Tips for deciding when to use rewards to book a flight.

Using miles or points to book flights is smart but sometimes paying cash is smarter. Here’s a quick look at how travel rewards work, when it makes sense to use them for free flights and when it doesn’t.

Points and miles are currency

Points and miles are both a type of currency that may be used for flights and help travelers save money.

Credit cards typically offer points based on purchases. Airline loyalty programs offer miles based on distances flown and seat type. There are also credit cards co-branded with airlines that reward card holders with miles.

The value of points and miles depends on the program rules set out by the airline or credit card issuer.

Determining the value of miles

To determine if it’s worth booking a flight with miles, you need two pieces information:

• The cost of a ticket in dollars
• How many miles are required for the ticket

To calculate the value of each mile use this formula:

$ Cost of a paid ticket ÷ Miles needed for a ticket = Value of each mile

Let’s try it with a ticket that costs $400 or 25,000 miles:

$400 ÷ 25,000 = $0.016/mile

Now let’s look at another flight that costs $1,200 or 40,000 miles:

$1,200 ÷ 40,000 = $0.03/mile

In our second example, the miles value is about double the first example’s. In many cases, it’s better to pay cash for cheap or short flights and reserve rewards for costlier, long-haul flights.

There are some situations when it might make sense to use points even if you don’t get the maximum value. One is when you’re short on cash and want to avoid debt. Another is when you book a last-minute ticket at peak pricing times (like the December holidays) and want to keep out-of-pocket expenses low.

The value of points depends on the card issuer’s rules

The value of rewards points varies among credit card issuers. Most provide one cent per point, but redemption values may vary based on how they are redeemed. In some cases, points redeemed for travel offer a higher value than points redeemed for cash. If using points for flights, check out the details for your card issuer.

Choosing when and how to use rewards points and miles

The timing of rewards points depends on your travel goals and available cash.

Are you aiming for a free international flight? Wait until you have enough rewards for that big trip.

Maybe you’d prefer a more a comfortable flight experience on an upcoming trip. Use rewards to upgrade to business or first class.

If you fly infrequently, you might want to use rewards miles as soon as you’re eligible to use them.

Frequent flyers have more opportunity to build up rewards and use them. These travelers can get the most out of the rewards by using them strategically. This means calculating the value of their mile for each trip.

Some flyers forgo using rewards for free flights so they can earn a higher status with a specific airline. They’d rather pay cash for a flight and use their rewards to get better perks for the next year.

Also, if rewards or miles have an expiration date, this may affect when you choose to redeem them. It’s better to get a free low-value flight than no free flight at all.

It’s worth noting here that in recent years, most airlines have eliminated fixed award charts. Instead they now favor dynamic systems where the number of miles needed for a free flight fluctuates based on factors like demand or the current price of the ticket.

Whether it’s best to use points, miles or cash for flights depends more on your priorities than any rules or formulas. Use them as you see fit and enjoy your travels!