Rewards Theory: Using Miles and Points
I booked a business class flight to Japan from NYC for 42k miles. The cash price of the seat was $15,000. I’ve done this more than once… I tell you how here. BUT it wouldn’t have been possible if I didn’t know how redeeming with miles differed from using points….
Booking with miles is not the same as using points!!
For the most simple/basic use cases, they essentially accomplish/serve the same purpose.
Redeeming Points:
Booking through a third party - generally via a bank's credit card reward program, using their specific branded reward currency. Note, this is NOT an award ticket.
Example: I book a United flight through Chase’s Ultimate Rewards travel portal using my Chase points.
CAN be transferred to partner airline and hotel programs
Redeeming Miles:
Booking directly through an airline or hotel either using airline-specific miles or hotel-specific points. This is called AWARD TRAVEL. Any ticket booked with miles/hotel points is an award ticket.
Example: An award ticket is issued when booking a seat on United using United Miles.
Can NOT be transferred, only redeemed with the designate award program.
Ok? Wait, so why does this even matter? I know a point isn’t a mile, I read the points vs miles article!
Imagine you have $100 in your checking account and $100 in Amazon Credit to use for purchases. If I asked how much spending money do you have, what would you say? The answer isn’t straightforward forward, is it? You have $200 of spending power on Amazon, but only $100 to use outside of Amazon. If I tried to trade you my $100 Amazon credit for your $100 in cash, you’d probably say no, because they don’t hold equal value.
Consider the below scenario:
You want to buy new AirPods for your upcoming trip to Japan, they cost $100 on Apple’s website, but only $70 on Amazon. You’d probably use your Amazon credit to take advantage of the lower price, right? If the items cost the same, you’d want to compare what other purchases you need to make before deciding on how to utilize your checking account funds and Amazon credit together.
The same logic can be applied to redeeming points and miles to book travel! More often than not, the cost of a seat/ticket is going to differ depending on how/where you purchase. It’s highly relevant to know that miles are always redeemed for award tickets. Airlines reserve a specific allotment of seats for miles redemption, these are award tickets. The miles redemption rate on award tickets is not always tied to the cash value of the seat. This is why there can often be a noticeable discrepancy between the cost in miles vs points for a similar flight ticket.
This is American Airlines Flight shown on American Express’ travel portal. 33,390 points!!
This is the same flight as above, but on American Airline’s travel portal. 9,500 miles!!
Look at the difference here.. Same exact flight.. Amex Travel portal is 33k points, while directly with American is only 9.5k miles!
Remember credit card points can 1) be redeemed through their specific travel portal OR 2) be transferred to a partner airline/hotel award program. This generally makes points MORE valuable than miles.
This leads us to three easy commandments to remember before booking your travel. We’re using flights for reference, but the rules apply to hotels too 🙂 Ok! Say them with me…
Before I book anything, I will always…
I. Check the cash price of the seat
II. Check the miles redemption for the seat
III. Check the points redemption for the seat
