Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more. The Citi Premier® Card is no longer available to new applicants.
Points and miles are terrific tools that can open up incredible travel opportunities. Social media is awash with content by the Average Joe who managed to take extravagant vacations with just a few credit card sign-up bonuses, along with budget travelers stretching their rewards to the max.
If you're new to points and miles, you may be struggling to determine when using points or miles versus paying cash makes the most sense. The answer depends on a few different factors and varies for each traveler. But here are six times when you should redeem points rather than pay cash.
Best cards for earning points and miles
The most valuable type of points you can earn is those that can be transferred to airline and hotel partners, such as American Express Membership Rewards® points, Chase Ultimate Rewards® points, Citi ThankYou® Points and Capital One miles. Before diving in, here's a look at some of CNBC Select's best rewards credit cards for earning transferrable points and miles:
The Chase Sapphire Preferred® Card packs a punch for a $95 annual fee card, offering annual travel credits, comprehensive travel protections and more.
- You can transfer rewards to all of Chase's travel partners including World of Hyatt, Southwest Rapid Rewards and many more
- Long list of travel and shopping protections
- $50 annual Chase Travel hotel credit
- Has an annual fee
- Requires a high credit score
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
- Enjoy benefits such as 5x on travel purchased through Chase TravelSM, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases
- Earn up to $50 in statement credits each account anniversary year for hotel stays through Chase TravelSM
- 10% anniversary points boost - each account anniversary you'll earn bonus points equal to 10% of your total purchases made the previous year.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Complimentary DashPass which unlocks $0 delivery fees & lower service fees for a min. of one year when you activate by 12/31/27. Plus, a $10 promo each month on non-restaurant orders.
- Member FDIC
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
The American Express Gold Card is great for earning valuable Membership Rewards® points at restaurants worldwide and U.S. supermarkets.
- You can earn $400+ in dining and rideshare credits every year (Enrollment required for select benefits mentioned)
- Exceptionally rewarding for eligible restaurant and U.S. supermarket purchases
- No foreign transaction fees
- Larger annual fee
- Credits are more complicated, you earn them monthly or semi-annually
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you're approved and find out your exact welcome offer amount – all with no credit score impact. If you're approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You'll know upfront exactly how much you'll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That's up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
- See Rates & Fees
Foreign transaction fee
None
The Capital One Venture Rewards Credit Card has a reasonable annual fee and earns flexible travel rewards, which makes it a great travel card for beginners or heavy travelers.
- Valuable welcome offer worth at least $750 in travel
- You can transfer miles to over 15 Capital One partners, including Emirates Skywards, Choice Privileges and Singapore Airlines KrisFlyer
- No foreign transaction fees
- Lacks ongoing travel benefits such as statement credits or lounge access
- Limited bonus spending category that only applies to certain Capital One Travel bookings
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel
- Earn unlimited 2X miles on every purchase, every day
- Earn 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
- Miles won't expire for the life of the account and there's no limit to how many you can earn
- Receive up to a $120 credit for Global Entry or TSA PreCheck®
- Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
- Enjoy a $50 experience credit and other premium benefits with every hotel and vacation rental booked from the Lifestyle Collection
- Transfer your miles to your choice of 15+ travel loyalty programs
- Top rated mobile app
Balance transfer fee
$0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
Foreign transaction fee
None
Citi Premier® Card
Rewards
3X points per $1 spent at restaurants, supermarkets, gas stations, and on hotels and air travel, 1X points on all other purchases
Welcome bonus
Earn 60,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening. Plus, for a limited time, earn a total of 10 ThankYou® Points per $1 spent on hotel, car rentals, and attractions (excluding air travel) booked on the Citi Travel℠ portal through June 30, 2024.
Annual fee
$95
Intro APR
None
Regular APR
21.24% - 29.24% variable
Balance transfer fee
5% of each balance transfer, $5 minimum
Foreign transaction fee
None
Credit needed
Good/Excellent
Terms apply.
The Citi Premier is discontinued and no longer available for new applicants.
Pros
- Unlimited 3 points per $1 spent at gas stations
- No foreign transaction fees
Cons
- $95 annual fee
- No special financing offers
1. When you're booking luxury travel
Using points for luxury travel can be a great way to save money and access amazing travel experiences. With the right loyalty program, you can save on airfare, hotels, car rentals, cruises, and more. One of the best uses of points is for first-class flights and luxury resorts. An international first-class ticket can easily cost over $10,000 round-trip, while a top-tier hotel costs over $1,000 per night. Most people can't afford these experiences, but points can make them more attainable.
Points can make expensive hotels more affordable since they can often be redeemed for free nights at high-end properties that would otherwise cost thousands of dollars per night in cash.
The Maldives is a popular (and pricey) destination where your points can go a long way. A night in a beach villa with a private pool at the Alila Kothaifaru Maldives can easily go for $1,000 or higher. Meanwhile, you can book the same room for just 30,000 Hyatt points. At 3.3 cents each, you're getting exceptional value for your points, making this a great redemption.
Even if you can afford luxury travel, points can save you thousands of dollars that you can put toward other vacation expenses. The Maldives is notoriously expensive, with round-trip transportation between the airport and hotel often costing over $500 per person. Everything from meals to activities and spa treatments will command a premium, so using points to save on hotel and airfare can free up your budget for other experiences.
2. During peak and off-peak travel season
During peak travel seasons, such as summer and holidays, points can save you money when cash fares are sky-high. It's important to note that many airlines now impose dynamic pricing, meaning the cash price determines the mileage fare. However, plenty of programs still publish an award chart with set pricing so you can get value out of your miles. For example, summer fares between the West Coast and Paris can go as high as $1,300. Meanwhile, Avianca Lifemiles charges just 60,000 miles round-trip for an economy-class ticket.
