NerdWallet's Smart Money Podcast - Stop Overpaying With Miles: The Redemption Rules Smart Travelers Use in 2025

Starting point is 00:00:00 If you're a regular smart money listener, you know Elizabeth and I love travel. Right now, I'm putting the finishing touches on my upcoming honeymoon in Japan, just a little over a month away at this point. And Elizabeth is flying across the pond for a trip to London in a couple weeks. Even though we travel a lot, knowing the smartest way to travel can be confusing. And that's where our sister podcast, Smart Travel, comes in. So we wanted to share an episode of Smart Travel with you so that you can also hear tips on how to get the most value from your travel credit cards.

Starting point is 00:00:28 And also, you'll learn the best way to pack a suitcase if you're a carry-on only traveler like me and so much more. We'll be back in a couple days with a brand new episode of Smart Money. Until then, Bon Voyage. So, Sally, one of my friends texted the group chat this week, and they were like, should I take a $650 flight voucher or $32,500 United Miles? That's a tough question, and I feel like I ask that question all the time. So what did you tell them? I told them, thanks to the work that our team does, we found out that.

Starting point is 00:00:58 United Miles are worth 1.2 cents. So would you rather have less than $400 in miles or that's $650 in flight credit? Ah, I'm no mathematician, but I'm going to say the $650 for sure. We are talking about the value of your points and miles in this episode and how we can do the math for you. Welcome to Smart Travel, a deep dive into the tips, tools, and tactics to maximize your travel dollars. I'm Megan Coyle. And I'm Sally French. And we're the travel nerds ready to help you plan your next big trip. Today, our teammate Craig Joseph is back on the show to talk about how to use points and miles valuations to save the most cash on travel. Yes, Craig.

Starting point is 00:01:40 And as always, we are talking about some credit card companies that are nerd wallet partners in this episode that does not influence how we discuss them. The benefits, terms, and fees mentioned were accurate at the time of posting, but things can change. Some offers may have expired by the time you're listening. So for the latest details, follow the links in the episode description. Lots of airline news in the past week. I'll start with Southwest Airlines adding a new international partner, Eva Air, which is a very well-regarded airline from Taiwan. The number one thing I know about Eva Air is their Hello Kitty planes. It looks so cute. I really want that amenity kit. Same. Me too. So this is Southwest's third new international airline partner this year after

Starting point is 00:02:18 Icelandair and China Airlines. So with this partnership, we are talking about what is officially called an interline agreement. Basically, this means you can fly through gateway cities in the U.S. have a trans-specific flight operated by Eva Air. So it does not mean you can earn any southwest points for your EVEA air flights, but it does mean that you get this easier flying experience for folks who are not at an airport already served by EVEA. So it basically just means that assuming your home airport has Southwest flights, you could fly from that airport to one of these Gateway Airports.

Starting point is 00:02:50 These are airports like Chicago O'Hare or L-A-X. From there, you connect to EVEA and then fly onwards to Asia. And the real benefit here is that the experience. is very convenient. You don't have to recheck a bag. Plus, since the Southwest and Eva flights are on the same itinerary, you'll get more help if you get delayed and you miss the connection. One odd note, though, you can book a ticket for this through Expedia or through Eva Air's website, but you can't search for a flight to Asia on the Southwest website yet. This doesn't impact us personally because our home airports of SFO and LAX already have direct flights to Asia on Eva, but this is really good news for people like, say, the people of Phoenix, where actually we should tell the listeners, Megan and I are right now. Phoenix has a huge Southwest presence, so someone in Phoenix could fly from there to say LAX, and then from there they could catch the Eva flight onwards to Asia, wherever that Eva flight is taking off, you know, assuming they want that Hello Kitty plane. Meanwhile, if you usually fly domestic airlines, we've got some news about Frontier. Frontier Airlines is trying to attract more members, especially anyone jumping ship from Southwest. Maybe Sally? Oh, not for Frontier, no way. Frontier just announced a promotion for Frontier Airlines World MasterCard card members to earn companion certificates. So to get the first one, card holders would have to spend just $3,000 on the card between now and January 31, 26. And then the more you spend, the more of these certificates, you can rack up. So if you spend $10,000, you get another companion certificate. Once you hit the

Starting point is 00:04:20 $20,000 threshold, you can get another one. Again, that is money you have to spend by the January 31st, 2026 deadline. But these spending thresholds are a lot lower than some of the other spending thresholds to get companion certificates. So literally Southwest just announced a promotion for a limited time companion pass the same exact day as Frontier. I was laughing. I was just thought it was so funny that two airlines were offering companion passes at once. And get this, from now until the end of the year, Frontier is also offering a gold status match for any elite members from Southwith Rapid Rewards, also JetBlue True Blue, Spirit, Spirit, or the new Atmos rewards, which has taken the place of what was formerly the Alaska Airlines mileage

