Now that you’ve saved up thousands of miles/points for your summer vacation, do you ever stop to consider strategies for stretching them the farthest? Or do you just book the flights you want and pay whatever it costs?
A new study from personal finance website NerdWallet suggests that the value of your points/miles can vary considerably depending on whether you book economy vs. premium class, one-way or roundtrip flights, and how long your flight is.
For instance, the study found that frequent flyer points (NerdWallet refers to both points and miles as “points” for consistency) are worth significantly more for domestic travel when you book an economy seat as opposed to business or first class – unless your flight is a long one.
Points used to book domestic roundtrip flights in economy were worth 1.03 cents for travel during peak periods, or 1.08 cents for off-peak, NerdWallet found, while the corresponding values for premium seats were 0.83/0.86 cents.
“If you prefer to fly business, you might want to pay cash, or save your points for an international and/or one-way flight,” NerdWallet said.
However, the study also found a big discrepancy in point values for booking premium cabins based on flight distance. On flights of less than 1,000 miles, points had an average value of 0.72 cent, vs. 1.13 cents for flights longer than 1,000 miles – a difference 10 times larger than that for economy flights.
To determine the value of your points for a specific trip, divide the cash price by the number of points required; you’ll generally get a result somewhat higher or lower than 1 cent per point. “As a simple rule of thumb, if the value of each point is less than 1 cent, use cash and keep your points for a higher-value opportunity,” Nerdwallet said.
Chris McGinnis is Best Western’s business and travel trends expert on YouMustBeTrippin.com