5 common purchases you should never redeem miles for
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Did you know you could redeem airline miles for a countertop banana holder? Or a toaster. Or if you’re feeling really crazy, maybe even a newspaper subscription or an aroma diffuser.
But as tempting as it may be to trade away your airline miles for, say, a new iPad instead of that now three-time canceled flight to Hawaii, you really shouldn’t. As the months mostly at home drag on, we fully understand the temptation to cash in your miles for something, anything.
While there are times it can make sense to redeem miles for something other than a flight, especially if cash is tight, there are also times that’s a bad choice. Here are five things you should never, ever, ever redeem your miles for.
Here are five things you should never redeem miles for.
For more TPG news, deals and points and miles tips delivered each morning to your inbox, subscribe to our daily newsletter.
Cash and points redemptions
Cost or per mile return: Less than 1 cent per point
More often than not, it’s a bad idea to book a combo and miles and cash redemption. This lets you offset a portion of the cash cost of airfare with your miles, generally at a set cent per point value. JetBlue recently rolled out its own points and cash option and we found that it only offers a mere 0.81 cents per point in value on most flights.
Delta has a similar program that also, more often than not, offers lower value than other redemptions. In the case of this Chicago-O’Hare (ORD) to New York (LGA) flight, you actually lose money when you use cash and miles. A flight in Main Cabin costs $83.10 outright or 1,500 SkyMiles and $95.60. There’s often no upside to this cash and miles combo, so we highly recommend staying away from most of these hybrid redemptions — or at least really do the math.
You’re often better off either going with a full mileage redemption or a pure cash booking — and that’s true with hotel points, too.
Cost or per mile return: 1 cent per point or — usually — less
As tempting as it may be to use your miles for a brand new iPad, blender or suitcase, we don’t usually recommend it.
You’ll often get very poor value when redeeming your miles for merchandise. For example, a base model MacBook Air costs $999 at the Apple Store or 333,000 miles through United MileagePlus. You’re getting 0.3 cents per mile in value from your United miles. This is a full 1 cent less than TPG’s 1.3 cent valuation of United miles.
Sometimes the valuation isn’t that bad, but consider whether you were truly going to pay full price for the gadget or gizmo you can cash in your miles for.
The same goes for transferable points.
Sure, you can use your Chase Ultimate Rewards points to pay for Apple products and to cover Amazon purchases, but it’s rarely a good deal. You’ll only get 1 cent per point toward Apple purchases and less than 1 cent per point on Amazon. These are both well under our valuation of 2.0 cents per point for Ultimate Rewards points and less than the 1.5 cents can redeem the points for grocery, dining and home improvement purchases (at least until April 30, 2021).
Cost or per mile return: 1 cent per point or — sometimes — less
Redeeming miles and points for gift cards isn’t always a terrible idea, especially if you are in a pinch, but it’s generally not a good way to spend your miles.
With American Express Membership Rewards, for example, you often get less than 1 cent per point when you cash in for gift cards. That’s pretty terrible for transferable points that TPG values at 2 cents each.
Over at the Delta SkyMiles Marketplace, you can cash in your SkyMiles for Delta Air Lines gift cards, but you really shouldn’t in most cases.
A $100 Delta physical gift card currently costs 11,700 miles, which gets you a return of under 1 cent per mile. If you have a Delta credit card like the Delta SkyMiles® Gold American Express Card, you can redeem your SkyMiles for Delta flights at a fixed-cash value of 1 cent per mile in 5,000-mile/$50 increments. Of course, the best time to redeem SkyMiles for flights is when you can do even better than that. (And very occasionally, we’ve even seen a way to use Delta miles at a fixed rate of 2 cents per mile toward vacation packages.)
If you are set on cashing out miles or points for gift cards, at least try to find uses where your return is no worse than 1 cent per mile.
Economy awards with big fees or fuel surcharges
Cost or per mile return: Varies
Sometimes it’s worth it to pay a cash co-pay or fee to fly in some of the best cabins in the sky. But that hop from Atlanta to Ft. Lauderdale or even an economy flight from the U.S. to Europe is really not the time when it’s worth it to pay a big cash fee on top of your miles.
For example, Virgin Atlantic may only charge 20,000 in miles for a round-trip award to London but passes on close to $500 in taxes and fees for that flight. It may cost not much more cash to outright purchase a mileage-earning economy flight to London and back.
Spirit Airlines has recently really improved its Free Spirit program. However, if you’re booking an award for travel in the next 28 days, there’s a $50 booking fee in addition to the mileage price if you don’t have Spirit elite status or a cobranded credit card. There are many times when tacking on a $50 booking fee for a Spirit award would make the award cost more than purchasing the ticket with cash.
Inexpensive cash fares
Cost or per mile return: Varies
Especially if you’re booking travel now, there are some excellent cash fares to be found. So, it’s always worth checking what the cash fare would be before using your airline miles to book an award. For example, transcontinental round-trip flights can regularly be found for under $150. And, if you sign-up for a service like Scott’s Cheap Flights, it won’t take long until you see an inexpensive fare you’re ready to book.
Of course, there are other reasons to use airline miles to book travel. For example, now that American Airlines has dropped award cancellation and redeposit fees for all AAdvantage members, there’s value to be found in redeeming American Airlines miles if you aren’t sure whether you’ll end up taking the flights. After all, it’s easy to cancel American Airlines award tickets if you decide not to take the trip.
Ultimately, how you redeem miles is personal and you should do what works for you. If replacing your washing machine is out of the budget but you have a ton of points you’re not using, then by all means, go for it. However, using miles for anything other than travel results in a poor return for your miles. With travel becoming safer as the COVID-19 vaccine rolls out, you may not have to wait long to redeem them anyway. It’s certainly worth the wait.
Featured photo by fizkes/Shutterstock
Welcome to The Points Guy!
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases.
- 2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.