Starting point is 00:05:03 plan. Frontier gold status is their second tier of elite status in the Frontier program. It has benefits like a free carry-on bag, which is critical because Frontier does charge for carry-on bags, free seat selection and free upgrades to what are Frontier's upfront seats. You get those four hours before departure, if available. I will say, though, that this status match does come with a fee, classic frontier. Oh, terrible. If you want to do the status match, there's a $69 application fee. That's the worst. All right, well, maybe I don't want Frontier elite status anyway. That airline is such a menace with all of its fees. I want to say one more thing about Frontier, though. If you're flying out of Fort Lauderdale, Houston, or Detroit, you're going to start seeing some more Frontier

Starting point is 00:05:44 flights before the end of the year. So if you're going to take any of those flights, doing any of these promos might save you some money. Save some money as a caveat. Frontier has so many random fees. Just make sure you know what you are in for before booking. All right. Well, let's talk about an airline with lower fees, and that's JetBlue. They just opened up award bookings with Condor Airlines. That's a German-based airline, and their planes are very distinctive. You can't miss them because they have stripes on them. Oh, my gosh. Man. I have to say, when this news came out, I googled it, and the photo attached, I was like, what in the world is this awful AI-generated image?

Starting point is 00:06:17 I thought the plane was so ugly. And then I was like, wait, this is not an AI fail. This is what the plane looks like. Yeah, they actually look like that. I've seen them in person. They do look like flying socks. That is not a good thing. But there is a good thing here.

Starting point is 00:06:30 And that is that you can fly on those planes with jet blue points. And the rates are quite good, especially from the East Coast. You can do economy class from New York to Frankfurt for 19,000 points one way, or even business class from New York to Frankfurt for 54,000 points one way. I toured a Condor airplane at LAX earlier this year, and I was actually super impressed with the business class. It's lie flat, the screen is 4K, and it's massive. And it doesn't look like a sock? Not the screen. The inside of the airplane is super fun.

Starting point is 00:07:00 So this is a huge win for people because previously Condor was only bookable with Alaska points, but now they've been. got JetBlue as well. And important to note, JetBlue is a transfer partner of almost all of the major credit card points programs with the exception of one kind of big one that would be built. Sorry, Megan. It's fine. But it's okay because listeners should know that not all of the credit card programs transfer to JetBlue at a one-to-one ratio, which is the one you want to go for. So Amex and Capital One transfer at a lower rate than that. So if you have the option, you should use your Chase or City points to transfer to JetBlue because you'll get more JetBlue points. So, when you're thinking about this one to run ratio, that basically means like a hundred chase points

Starting point is 00:07:41 becomes a hundred jet blue points. That's most common. If the second number is ever lower than the first number, so something like a two to one ratio, I would definitely pause. This brings up another news item this week, which is City actually just made it possible to transfer points to American Airlines. Their new transfer partner, we've already talked about them being able to transfer to American Airlines. But now people who have no annual fee cards can also make this transfer to American Airlines. So now if you have a city strata card, a city double cash, or a city custom cash card, all of those have no annual fees and they can all transfer to American Airlines, but it's at a lower ratio. It's one to zero point seven. Oh, no good. Zero point seven is less than one. So if you're trying to maximize your points, you might want to avoid all of that and just get a city card with an annual fee. The lowest one is the $95 city strata premier card. And with that card, you could get the one-to-one ratio and everything's good. Or you could just, I'm, you know, I'm such a fan of the city double cash because cash is so fungible.

Starting point is 00:08:40 You could just transfer your points to cash and then just book the flight on cash. Might be better if you have one of those cards. Definitely. That's a good tip. This is a lot of points talk. Yeah, today is all points. That's because I asked our teammate Craig Joseph to share the results of our latest points in miles valuation updates. Which the whole team spent hours and hours and hours on.

Starting point is 00:08:59 Our entire team has been working on this the past couple of weeks. And I also want to shout out gondola. It's an award search tool that helps us get data for thousands of hotel bookings. Thank you, Gondola. And it is going to be a lot of numbers. So just remember, if you need to reference any of it again, you can find our calculators and our findings linked in the episode description. All right, let's go.

