Why pay more? Here’s why paying 25K points is sometimes better than 15K

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Update: This post references an American Express Business Platinum feature that has changed. As of June 1, 2017, the pay-with-points rebate has changed to 35% for your chosen airline or any airline in business or first class. Additionally, there is a cap of 500,000 rebated points annually.

I had a small epiphany the other day.  I realized that when paying for flights, I should use the most restrictive points currency that matches my needs rather than the one that lets me book with the fewest points.

Consider this $317 flight:

Delta DTW-LAX 317USD

Thanks to the Amex Business Platinum card’s 50% point rebate, I could pay 15,850 Membership Rewards points (I’d first pay 31,700 points and then I’d get half back).  Or, I could use my CNB Crystal Visa Infinite Rewards and pay 25,705 points:

Delta DTW-LAX 317USD CNB 25705 points

On the surface, the Business Platinum option seems like a no-brainer.  With that option, I’d save almost 10,000 points.  Right?  Not so fast…

As I thought more about this, I realized that each points currency has a different maximum potential per-point value.  CNB points and Amex points are completely different and they shouldn’t be compared 1 to 1.  If we assume that CNB won’t radically change their rewards program for the better (a pretty safe assumption, I think), then I know from past experiments that using points to purchase flights is the best I can do with that currency.

Membership Rewards points, on the other hand, have the potential to be worth far more than 2 cents each when transferred to an airline program for a high value award flight.  It’s not unusual, for example, to get 3 to 8 cents per point value for international business or first class awards.

As I thought about this, I realized that when using points to pay for flights I should always use the most restrictive currency that delivers the closest to the maximum potential value for each redemption.  This is true even when the total point cost is higher.

General Strategy

Once I’ve decided to pay for a flight with points rather than with airline miles, my go-forward strategy will be to check whether the flight will maximize value from one of my point currencies.  If not, I’ll simply use the most restrictive currency I have.  Here are some examples…

  • Is the flight’s paid price less than but very close to $400 (or another FlexPerks threshold)?  If so, pay with FlexPerks points.
  • For other flights, pay with CNB Rewards points since paying for flights is the best use for CNB points.
  • If I want to book a car rental or hotel (and I don’t care about losing out on point earnings and elite privileges), then use US Bank Altitude Reserve points (once I get them!)
  • If I want to book a cruise, AirBnB, or really any travel other than air, hotels, and car rentals, then use a point system that reimburses travel after it is paid for.  Examples include Barclaycard Arrival Plus, Capital One Venture Rewards, BankAmericard Travel Rewards, etc.
  • If none of the above apply because I do not have enough points, then use Citi ThankYou points, Amex Membership Rewards, or Chase Ultimate Rewards.  Each of these will be held as a last resort because these points can be transferred to airline and hotel programs and have the potential for much more value than through their fixed value pay with points options.

What do you think?  Do you see any holes in this strategy?  Please comment below!

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