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What with credit card sign-up bonuses, promotions, buy miles promotions, and more, there are a lot of ways to build up your points wealth, but knowing when to use your points and miles definitely takes some skill!

One of my best friends sent me a text over the weekend asking: Does it makes sense to use 25,000 American Airlines miles for a $600 flight?

As we know, there is no real exact calculation here as there are a lot of different factors to take into consideration, including your personal finances at the time, whether you can write it off as a business expense, and so on. There is also the question of whether you’re gunning for elite status, because if you are, they maybe you should pay for the flight to get the elite miles.

In general, the one main rule of thumb is to feel good about your redemption. I think her question was valid, and it was a really good redemption as she was getting a decent value for her miles at about 2.4 cents each. So I would say to go for it if it’s going to help you with your budget, and if you feel happy about your decision, then go ahead and redeem.

Using miles? Spending dollars? Just remember to make good choices!
Using miles? Spending dollars? Just remember to make good choices!

That being said, if you’re strictly earning miles and points from your credit card and you’re getting less than 2 cents per mile in value on your spending, you should really think about getting a cash-back card, like the Fidelity Cash Back Card or a card like the Barclaycard Arrival, which gives you 2.2% back on your spend when you redeem for travel because you get 2 miles per dollar and each miles is worth 1 cent towards travel. Then you get a 10% mileage refund on travel redemptions. So if you’re not doing better than that with your redemptions, you may not want to mess with regular frequent flyer miles, because, you also don’t earn miles on mileage redemptions. With the Barclaycard Arrival and that 2.2% back, you’re also earning miles and elite miles on top of it, and that makes your value back higher, which is great.

The Barclaycard Arrival is not great, however, if you’re trying to redeem for international first or business class. That’s because the tickets are very expensive and the redemption of Arrival miles or with the Fidelity Cash Back Card are pegged to the price of the ticket. So, if you know how to work traditional frequent flier programs, they may in the end be a better fit for you.

In the end, there is no right answer here, but do what makes you happy!

Have other questions? Let me know by messaging me on Facebook, tweeting me or emailing me at info@thepointsguy.com.

Chase Sapphire Preferred® Card

Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.

Apply Now
More Things to Know
  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR on Purchases
N/A
Regular APR
16.49% - 23.49% Variable
Annual Fee
Introductory Annual Fee of $0 the first year, then $95
Balance Transfer Fee
5.00%
Recommended Credit
Excellent Credit

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.