Should you book travel with cash or points? A guide for 2024

This series of articles about credit cards, points and miles, and budgeting for travel is brought to you in partnership with The Points Guy.

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We all have that one travel friend (or influencer on our Instagram feed) who constantly boasts about the virtues of points and miles. While it’s true that points can help you book incredible luxury travel experiences that are unattainable for most people, they also come with caveats. Airlines and hotels are making it increasingly difficult to redeem points during busy travel periods while dropping rates in the off-peak season. This can lead to scenarios where points aren’t your best bet for booking travel, and you book your trip with cash.

Whether you should book travel with cash vs. points depends on your travel needs and budget. Using points lets you save money on travel and book high-priced luxury seats and hotels for less. But miles expire and carry a lot of restrictions, making cash a better option for some travel bookings. Cash is much more flexible since it can be used for anything without any restrictions. When deciding which option is best for you, here’s a rundown of how to choose whether to book travel with cash or points.

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Determine how much your points are worth

If you’re new to points and miles, figuring out the different points systems and their worth can be overwhelming. However, knowing how much your points are worth is a crucial first step in determining whether to book with points or cash. The value of your points depends on the loyalty program and how you redeem them. That’s a tricky question for newbies to answer, which is why The Points Guy’s point valuation guide is a great starting point. The Points Guy updates its valuations monthly based on extensive data and expert analysis.

Transferrable currencies like American Express Membership Rewards*, Capital One miles, Citi ThankYou points and Chase Ultimate Rewards are the most valuable points. Meanwhile, budget hotel programs like Best Western Rewards and Choice Privileges® offer the least value. Transferrable rewards provide more flexibility and redemption options, allowing you to convert points to cash or transfer them to dozens of popular loyalty programs. The more redemption opportunities a currency opens up (especially on the premium travel front), the more valuable those points usually are.

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Compare the cash rate against the point rate

Once you’ve determined your points' worth, you should compare the travel cash rate against the point rate before deciding which to use. An easy way to determine the redemption rate is to divide a flight or hotel’s paid rate by the required points. Then multiply that number by 100. You should consider paying cash if the resulting number is less than The Points Guy's valuation.

Suppose you’re considering a 25,000-point Hyatt hotel that costs $300 per night. Dividing $300 by 25,000 and multiplying that number by 100 gives you a 1.2 cents per point value. TPG values Hyatt points at 1.7 cents a piece, so you may be better off paying cash in this scenario. These valuations are meant to be guides and not absolute. If you’d rather save money than maximize every point, then proceed with point bookings as you see fit.

If you have transferable points (i.e., Chase Ultimate Rewards, Capital One miles), don’t forget to compare the rate when redeeming points through their travel portals. For example, Chase Sapphire Reserve® cardholders can redeem their Ultimate Rewards points through the Chase Travel℠ portal at 1.5 cents each. So if you’re looking at a United Airlines award that gets you less than 1.5 cents per mile, you should consider redeeming your Ultimate Rewards points through the Chase portal instead of transferring your points to United.

The same goes for hotel redemptions: Sometimes, it makes more sense to redeem points through travel portals than to transfer them to a loyalty program. For example, World of Hyatt is a Chase Ultimate Rewards transfer partner. Free nights at Hyatt hotels range from 3,500-137,000 points, depending on the hotel category. If a Category 1 hotel costs $52.50 or less, you’ll want to book through the Ultimate Rewards portal rather than transfer your points to Hyatt. And if a top-tier Hyatt award costs more than $2,055, you’re better off redeeming Hyatt points since the redemption value exceeds 1.5 cents per point.

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Top times to book travel with points

Booking travel with points can save you money because it allows you to use points earned from rewards programs or credit cards instead of spending cash. This is a great way to get discounts on flights, hotels and other travel expenses. Additionally, some loyalty programs offer bonus points for booking with them, which can further increase savings.

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Award sale

Both hotels and airline loyalty programs periodically offer award sales that can knock up to 50% off the regular point rate. This creates a great opportunity to book travel with fewer points than usual. If you come across a good award sale, redeeming your points rather than paying with cash can be worth it.

