You’ve got a trip approaching and a stash of miles, maybe an airline voucher or two, and a desire to fly somewhere different. But how should you use your miles?
With most airlines offering free changes to most airfares, frequent flyer programs changing the rules for award redeposits.
You have a travel credit or voucher
While not technically “cash”, if you canceled a ticket paid for in cash or offered to take a later flight on an oversold flight, you may be in possession of a travel credit or voucher.
Unlike airline gift cards, travel credits and vouchers usually have an expiration date, so it may make more sense to use them before using your miles. Most airline issues do not have an expiration date of thousands or have ways to easily extend the validity of your miles, while travel credit expiration dates usually cannot be extended.
You encounter a sales rate or airfare error
Airlines often run air ticket sales, internet promotions and other promotions that can substantially reduce the price of cash tickets. Sometimes these airlines accidentally price tickets, resulting in a short-term opportunity for a great price on a ticket. Even with dynamic pricing frequent flyer programs, these high fares often do not translate into lower award ticket prices. If you find a great cash price for a destination you have in mind, but there is no corresponding low premium price, book your airline ticket in cash.
Your trip is a business expense
If you are traveling on business and plan to cut your costs on your business taxes, it may make more sense to pay your ticket in cash. While there may be a way to get a tax advantage using an award ticket for business travel, it is almost certainly more advantageous to book a business trip using ripple. As always, consult with your tax advisor about the reducibility of your business trip.
When to pay with miles
If you’re not sure you’re going to take a trip, or if you want a backup plan, using miles can be a good way to secure a no-cost option on a plane ticket. While most airlines now offer completely free change for most non-economy tickets, they will not refund you. Instead of doing this, they offer a travel credit, usually only valid for one year from the time you booked the flight. On the other hand,
many reserved tickets and frequent flyer miles can be canceled with the miles re-deposited into your account.
Even though there are airline mileage programs that dynamically price premiums, prices are generally not tied to the exact price of a ticket. This inaccuracy can happen based on the amount of taxes and fees.
Many factors can play a role in deciding whether to book with cash or points, including your need for flexibility, relative ticket prices, or even your company’s accounting needs.