Redeeming Credit Card Travel Points: What You Need to Know

When redeeming credit card travel points, you should always try to maximize and optimize for value. That means making sure you get enough out of your hard-earned points for their asking price. Whether you use your rewards to book travel directly, exchange them for cash back, or transfer them over to a participating airline or hotel program, you should generally try and get at least $0.01 per point. However, other factors may impact this number, and your expectations should be adjusted accordingly. This guide will walk you through everything you need to know to become an expert in using your credit card points.

Redeeming Credit Card Travel Points

The points you gather using your credit card will typically be redeemable in one of three ways—travel or merchandise, statement credit or cash back, or transfers to participating airline or hotel programs. Some cards will provide you with all three options, while others will limit you to just one. When you are limited you, obviously, have no decision to make. The rest of this guide focuses on what to do when you are presented with multiple choices.

Regardless of the way you choose to redeem your travel points, the goal should always be to maximize the value you get per travel point. There is no surefire way to do this and each program is different. The best way to extract the highest value possible is to be patient and read a lot on the topic. This way you will have a better point of comparison for what is and is not a good deal. As a general rule of thumb, you shouldn't redeem your miles in a way that earns you less than $0.01 per point. In the case of certain travel points, you can even get twice as much.

You can calculate the value of a single credit card travel point by dividing the reward value by the number of points needed. For example, if you can get $500 in travel statement credit in exchange for 50,000 points, your point value is $500 / 50,000 = $0.01.

What you can do with your travel points depends on the credit card program you're using. The big three are Chase Ultimate Rewards, American Express Membership Rewards, and Citi ThankYou. These four reward programs give cardholders the ability to use their points in the three ways we outlined above. However, the usefulness and value of your points will vary. Here is a quick table that shows you how much your points are worth by redemption method.

Point Value by Redemption Method

Travel PointsCash BackTravelTransfer
Ultimate Rewards$0.01$0.01-$0.015$0.012+
Membership Rewards$0.01$0.0075-$0.01$0.012+
ThankYou$0.005$0.01$0.0125+

Using points optimally with each of the programs above can get complicated. We recommend checking out a guide on the program you use.

Transferring Travel Points to Airline & Hotel Programs

Typically, the best value you can get out of credit card travel points comes through transfer partnerships. You should always check to see if you can exchange your credit card points for rewards with a participating airline or hotel partner. When doing this, you need to consider two factors: the exchange rate and your point value. The first one is simple. How many of your credit card points do you have to exchange to get a certain number of airline or hotel points. You should then consider how much value you're getting in return for the transfer, to see if it's worth the trade. Here are two examples:

Example A: The transfer is worth it

  • Points from Bank A are worth $0.01 when exchanged for travel statement credit. Airline A has a frequent flyer program where each mile is also worth $0.01
  • The points can be traded in for miles with Airline A at a ratio of 1:2. That means you get two Airline A miles for each of your Bank A points.
  • When you trade your Bank A Points, you're exchanging something worth $0.01 for two points worth $0.01 (2 x $0.01). Therefore, you're doubling your value.

Example B: The transfer is not worth it

  • Points from Bank B are worth $0.01 when exchanged for travel statement credit. Airline A has a frequent flyer program where each mile is also worth $0.01
  • The points from Bank B can be traded in for miles with Airline A at a ratio of 2:1. That means you get one Airline A mile for two points from Bank B.
  • When you trade your Bank B Points, you're exchanging something worth $0.02 (2 x $0.01) for something worth $0.01. Therefore, you're cutting your potential rewards in half.

Figuring out exchange ratios is the easy part, since your bank will provide you with that information. It's far trickier to know how much your new airline or hotel points are worth. You can use the table below to get a quick estimate for the average value of some of the most popular programs. If you don't find what you're looking for, we suggest turning to Google for the answer. Searching "X point value" will typically return good results. Simply substitute your airline or hotel for X.

Program

ValueType
Alaska Mileage Plan$0.019Airline
American AAdvantage$0.013 - $0.015Airline
Avianca Lifemiles$0.014Airline
British Airways Executive Club$0.015Airline
Cathay Pacific Asia Miles$0.01Airline
Delta SkyMiles$0.006 - $0.05Airline
Etihad Guest$0.013Airline
JetBlue TrueBlue$0.016Airline
Korean Air SkyPass$0.01Airline
Singapore Airlines KrisFlyer$0.015Airline
Southwest Rapid Rewards$0.017Airline
United MileagePlus$0.012 - $0.015Airline
Virgin America Elevate$0.02Airline
Virgin Atlantic Flying Club$0.01Airline
IHG$0.007Hotel
Wyndham$0.012Hotel
Marriott$0.007Hotel
Hilton$0.005Hotel
Starwood$0.024Hotel

Lastly, you should also know that whenever you transfer your miles to an airline or hotel program, you may have to contend with two new factors: blackout dates and award seat/night availability. These two things are not inherent in credit card travel rewards if you simply use them to book travel through your bank's travel portal.

Blackout Dates

Airlines and hotels will typically make award travel unavailable during certain days in the year. This is what's commonly referred to as 'blackout dates'. These typically occur during major holidays or periods of heavy travel. Blackout dates are not posted anywhere online, and some airlines claim to have completely gotten rid of them. While this is true to some extent, award seat availability—which we go over in the next section—is severely limited on certain dates throughout the year.

Award Seat Availability

Each airline allots a certain number of seats on each trip for award seat travelers. Likewise, hotels make some number of rooms available to those booking with points. Airlines and hotels will use algorithms to determine when it's most advantageous for them to release these seats and rooms to award travelers. This concept is known as award seat availability and it strongly influences how useful your travel points are once transferred. Know that award seat availability will not always be apparent from an airline or hotel website. You may need to call and speak with a travel agent to get access to all award seats. Certain airlines and hotels will be better about this than others.

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