Award sales aren’t always advertised, so you must know where to look. Here’s a list of award sale pages that are updated regularly:

• Air France/KLM Flying Blue Promo rewards: Offers up to 50% off award redemption rates, including long-haul international flights.

• Delta SkyMiles Deals: Discounted award bookings starting from 10,000 SkyMiles round-trip.

• Marriott Point Savers: Provides up to 20% off standard award rates at select hotels.

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Wait for point transfer bonuses

Some credit card companies offer bonus points when you transfer them to airlines or hotel loyalty programs. Point transfer bonuses can make even high-priced award tickets more attainable. American Express Membership Rewards* offered a 30% transfer bonus to Virgin Atlantic Flying Club earlier this year.

Many travelers used this deal to book All Nippon Airways (ANA) tickets to Japan for less. These awards are already a bargain, starting at 60,000 points round-trip in economy class. But the transfer bonus dropped the price further to 46,200 American Express points. If you were unsure about booking a cash ticket over redeeming points, the transfer bonus could make the latter more appealing.

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Premium travel stretches the value of your points

If you’re booking premium travel, including business and first-class flights, redeeming points and miles almost always makes sense. These fares are expensive and points can save you a lot of cash. Luxury hotels are also costly, so redeeming points can be preferable over paying $500 to $1,500 per night. While redeeming points for premium travel is almost always better than cash, you should still compare cash rates and make sure you’re getting solid value for your points.

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To save money (even if cash prices are low)

While most travel experts advise you to save your miles for the highest redemption value, I’m here to tell you the opposite: Do what works for you, even if that means redeeming points when cash prices are low. If your goal is to save money, then go ahead and use your points. Not everyone wants to fly first class or stay at ultra-luxury resorts. Some people prefer to use points to eliminate travel expenses and if that’s the case, go for it.

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When your points are about to expire

Letting your points and miles expire is hands down the worst thing you can do with them. While plenty of loyalty programs have adopted a no-expiration policy, many expire after 6-36 months of inactivity. If you fail to earn or redeem miles within this time period, you’ll forfeit your hard-earned points. If your miles and points are close to expiring, redeeming them can make sense – even if it’s at a less-than-optimal rate.

To help you avoid this fate, here’s a list of the most common airline and hotel mileage expiration policies. Hopefully, knowing these policies will help you avoid this scenario altogether:

• Frontier Miles – 180 days of inactivity

• Accord Live Limitless – 12 months

• Hilton Honors – 12 months

• IHG Rewards Club – 12 months

• Air Canada Aeroplan – 18 months

• Choice Privileges – 18 months

• Hawaiian Airlines – 18 months

• Wyndham Rewards – 18 months

• Air France/KLM Flying Blue – 24 months

• Alaska Mileage Plan – 24 months

• American AAdvantage – 24 month

• Marriott Bonvoy – 24 months

• World of Hyatt – 24 months

• ANA Mileage Plan – 36 months

• British Airways Executive Club – 36 months

• Iberia Avios – 36 months

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When to book travel with cash

Points and miles aren’t always the best way to save money on travel. Sometimes, booking a trip with cash is cheaper (and more convenient). Paying cash is much more straightforward and beats researching multiple loyalty programs for the best deals. You can book any flight or hotel without worrying about blackout dates or award inventory restrictions. Low-season travelers might find cheap airfare and hotel packages worth booking over traditional awards. There are many scenarios where booking travel with cash makes sense over points. Here are a few:

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When flights and hotels are too cheap

Booking travel with cash is a great option when flights and hotels are too cheap to warrant award redemption. This comes down to calculating your redemption rate and comparing it against either your personal valuations or The Points Guy's. For example, if you value United miles at 1.1 cents each then redeeming 20,000 miles for a $250 flight is a good redemption because you’re getting 1.25 cents in value.

It may not seem like there are many “cheap” travel deals lately, but you’ll find low fares and hotel rates during the off-season. When you do, you might find those rates to be low enough to warrant saving your points for another redemption.

