This article is part of a series by credit card rewards expert Jason Steele.
At first, my only reason to get serious about the points and miles game was to be frugal. I wanted to travel more for less, and I had already taken every possible measure to reduce my airfare and lodging expenses. But as I found myself scrimping on travel costs, I eventually discovered that I was not enjoying flying in cramped coach accommodations or staying at budget hotels far from the sites I hoped to visit.
But then, as I started getting serious about collecting points and miles and using them for award travel, I noticed something interesting. I started comparing the value that my points and miles returned for economy travel versus luxury awards and I found that higher end reservations returned far more value in pennies per point/mile than less expensive options.
For example, I always had difficulty finding a coach class airline award for 25,000 miles that would have sold for more than $500. More often, the seats could have been purchased for the $300-$400 range. But even if I found a seat that was truly worth $500, that would only be returning two cents per mile. In contrast, a business class award to Europe was “only” 100,000 miles, but could easily be worth more than $6,000, a return of over 6 cents per mile.
In other instances, such as a business class ticket to Africa, I spent 120,000 miles while coach would have required 80,000 miles. Clearly, business class tickets are 50% or more expensive than coach. And the same pattern held true with hotels, although the results varied greatly by program. For example, a night at a Grand Hyatt was never more than 22,000 Gold Passport points, while a room at much less expensive hotels in their chain required nearly as many.
But moreover, I found that I saved money when I redeemed more points and miles. I paid fewer baggage fees when I was in first or business class, and I enjoyed free in-flight dining as well. On the ground, I found that luxury properties were often closer to my destination and reduced the time and money I spend on subways and taxis. From airport business lounges, to hotel buffets on executive floors, I realized that I saved significantly on food and drinks as well. But most importantly, I was starting to enjoy my hotel stays and even look forward to my flights in business class.
It took me a long time to realize it, but by spending a little more points and miles and treating yourself right, you can receive more value and enjoy your vacation more fully than you would when attempting to economize. After spending millions of points and miles, I will still be frugal with my cash, but I am sure to redeem more points and miles when the return superior value.