Points Principles: When to Use Points vs. Paying Cash
use points vs paying cash

Points Principles: When to Use Points vs. Paying Cash

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Editor’s Note: Welcome to our Points Principles series, an occasional post dedicated to explaining the basics behind the confusing world of frequent flyer miles and travel rewards points. Follow along as we lay out some of the building blocks to travel for nearly free. And check back to the Points Principles page to see what ground we’ve already covered. 


There’s nothing quite like the feeling of booking a free (or nearly free) flight with points and miles. But there is one equal and opposite feeling: realizing you could have gotten much more value out of the points you just forked over.

One of the steepest parts of the learning curve in the miles and points world is understanding the best times to use points and miles versus paying cash out of pocket for flights instead. We’ll walk through a few factors to consider when deciding whether to use your hard-earned points or miles.


What is CPM?

CPM stands for cents per mile, and it is a simple equation that can help you decide whether to use points and miles or pay cash for your flight. It works like this:

Cost of flight in cash / cost of same flight in miles = cents per mile (cpm)

Say you’re looking at a roundtrip flight from Minneapolis-St. Paul (MSP) to Washington, D.C. (DCA) on Delta. You could pay $250 for the trip, or you could book the flight for 25,000 SkyMiles. With the above formula, you’ll see that works out to exactly 1 cent per mile. And that’s generally the bare minimum you want to shoot for. Personally, I always shoot for 1.5 cents per mile, and preferably well over 2 cents per mile. As you’ll see below, that’s not hard to do.

Keep in mind that when you’re using your miles to book a flight, you won’t earn miles or build on any airline status on that trip. There are some exceptions, such as using Delta’s Pay With Miles feature, or booking a good flight deal with points through the Chase Ultimate Rewards portal. All of these require holding different credit cards, so not everybody will have access. But it’s worth considering when deciding whether to use points and miles or paying out of pocket.


Pay Cash When Flights are Cheap

This is what it all boils down to.

When flights are cheap, you should consider using your cash instead of tapping into your reserve of points and miles. When flights are expensive – a huge trip, first or business class, a last-minute flight – your miles can help out.

So what’s cheap? That’s up to you. At the end of the day, you should use your hard-earned points and miles on a trip that you otherwise couldn’t afford. And that’s a personal question.


Don’t Waste Your Miles on Short Flights

This is my personal mantra. It rarely makes sense from a cents per mile perspective, and logically, you need longer than a few hours on a plane to appreciate the fruits of your labor.

Nearly every airline program sets its award prices based on zones, like U.S. to northern Asia, Europe to South America Region 1, and so on. Regardless of the extra distance, that means a flight from Seattle to Tokyo generally costs you no more in miles than the far longer flight from New York City to Tokyo.


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For many airlines, that also means the two-hour flight from Minneapolis-St. Paul (MSP) to Washington, D.C. (DCA) will cost you the same amount as the far more expensive, transcontinental trip between Los Angeles and New York City. The shorter hops rarely present a good value, and unless you’re booking last minute or out of options, you’re generally better off paying cash.

All that said, that has started to change. Delta regularly offers SkyMiles flash sales with dirt-cheap rates on domestic flights. United has matched the airline with one-way flights as low as 5,000 miles, which could make sense. And the same is true for American and its economy web special fares starting at 10,000 miles round-trip.


Make Sure You’re Getting the Lowest Mileage Price

While flight prices can fluctuate wildly, award flights tend to be more stable. That makes it easier to ensure you’re getting a bargain for your miles. This is because most airlines have just two or three tiers of award tickets: the low redemption level (which is often labeled “saver”), and a second and/or third, higher amount.

With no award chart governing prices and eight-plus tiers of increasingly expensive award ticket redemption levels, Delta is a notable exception to this rule, and United and American have started following their lead.

When you’re zeroing in on the flight you want to book, look at a month or more of award availability to ensure you’re getting the lowest possible amount. Or Google the “award chart” of the airline you’re booking through, which will help you determine the baseline price for your flight. For example, American Airlines’ award chart will show you that the base charge for almost any flight in the continental U.S. is 12,500 miles one-way.


aa award chart


Thrifty Tip #1: Booking award flights at the lowest mileage level is critical to ensuring you get the most out of your points and miles. If you can’t find your fare at the base or saver level, it’s worth considering paying out of pocket.


Think Big

As you start traversing continents, the price of your flight generally increases. The money you’re squeezing out of your miles rises when this happens as well.

Booking a trip to Europe, Asia or Africa is the easiest way to get the most value from your points, as these long haul flights can sometimes cost $1,000 or more round trip. That makes those trips a great use of your points from a cents per mile standpoint, but it also highlights the true value of miles and points that you can’t quantify.

These points you’ve earned are your license to see the world and enjoy experiences you otherwise couldn’t afford. If you’ve got the miles to splurge, the value is even higher when you book first or business class. This is where you can get the most bang for your buck. Because although the flights often cost thousands (or tens of thousands) of dollars, the amount of miles you’ll pay generally isn’t significantly higher than an economy ticket. 

After saving up Chase Ultimate Rewards points I earned from the Chase Sapphire Preferred card for more than a year, I booked a flight home from our honeymoon in Bali (DPS) in Singapore Airlines business class.


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Paying cash, this flight would have been more than $6,000 each! I could never afford that flight, but by transferring 93,000 Ultimate Rewards points to Singapore for each ticket, it was attainable. That also works out to nearly 7 cents per mile!


Bottom Line

Getting the best value out of your points and miles is the key to making them last longer and go farther. That can sometimes involve a difficult decision to use cash even when you’re sitting on a pile of points.

But don’t get paralyzed or consumed by the chase to get more out of your miles. Ultimately, these are just guidelines. At the end of the day, the best use of your points & miles is for a flight that you couldn’t go on without out them.


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

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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