If you’ve been banking up miles with a travel rewards credit card or frequent flyer program, it can be exciting to cash in those hard-earned points. But if you’re using your rewards as a way to save money in the long run, take a step back before you go for “free” airfare. Is redeeming your miles worth it? Here are three instances where it pays to redeem miles.
Redeem Air Miles if the Math Works Out
Depending on who you ask and what airline you’re flying, a mile is worth about 1.4 cents per mile to 2 cents per mile. This number is calculated by dividing the average dollar cost of a ticket by the average miles cost of a ticket. You can usually find out the approximated mile value of your preferred airline online.
If you’re considering redeeming miles, take a second to crunch the numbers and compare. Divide the dollar cost of the ticket you’re looking at by the cost per mile for the same ticket. If the cost per mile is above the average cost per mile (1.4 cents per mile to 2 cents per mile), you’re likely better off buying the ticket in cash and saving your miles for a better deal. Usually you can find better values on international flights rather than domestic as their dollar cost can tend to be higher.
Make sure to read the fine print for the airline you’re redeeming miles with as well as the credit card or frequent flyer program Terms and Conditions where you earned the points. There may be redemption fees or other surcharges that apply to the ticket, so you’ll want to factor those in too.
Redeem Air Miles if You Don’t Travel Often
Not a frequent flyer? If you’re not planning to be on the lookout for the best mile value, it might make sense to redeem your travel rewards sooner. You don’t want to miss out on rewards by never cashing in!
Redeem Air Miles if You Need to Travel and Can’t Afford the Ticket
Let’s be real – travel can be expensive, and sometimes it’s unavoidable. If you have to make a trip and you have the miles, don’t be shy about redeeming them. If you haven’t had time to save, purchasing an unexpected ticket can really throw off your budget and even land you in debt. Finding a great deal in the future isn’t worth putting yourself into debt now.
Whether you’re planning to pay in cash or redeem miles, managing a healthy budget starts with a good checking account. Apply for a checking account online from Santander Bank to get started.