Off-peak travel can also be an exceptional use of miles. For example, programs like British Airways Executive Club, Iberia Plus and Virgin Atlantic Flying Club still follow award charts, with lower prices to specific regions on off-peak dates. This is a great way to stretch your miles further while saving money.
The same goes for hotel loyalty programs, which adjust pricing based on demand. World of Hyatt even publishes an award chart specifying peak and off-peak pricing, which starts at just 3,500 points per night. Despite off-peak hotel prices being lower, you can still save money by using points. For example, the Alila Manggis resort in Bali has off-peak rates in October, starting at around $150 per night (including taxes). The same room requires just 3,500 Hyatt points, getting you 4.3 cents in value per point. That's higher than the 3.3 cents-per-point you can get in the earlier example in the Maldives.
3. When award tickets go on sale
Some loyalty programs offer the occasional sales, deeply discounting the miles needed for an award. For example, the Flying Blue program often runs Promo Rewards discounting award tickets by as much as 50%. When award tickets are this cheap, you are usually better off redeeming points than paying cash.
4. When you're booking flights last minute
Contrary to popular belief, there are hardly ever "last minute deals" on airfare – you need to book in advance to get a good deal. Last-minute flights can be expensive, which is where points come in. Many airlines release saver-level award space (especially in premium cabins) closer to departure. So if you book a last-minute trip, you can often find good award availability and save money on expensive fares. It's a win-win.
5. When your points are about to expire
Letting your points expire is one of the worst mistakes you can make with your rewards. Most airline miles and hotel points have expiration dates and the best way to track them is through an app like AwardWallet or MaxRewards. You'll get notified if your points are about to expire so you can redeem them ahead of time. While not all loyalty programs are included, most are and the program is free to use.
Using points before they expire is important because it allows you to get the most value out of them. So if you know an expiration date is nearing and you have no other way to keep them active, use your points for travel so they don't go to waste.
6. When you're not close to meeting your status goals
When deciding between using points vs. cash, it's important to also consider your elite status goals. Airlines don't count award bookings towards elite status qualification. So if you're close to reaching your goal, you might want to consider booking a cash fare instead of using miles. You can also double-dip by redeeming a flexible currency like Capital One Venture Miles. Capital One lets you book flights with your credit card, then redeem them at one cent per mile towards travel expenses. You can earn miles and elite status qualification through your chosen frequent flyer program while covering the cost of your ticket with Capital One miles.
Hotels are more flexible on this front. Choice Privileges, Hilton Honors, IHG One, Marriott Bonvoy and World of Hyatt all count award stays towards elite status. Knowing your loyalty program's policy can help you decide whether it makes more sense to redeem points vs. cash.
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What's the best use of points?
You'll generally get the most value by redeeming them for premium travel: international business class, first-class flights and luxury hotels. These high-priced experiences give you the highest return on your points, especially if you're booking with a loyalty program that publishes a set award chart. Even programs that utilize dynamic pricing can offer you tremendous value for your points when redeemed for premium travel.
That being said, the best use of points comes down to your travel needs. If you just want to save money, use your points. Don't obsess over the cent-per-point value you're getting or traveling to far-off destinations to keep up with the travel influencers. Redeem your points whenever it saves you money and keeps your budget on track. Points can devalue at any moment and using rather than saving them indefinitely is always the best way to go.
What's the worst use of points?
The worst use of points is generally for non-travel purchases. Gift cards, cash back and merchandise may seem like sensible redemptions, but they'll often get you less than half the value of your points. Points are meant to help you save on travel purchases, so using them for anything else is generally a losing proposition.
If you want to redeem your rewards for non-travel purchases, you might be better off with a cash-back card like the Chase Freedom Unlimited® (see rates and fees) or Citi Double Cash® Card. You'll pay no annual fee and earn generous cash-back rewards in popular spending categories. You can even convert your cash-back rewards to points. Citi Double Cash Card rewards can be converted to Citi ThankYou® Points if you have a card like the Citi Premier® Card. Meanwhile, you can convert your Chase Freedom Unlimited cash to Ultimate Rewards points if you have another card that earns those points (i.e., Chase Sapphire Preferred® Card (see rates and fees), Chase Sapphire Reserve® (see rates and fees) or the Chase Ink Business Preferred® Credit Card (see rates and fees)).
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus.
- Users get a high rewards rate and strong welcome bonus
- Purchases and balance transfers get long intro APR
- No annual fee
- Travelers face a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% - 27.74%.
- No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
The Citi Double Cash® Card is one of the best no-annual-fee cash-back cards thanks to its straightforward rewards structure.
- Balance transfers get a long intro APR
- Generous flat-rate cash-back rewards structure
- No annual fee
- Travelers face a foreign transaction fee
- Intro APR only applies to balance tranfer
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 17.49% - 27.49%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
Foreign transaction fee
3%
How to calculate the value of your rewards
Calculating how much value you would potentially get from your points and miles is easy. Simply take the cash cost of the redemption (such as a flight or hotel stay) and divide it by how many points/miles are needed.
For example, if a flight were to cost $500 or 25,000 points, you would get two cents in value per point. The calculation is: $500 / 25,000 points = $0.02 per point.
Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.
Bottom line
Ultimately, deciding whether to redeem points rather than pay cash for travel is a personal choice. You'll get more value by using them for high-priced travel experiences. But if you're a budget traveler who just wants to save a few bucks, use your points for that economy flight or low-category hotel redemption. The key is to have a use in mind before you start earning points. That way, you're less likely to hoard points and get caught in a program devaluation. "Earn and burn" should be your mantra and by planning ahead, you can do this while still getting value from your points.
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For rates and fees of the American Express® Gold Card, click here.
