do not have published guidelines. To make things even more complicated, peak/off-peak dates vary not only by market but often by individual hotels in the same market. If an off-peak award is available, you will see it when you search for award stays.
Hybrid (Cash + Points) Awards
Most popular with hotels, many travel providers offer the ability to redeem some combination points and cash for a travel award.
Hyatt, for example, offers the ability to redeem points for a 50% to 75% discount off the standard rate for a given room. These awards can be particularly useful if you either do not have enough points to book your entire stay or are booking during times when award nights are not otherwise available.
Hybrid awards are not exclusive to hotels, some airlines offer the ability to use both cash and points for an award. Delta offers their cardholders the option to pay for part of your flight with miles at a fixed value per mile. Some credit card points programs also allow you to pay for part of a travel booking with points.
How to Redeem Points
Now that you have a good feel for the types of miles and points programs available and how airlines, hotels and travel providers price awards, how do you actually go about booking an award with your points?
As with many aspects of miles and points programs, this varies by program and award. Usually, the easiest way to redeem points for an award is through the points program website. For complicated awards, some redemptions or for awards in certain programs you will need to call a call center.
The website of whichever miles or points program you are using will be your first stop for redeeming most awards, whether you’re looking to redeem points in a bank’s transferable points program or an airline or hotel program.
Usually, a transferable program will outline the types of redemptions that are available to you, display redemption promotions, give you the ability to transfer your points when applicable and link to third-party websites where you can redeem your miles and points.
In the case of hotel and airline programs, booking a travel award will often follow the same process as booking a flight or hotel using cash. Usually, you can elect to see prices in cash or points when searching for flights or hotels.
Miles and points programs will use third-party portals for redemptions that are outside of their core product offerings. You will almost always access these portals via a link on the program website.
Airlines will often use third-party portals for gift card redemptions, magazine subscriptions and merchandise redemptions. Delta and Alaska MileagePlan miles can both be redeemed for magazine subscriptions through third-party MagsForMiles. Marriott uses a third-party to manage its gift card redemptions. Banks will frequently use a third-party travel agency portal to book travel awards.
Historically you went first to the call center, but airlines have dramatically improved their websites in recent years, reducing the need to call in.
Today, most airlines and hotels offer the ability to book most award availability online. While some complicated travel redemptions or booking flights on certain partner airlines will require a call, the vast majority of travel award redemptions can now be done online for most airlines.
Airline and hotel programs aren’t the only programs that occasionally require you to call in to redeem your points. While most rewards available from Citibank’s ThankYou Points program can be redeemed on thankyou.com, some rewards, like student loan rebates, require processing through their call center.
Using a Service
For complicated air travel itineraries booked with miles, there is a cottage industry of small companies that will search for award availability and book award travel for you, for a fee. These are third-party companies with staff who specialize in redeeming complicated travel awards. If you are looking to redeem your miles for a complicated itinerary that is not easily bookable on an airline’s website, using one of these services is an option to consider.
Check out Forbes Advisors list of the best award booking services to see which one might be the best fit for you.
Getting The Most Value From Your Points
Finally, before redeeming your points, you should consider that not every award is a good use of miles or points. While every miles and points program is different, there are a few guidelines that you can follow to ensure that you are getting a reasonable value in your redemptions.
Transferable points currencies will generally be the most valuable when you make use of the available transfer partners. Most people collecting Chase Ultimate Rewards, American Express Membership Rewards or Citi ThankYou points will find the most value in those points from transferring them to an airline partner. (Chase and Citi ThankYou points require you to hold one of their premium credit cards to transfer points.) Though, there are exceptions. I have found great value in Chase’s travel portal, especially on tours that you normally can’t buy with points.
Airline, hotel and car rental points will generally offer the most value on redemptions with that brand. You will get the most value out of airline miles when you book flights on that airline and its alliance partners. Even when airline or hotel points offer the option to transfer points to other programs, this is generally a poor value. Marriott Bonvoy may be the one major exception to this rule as they do offer transfers to airline partners at reasonable rates, however, redeeming Marriott points for stays at Marriott properties can also offer great value.
The world of miles and points can be confusing, but spending time to understand the programs, redemption options and pricing schemes can ensure that you get the most value out of your points. The goal of this guide is to give you a framework to understand the structure of how miles and points redemptions work and has made you ready to start using your miles and points for rewards.