I should have just paid cash — reader mistake story
Update: Some offers mentioned below are no longer available. View the current offers here.
Today, I want to share a story from TPG reader Alex, who forgot an important step before booking an award flight:
My friend was in Milan for the summer and had a few days before going back to Moscow for work; I had been wanting to show her New York, and this seemed like a good opportunity to do it right away. I had about 80,000 United miles from the sign-up bonus and spending on my United Explorer Business Card, and I found an open-jaw itinerary from Italy to NYC and back to Moscow for 60,000 miles and $127 in taxes, plus a $75 close-in booking fee.
It was the end of August and I assumed airfare would be skyrocketing, so I booked the award ticket and sent it to her. To my surprise, when I checked later I found that the exact same itinerary was available for just $620. I should have bought the ticket with cash and saved my miles. Lesson learned: Before redeeming miles, you should always check the cash rate.
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
Part of maximizing your points and miles is learning when not to use them. Alex paid a reasonable rate for a round-trip, transatlantic award, but award rates don't exist in a vacuum — to determine whether an award is a good deal, you have to calculate the redemption value. Accounting for the $202 in taxes and fees, Alex's 60,000 miles only lowered the out-of-pocket cost by $418. That yields a redemption value of around 0.7 cents per mile, which is well below TPG's latest valuation of 1.3 cents apiece for United miles. The return would have been subpar even without the taxes and fees, and Alex is spot on that paying cash would have been preferable in this case.
The cash cost of your ticket isn't the only relevant variable, as the cost of other similar itineraries should factor into your decision too. If you can find a cheaper ticket with a comparable schedule and routing, use that (rather than an identical paid itinerary) as the basis for calculating the redemption value of your award. You should also account for the value of rewards earned on paid fares that aren't earned on award tickets, including elite credits as well as redeemable points and miles. Booking an award becomes less attractive when it means missing out on valuable rewards and benefits.
Related: How to decide whether to use cash or miles for airline tickets
I appreciate this story, and I hope it can help other readers avoid making the same mistake. In appreciation for sharing this experience (and for allowing us to post it online), I’m sending Alex a gift card to enjoy on future travels, and I'd like to do the same for you. Please email your own travel mistake stories to info@thepointsguy.com, and put "Reader Mistake Story" in the subject line. Tell us how things went wrong, and (where applicable) how you made them right. Offer any wisdom you gained from the experience, and explain what the rest of us can do to avoid the same pitfalls.
Feel free to also submit your best travel success stories. If your story is published in either case, I’ll send you a gift to jump-start your next adventure. Due to the volume of submissions, we can't respond to each story individually, but we'll be in touch if yours is selected. I look forward to hearing from you, and until then, I wish you a safe and mistake-free journey!
Top offers from our partners
How we chose these cards
TPG featured card
Rewards
4X | Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S. |
4X | Earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X). |
3X | Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com. |
Intro offer
Annual Fee
Recommended Credit
Why We Chose It
There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.Pros
- 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
- 3x on flights booked directly with the airline or with Amex Travel
- Welcome bonus of 60,000 points after spending $4,000 in the first six months
Cons
- Weak on travel outside of flights and everyday spending bonus categories
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber/food credits
- Few travel perks and protections
- Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
- Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
- Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
- $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
- Choose the color that suits your style. Gold or Rose Gold.
- No Foreign Transaction Fees.
- Annual Fee is $250.
- Terms Apply.
- See Rates & Fees
Rewards Rate
4X | Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S. |
4X | Earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X). |
3X | Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com. |
Intro Offer
Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.60,000 bonus pointsAnnual Fee
$250Recommended Credit
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.670-850Excellent/Good
Why We Chose It
There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.Pros
- 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
- 3x on flights booked directly with the airline or with Amex Travel
- Welcome bonus of 60,000 points after spending $4,000 in the first six months
Cons
- Weak on travel outside of flights and everyday spending bonus categories
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber/food credits
- Few travel perks and protections
- Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
- Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
- Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
- $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
- Choose the color that suits your style. Gold or Rose Gold.
- No Foreign Transaction Fees.
- Annual Fee is $250.
- Terms Apply.
- See Rates & Fees