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How to decide when to use cash or miles for buying airline tickets
Summer Hull has been covering (and using) travel tips, rewards credit cards and loyalty programs for over a decade. She has flown close to a million miles, often on points and miles and with her family in tow.
Kyle Olsen is the former points and miles reporter at TPG. He specializes in maximizing points and miles, elite status and credit cards so readers travel more comfortably and at a lower cost.
also contributed to this story
November 3, 2023 • 9 min read
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Quick summary
Deciding between using miles or cash for flights depends on factors like award availability, ticket prices and personal budget.
Dynamic award pricing and fluctuating cash fares mean the best choice can vary by route and timing.
Calculating the value per mile, using tools or simple math, helps determine if redeeming miles is worthwhile compared to paying cash.
Other considerations include elite status goals, companion tickets and the flexibility of award versus cash bookings.
What to consider
Award seat availability and dynamic pricing can limit redemption options or affect value.
Elite status qualification may influence the decision, as paid tickets often count toward status while award tickets may not.
Taxes and fees on award bookings should be factored into calculations, though these are usually minor for domestic flights.
What you'll miss from the article
A step-by-step guide to calculating cents per mile and nuanced scenarios for choosing between miles, cash or fixed-value points.
Generated by AI with support from our editorial team.
Update: Some offers mentioned below are no longer available. View the current offers here.
Savvy travelers earn airline miles, allowing them to afford flights that would otherwise be out of their budget. These miles can be redeemed for more comfortable seating or spur-of-the-moment trips, be it for leisure or obligation. However, not all flights are eligible for advantageous redemptions, forcing us to weigh our options and choose between using points or cash to pay for them.
When cash prices are disproportionately high or low, deciding whether to use miles or cash becomes relatively straightforward. However, there are instances where this choice is more challenging. In such cases, we take several factors into account when deciding whether to pay with our favorite travel credit card, airline miles or credit card points when booking flights.
Check award availability and prices
MSTUDIOIMAGES/GETTY IMAGES
If you want to use miles, it's important to ensure there are enough award seats available at a reasonable cost. Before getting caught up in the decision between using miles or cash, make sure to check if there is award availability for your desired travel dates and destinations.
Being flexible with travel dates increases the likelihood of finding discounted award seats. However, as airlines adopt dynamic award pricing, the concept of "saver awards" may become less common. Instead, you will need to check the prices for award seats since they can vary daily.
Additionally, it's worth checking the cash price for the flight. Google Flights is a convenient tool for quickly comparing airfare prices over a period of time. Remember that while Southwest flights are visible on Google Flights, their prices will not be displayed.
Expensive business-class tickets can be a great way to maximize your points and miles. KYLE OLSEN/THE POINTS GUY
After obtaining the flight prices in both cash and miles, it's essential to assess your current reality. Consider whether spending cash aligns with your budget at the moment. Do you have sufficient miles to cover the cost of the flights?
If your cash budget is limited, using miles may be the more favorable option. Conversely, if you have a shortage of miles or are saving them for a significant redemption, cash might be the better choice.
Sometimes, even if the mileage redemption appears less valuable, it can still be the right decision if you lack the necessary funds to purchase the ticket. In such cases, using miles is perfectly acceptable.
Calculate the cents per mile
ZACH GRIFF/THE POINTS GUY
Once you know the ticket prices in dollars and miles, you need to do some calculations. In the points and miles world, people have a minimum value they want to get for their airline miles. TPG provides monthly valuations to give you an idea of what you should aim for.
Different miles have different values. For example, a United Airlines mile might be worth 1.35 cents, while an Alaska Airlines mile is worth 1.6 cents. You can use TPG's awards versus cash calculator, or you can do your own math.
Let's say you want to book a domestic round-trip airline ticket for 25,000 miles, and the selling price is $500. In this case, you're getting about 2 cents per mile in value ($500 divided by 25,000 miles), which is a good deal.
However, if the same ticket costs $250 with 25,000 miles, your return is only 1 cent per mile. In this situation, it might be better to buy the ticket, save the miles and earn redeemable and elite-qualifying metrics on the trip.