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When award rates are too high

Booking travel with cash makes sense when award rates are too high due to dynamic pricing models. With dynamic pricing models, airline loyalty programs adjust their award rates based on demand and other factors to maximize revenue. Airlines like Delta and United utilize dynamic pricing and when cash fares increase, so do miles. In the case of Delta, it can translate to some truly outrageous redemption rates (i.e., 82,500 Skymiles for a one-way economy class ticket that costs $1039 cash).

While the above redemption gets you a 1.2 cent value per mile (not terrible for Delta), transferring Membership Rewards to Delta for an award booking would be a terrible redemption. When award rates are high, and you’re getting poor value for your miles, you’re better off booking your flight with cash. You can save your points for better redemption and try to find an even lower cash fare with a low-cost carrier operating the same route.

The same principle applies to hotel loyalty programs. Sometimes, hotels sell out of standard awards and sell premium rooms at a much higher point rate. You might be better off booking cash and redeeming flexible points like Capital One miles toward the booking. Better yet, you can find a hotel outside that chain with lower cash rates.

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When you can’t find award availability

If you can’t find any award availability on your desired travel dates, you might be better off booking with cash instead of points. Airlines often release limited award seats on specific routes, which get snapped up quickly. Many impose blackout dates during busy travel periods, leaving saver award seats unavailable. Sometimes, award space is available but on an inconvenient multi-stop itinerary.

While hotel award inventory is generally more plentiful, you might have trouble booking with points during busy periods. Or perhaps you want to splurge on a specific room type that isn’t bookable with points. In these scenarios, paying cash can make more sense.

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To meet elite status goals

Booking travel with cash also makes sense when you're close to meeting your elite status goals. Most airlines don’t count award flights towards elite status requirements. So if you’re short a few hotel nights or flight segments, booking cash travel can make sense rather than using points. The benefits of having elite status can outweigh the money you spend crossing the finish line.

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Are miles worth more than cash?

Miles are a great way to save money on travel, but whether they’re worth more than cash depends on how you use them. While many loyalty programs allow you to cash out points and miles, the rate is much lower than if you were to redeem for travel. Business and first-class flights are typically the best way to redeem miles, providing value that exceeds the cash rate.

For example, the Chase Sapphire Preferred® Card can earn 60,000 bonus points after $4,000 in purchases in your first 3 months from account opening. That’s worth $750 when redeemed through Chase Travel℠. But if you were to transfer them to Aerlingus Aer Club, you could book up to two round-trip economy class tickets to Ireland. The points could be worth much more than $600 in cash. Even transferring these points to Hyatt can get you more than $600 in value if you redeem them for hotels.

Whether miles are worth more than cash depends on an individual’s preferences and travel needs. Those who fly frequently may find that collecting and redeeming miles is a great way to save money while enjoying all of the perks associated with air travel, such as priority boarding or free checked bags. On the other hand, those who don’t fly often may find that having liquid funds available is more useful since it gives them flexibility when making purchases instead of being restricted by specific airline rules or restrictions associated with using their miles for certain items only.

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Can I use points and cash to book travel?

Some airline and hotel loyalty programs allow you to redeem partial points and cash for award bookings. These awards are useful when you don’t have enough points for a full point redemption but still want to save money on travel. Points and cash awards can be an excellent compromise. The following airlines and hotel loyalty programs allow you to combine points and cash for award bookings.

• Air Canada Aeroplan

• Air France-KLM Flying Blue

• British Airways Executive Club

• Delta SkyMiles

• Iberia Plus

• IHG One

• JetBlue TrueBlue

• Marriott Bonvoy

• World of Hyatt

The exact point-to-cash ratio will depend on the program and award type. It’s important to compare cash prices against point rates to determine whether points-and-cash awards are a good value. You might assume that airlines and hotels will divvy the portions evenly, but that’s not always the case.

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Bottom line

Both points and cash are excellent ways of saving money on travel. Points are generally most useful during peak travel season or for premium travel experiences. Meanwhile, cash provides more flexibility for budget travelers and those who prefer simplicity over maximizing rewards. Incorporating both into your travel budget gives you an optimal way of going further for less.

*Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.