Do Airline Miles and Hotel Points Count as Travel Purchases?

Update: Some offers mentioned below are no longer available. View the current offers here.

TPG reader Mike sent me a message on Facebook to ask about redeeming Capital One Venture miles:

"The Southwest flight I'm interested in currently costs 23,000 Venture miles or 12,000 Rapid Rewards points (which I don't have). Can I use my Venture miles to buy Rapid Rewards points and redeem for the lower amount?"

One of the main benefits of the Capital One Venture Rewards Credit Card is that it offers flexible rewards: You can use your card to pay for travel purchases normally, and later redeem miles for a statement credit to wipe those charges away. However, some purchases that might seem travel-related aren't actually categorized as travel, including purchases of points and miles from many loyalty programs.

Credit card issuers use merchant category codes to determine whether you earn bonus points for a purchase or in this case, whether you can redeem rewards to pay for it. Most merchants are categorized sensibly — if you buy a ticket from a major airline, it will almost certainly be recognized as a travel purchase. However, airlines and hotels (including Southwest) often sell their rewards through a third-party vendor like Points.com, which uses a different merchant category code. That means a purchase of Rapid Rewards points won't be categorized as travel, so you can't redeem Venture miles to pay for them.

In my experience, American Airlines AAdvantage miles, Delta SkyMiles and Hilton HHonors points are categorized as travel purchases. However, your mileage may vary depending on which card (or credit card network) you use. You may have different results with the Venture Rewards card than you would with the Barclaycard Arrival Plus World Elite Mastercard. If you're thinking of buying rewards and want to maximize your return, consider making a small test purchase first to see how it shows up on your statement.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

There's another question to consider here, which is whether you should buy those points or miles to begin with. At the regular price, 12,000 Rapid Rewards points would cost you $330 (or 33,000 Venture miles if you could redeem them) — that's more than 40% more than what you would pay if you were buying the ticket outright. You can often find promotions to buy points and miles at a discount, but even then the math likely won't work out in your favor.

This is one of the reasons I recommend earning transferable points. Flexible rewards like Venture miles and Arrival miles are useful as part of a diverse loyalty portfolio, but I prefer to redeem them for expenses that aren't covered by other rewards, like trains, taxis and the occasional Airbnb. In Mike's situation, I might rather transfer Ultimate Rewards points to Southwest, but I think redeeming 23,000 Venture miles to cover the paid flight is a perfectly good deal. You'll get one cent apiece from your Venture miles whether you redeem them now or later, so you may as well keep the cash in your pocket.

For more on Venture Rewards and bonus categories, check out these posts:

• Despite Claims, Capital One's Cards Aren't the Best for Award Travel
• Is the Capital One Venture Rewards Card Worth Getting?
• How Can I Tell if a Purchase Is Categorized as Travel?

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.