Travel rewards can be a valuable and fun way to take the sting out of the growing cost of a vacation. But airlines and banks like to tempt you with uses for your miles that don’t make the most of them for you. They’re counting on that so that they don’t have to pay up for the best rewards for you.
Watch out for these ‘options’ – think twice before taking advantage of them, because they could cost you lots of travel savings you’ve already earned:
Using your miles for Merchandise: This is just a bad deal all around. Unless you have no plans to travel in the future using your miles to buy merchandise like electronics or jewelry doesn’t get you far. First, the gifts aren’t cheap – an iPad Mini will set you back over 67,000 Delta SkyMiles for example. That compares to about $300 if you buy it in cash. At minimum those 67,000 miles could get you $670 in airfare on Delta. So unless you have no plans to ever fly again this is not a good deal.
Using ‘cash and miles’ options: American Express Delta SkyMiles cards make you eligible for an option to ‘pay with miles’ for your flight. So instead of the 25,000 miles a domestic roundtrip usually costs, you can use miles to pay for some or all of the cost. Here’s the catch though. Your miles are only worth about 1 cent each when you do this. So a $300 ticket can be made ‘free’ for 30,000 miles. But it’s possible that same $300 ticket could be made available for 25,000 miles if you redeemed your miles the traditional way. So check to see which will cost you fewer miles before you do this.
Buying miles: Airlines will often give you the chance to buy miles for yourself, to help top off toward that next reward. But they’ll make you pay up. A lot. For example United charges $35 for every 1,000 miles you buy. So if you buy 10,000 miles that will cost you more than $350. If you’re saving up for a domestic ticket that could end up costing you more than buying the ticket in cash. Not a good deal. Occasionally, airlines will offer big bonuses when you buy miles, so the cost per mile comes down substantially. In those cases if you’re saving up for an award that would very expensive in cash it can be worth it, but it’s almost never worth it at the regular rates. Instead, sign up for a credit card offer. They’re always plentiful, and even if you already have the airline’s card you may still be eligible if you’ve held it for a while. Or, consider applying for a card that lets you transfer miles into your airline.
Reinstating your miles: This is a problem that shouldn’t happen to you in the first place. When your miles expire, airlines will let you buy them back for a price. And it’s not cheap. It can cost over $100 to reinstate 30,000 miles for example. That can certainly be worth it if you are going to end up spending $300 or more on airfare without the miles, but why be in a situation where you have to pay to get your miles back? You can keep your miles from expiring without ever flying. For example, consider donating a small number of miles (1,000 or so) to charity. That will reset the clock for mileage expiration.
Paying double miles when you don’t have to: Airlines love it when you pay too much for flights with miles. They rely on you not doing your homework and just looking at their website for award flight options. But the reality is airline websites don’t give you all of your options. If you’re shopping for a trip and see flights pricing at higher than the lowest advertised mileage level, dig deeper. A lot of partner flights aren’t shown on airline websites. And these partner flights may be the ones that get you an award flight for less. If they’re not on the website it’s less likely they’ll be snapped up so it’s worth giving the airline a call and asking about partner flights. All airlines list their partners on their websites, so you can ask for specific ones. And if the agent doesn’t find seats available, hang up and call again. Agents don’t always know where to look, so it’s worth some extra time on hold to make sure all of your bases are covered.
There are other ways airlines want you to part with your miles that don’t give you the value you deserve, so always be on the lookout. Remember the best reward for you is a trip to a place that’s memorable with people you want to be with, and costs less than paying for it in cash.