To determine specific valuations, consider the taxes and fees associated with the awards. Know, though, that this is usually less significant for domestic trips.
While TPG provides point valuations, it's helpful to decide on your own values. One way to estimate the value of your miles is to consider how much that 25,000-mile domestic round-trip economy ticket would cost in cash. Is it around $500? $150? $350? If it's around $350, you might value your miles at 1.4 cents each. This calculation becomes more complex for international or premium cabin travel, as the cash value of such tickets is often much higher.
If you're working with airline points in a fixed-value program like the ones for Southwest Airlines and JetBlue, the decision becomes easier. The points already have a relatively fixed value within those programs, so you should use them most of the time unless you're aiming for elite status.
Elite status can give you priority even when you're traveling in economy class. KYLE OLSEN/THE POINTS GUY
If your goal is to achieve airline elite status through a specific number of paid miles flown each year, this consideration becomes important. The decision between paid tickets and using miles should be closely weighed based on the cost per mile, but if maintaining elite status is crucial, it might lean toward purchasing a ticket.
Occasionally, I purchase my airline tickets with cash while utilizing miles for the rest of my family, reducing the overall cost in cash. This approach, however, results in separate reservations, which can complicate matters in the event of flight delays or cancellations.
You might want to save your American Airlines miles to treat your family to ice cream sundaes in first class. KYLE OLSEN/THE POINTS GUY
Consider the potential impact on your plans and aspirations, even if using miles seems financially advantageous.
While it's possible to use cash for shorter domestic trips by opting for budget airlines like Spirit Airlines, there aren't many affordable options for extravagant international business- or first-class flights except for using miles.
If you have set your sights on a significant redemption, it may be wise to stay committed to that goal instead of deviating with smaller redemptions, which could hinder your progress.
Alaska Airlines has one of the most popular companion tickets. KYLE OLSEN/THE POINTS GUY
When deciding how to pay for a specific trip, it's important to consider if you have access to a companion ticket. For instance, as a cardholder of the Alaska Airlines Visa Signature® credit card, you can bring someone along for a little over $100, even to popular destinations like Hawaii.
When you can’t decide whether to spend miles or cash, the right answer might be option C: none of the above.
Many credit cards award fixed-value points that you can use to book your airfare. This allows you to take advantage of good prices while keeping your money safely in your wallet. Plus, you’ll still earn progress toward elite status, and you won’t be tied to award availability restrictions.
For example, you can book a paid fare with your Capital One Venture X Rewards Credit Card or Capital One Venture Rewards Credit Card and then use your miles to pay for all or part of that statement charge at a value of 1 cent per mile. If you’ve found a great deal on a cash ticket, you can still grab it without burning cash.
A final thought: Flexibility
Consider which path gives you the most flexibility. KYLE OLSEN/THE POINTS GUY
Something else to consider when deciding whether to use miles or cash is whether using miles might provide more flexibility. Perhaps you have elite status that allows you to change award reservations without penalty. Or, maybe you can book via a program that doesn’t charge big fees for award flight changes or cancellations.
For example, suppose you book an American Airlines-operated award flight by redeeming Alaska Airlines miles, and you need to cancel. In that case, you can do so for free if you do it at least the day before your scheduled departure. Just know that you might spend more miles if your new fare exceeds the old one.
If you book via Southwest Rapid Rewards and your plans change (or the price drops), you can refund or modify your award reservation without fees or penalties. Even cash reservations via Southwest can be modified without fees. If your new flight costs less and your ticket is refundable, the airline will refund the difference to your original form of payment. If your ticket isn’t refundable, you won’t lose your money. The carrier will give you a voucher for the fare difference, which you can use to book future Southwest flights.
Bottom line
There isn’t always a perfect answer on whether to use miles or cash for a given ticket, but these are some things my family looks at when making that decision.
Considering these aspects when booking your next ticket, you can make the right choice for you and your family.
Updated as of 4/18/2024.
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By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
