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Cash or Credit Card Points: The Best Way to Pay for Your Flight

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With the prevalence of credit card and airline reward programs, paying for flights with reward points has become a common option for consumers, especially for the travel hackers who search for the best possible deals. One of the trickiest aspects of reward programs is knowing when to use your reward points and when to pay in cash. There are a few ways to make the decision easier.

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Cash or Credit Card Points: The Best Way to Pay for Your Flight

  1. 1. Cash or Credit Card Points: The Best Way to Pay for Your Flight With the prevalence of credit card and airline reward programs, paying for flights with reward points has become a common option for consumers, especially for the travel hackers who search for the best possible deals. One of the trickiest aspects of reward programs is knowing when to use your reward points and when to pay in cash. There are a few ways to make the decision easier.
  2. 2. The Availability of Award Tickets Paying for a flight with reward points isn’t always an option, as many airlines have blackout dates where award tickets aren’t available. Before doing the math on whether it makes more sense to pay in cash or reward points, make sure paying in reward points is even an option for the flight you want. The Value of Reward Points The easiest way to decide how you should pay for your flight is by setting a value for your reward points. As of 2012, a standard value for reward points was 1.4 cents, based on the average cost of a domestic flight at the time ($361) compared to the minimum number of points for a domestic ticket (25,000). Neither of those numbers has changed much since 2012, so this is still an accurate point value. That also means that it’s best to avoid using your reward points for fares lower than $361, as you’ll probably overpay in points. While 1.4 cents is a good baseline value, you may value your reward points differently. Those who know how to get maximum value from their points, or those in travel-friendly reward programs, may attach a higher value to each reward point. Elite Status Tiers One situation where it makes sense to pay in cash instead of points is when you’re approaching an elite status tier with the airline. These tiers offer significant perks, but you have to pay for a certain amount of fares annually to stay in them. If you’re close to moving up, pay in cash.
  3. 3. Reward Points — The Superior Option for Business Class and First Class As a general rule, you get more value out of your reward points when you put them towards higher-priced tickets, especially business class or first class tickets. It makes sense to use your points for those type of tickets whenever possible. However, on flights that are only a couple hours long, economy is usually the best value because the flight isn’t long enough to maximize the benefits of an upgraded seat. Consider your future travel plans before booking a ticket with reward points. If you plan to take a cross-country or international trip soon, you may want to save your points for that. Final Thoughts There’s no right or wrong when it comes to using cash or reward points. If you are short on cash, use your reward points. That being said, it’s typically best to save your reward points for the more costly flights and pay cash for cheaper or shorter flights. Eugene Schneur is a real estate mogul and the co-founder of Omni New York.

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