NEW YORK, July 23, 2021 (Newswire.com) - Travel rewards are great for earning free hotel stays, discounted flights, and other perks to make your trips easier. Since credit cards give rewards in the form of points and miles, but it can be tough to figure out how much they're actually worth.
It's important to understand the true value of your travel rewards so you know how to best redeem them and use your credit card to maximize those benefits. According to an April 2019 survey by U.S. News & World Report, 49% of people who use a travel credit card redeemed at least $1,051 in a year. Yet 31% didn't do any research to try and save money on their travels.
That's why we're outlining how much travel rewards points and miles are worth, and how you can derive the most value from them.
How much are points worth?
Travel rewards points from best travel credit cards are worth on average roughly 1 cent each. This valuation is different for each credit card issuer, however. According to 2021 data from The Balance, the highest value per point on the market is 1.44 cents and the lowest value is 1.02 cents. So 50,000 points can either be worth $720 or $510, respectively.
The value of travel rewards points can also differ depending on how they're redeemed. Each hotel, for instance, can value points on its own scale. As The Balance found, the highest value per point among hotels is 1.88 cents and the lowest is 0.42 cents. So 50,000 points can either be worth $940 or $210, respectively.
It's important to consider transfer rates between programs, too. That's because some airlines and hotels may accept points at a higher or lower rate than they're issued by your credit card company. Say you start off with 1,250 points, but you want to redeem them through an airline's loyalty program, which has a 1.25:1 transfer rate. After the transfer, you'd be left with only 1,000 points to work with.
How much are miles worth?
Miles are commonly used to buy flights and bonus perks through airlines, though they can also be redeemed through hotel loyalty programs. Similar to points, miles are often valued at around 1 cent each. However, their value can vary based on many factors, including the type of rewards card, airline, flight, seat class, and day and time of travel. For example, international flights were found to have a higher mile value than domestic U.S. flights, along with first-class seats and weekday bookings.
According to The Balance, the highest value per point among domestic airlines is 2.04 cents and the lowest value is 0.62 cents. So 50,000 points can either be worth $1,020 or $310, respectively.
How can you get the most value from your travel rewards?
The true value of your points and miles will depend on your card issuer and redemption options. Yet there are tips you can use to try and garner the most value from your travel rewards, including:
- Save your points for international travel
- Book first class with miles when possible
- Avoid high-volume weekend flights
- Check rewards transfer rates between programs
It's also important to practice good financial habits, such as paying your monthly balance on time and budgeting for any annual fees. This way, you can be sure to keep your account active and make the most of your rewards credit card.
Source: iQuanti, Inc.