Starting point is 00:09:22 Craig, welcome back to Smart Travel. Hey, Megan, glad to be here again. You lead this huge data collection project here on the NerdWallet Travel team. And it has to do with finding out the value of... of your points in miles. Can you tell us what we mean when we talk about how much a point or mile is worth? I think the easiest thing is to start by boiling down what airline miles and hotel points are, and they're effectively monopoly money. They're made up currency, right? You can't exchange them for cash, but you can use them to buy things that have a cash value, airline tickets

Starting point is 00:09:55 or hotel stays. So we come up with a point value or a valuation by comparing the cash cost of a flight or a hotel stay, with the number of points it would require for the same booking. And that gives us a relative value that we can then use for a couple of different reasons. And if we do this process over a large enough sample size, the valuation provides the base value to shoot for when you make a redemption. And it tells you whether you're getting a good value for your points, or maybe you should consider booking that flight or stay in cash. So just as an example, let's say I'm booking a flight on United Airlines, and when I divide the cash cost of a ticket by the number of points required, I see that I'm getting a value of 1.6 cents per point. And our travel team at NerdWallet, as you said, goes through this whole rigorous data process of determining the valuation for a bunch of different airline programs and hotel programs. And for United, we've determined a value of 1.2 cents each for a point. So because that redemption that I just mentioned would be 1.6 cents and it's above 1.2 cents per point, I can determine that that flight's a pretty decent

Starting point is 00:11:03 value for my points, and it may be worth using my United Miles instead of booking in cash. I feel like this was a huge unlock for me when I started getting into points in miles, because suddenly it made the decision tree so much easier about whether or not to book with your points or did you find a good deal. It just makes it so simple. So you alluded to it a little bit, but why are these point valuations so useful? So you just use the word simple, and that's exactly how I'd explain what I just said. That's the simple version. The more complicated version is that valuations can help you in a few different ways. First is that you can compare program values, so you can determine whether, say, a Hyatt point is more valuable than a Hilton point, and maybe

Starting point is 00:11:46 you want to shift your spending towards Hyatt points instead to get a better redemption value. Another way is to understand whether to transfer your credit card points to a travel partner or to book through the credit card travel portal at a fixed point value. And maybe the last way is to determine the value of a credit card sign-up bonus. And this is actually how I use valuations pretty frequently. It's to determine whether a sign-up bonus is worth paying an annual fee. Let's use the Alaska Atmos card that came out a few weeks ago as an example. You can grab a 100,000 point Alaska Atmost sign-up bonus when you hit the minimum spend requirement. So that's a pretty big slug of points. And our travel team recently determined the value of an

Starting point is 00:12:34 Alaska point at 1.2 cents each. So you could take that 100,000 point bonus and then multiply it out by 1.2 cents each and say that the sign-up bonus is worth roughly $1,200. And because the annual fee on that card is $395. That tells me that at least for the first year, that's a big boon and that I should be thinking about signing up for that card because the value of the sign-up bonus is so high. The sign-up bonus example is a really good one because I think it gives people the language to talk about these like made-up monopoly money currencies. So now you can say, oh, this is worth this amount of money in dollars and cents. And so then you can suddenly compare your sign-up bonuses, compare the transfer.

Starting point is 00:13:18 partners, like you said. And I also think, to add on to that, you know, a lot of award bookings in travel are not strictly just points. Like, usually there are some fees involved. And that's where people get really confused because it's like, oh, it's $100 here for this surcharge on this airline, but this, a number of points. And then on a different flight booking, those fees might be less, but it'll be more points. And people really don't know how to compare those two things. Yeah, that's absolutely right. So take British Airways avios for an example. British Airways often offers a fantastic value in just points for getting from the U.S. to London, but to fly through London, Heathrow, you're paying exorbitant fees that almost make it never worth it. By comparison, you could use another airline, say Aer Lingus, and you can send points to them, fly somewhere else in the UK, and not have to pay the surcharges that you would to fly through London. So you kind of have to compare apples to Apple's to Apple. when you're using these valuations. Oh, man, I was the one who collected all the data on British Airways, and those fees were no joke.

Starting point is 00:14:24 Sometimes up to hundreds of dollars extra just for using your miles. It's crazy. Okay. So how should people use these valuations that we've just calculated? Yeah, that's a good question. I think the first thing is that people should understand what the valuations represent. So this year, our valuations represent a middle of the road value or a median value for the entire data set that we look at. And again, we're looking at a large, large data set. We compiled all of that data across 21 airline programs and six hotel programs and select the value that's right in the middle of everything that we look at. So the results aren't skewed towards outliers. You can do that math for yourself when you're looking to redeem

Starting point is 00:15:06 points if you want. Or if you're mathphobic, we have calculators on nerd wallet that let you do this process automatically. So you just kind of input the cash and points cost of the redemption you're looking at, stick it into the calculator, and it'll spit out what your valuation is for that redemption and give you our point valuation through this whole process that we're talking about. And you can determine whether it's a good deal or not. And we should mention that we're not the only publication that publishes these valuations. Why should people use ours or why should they trust ours? Oftentimes, hotel and airline valuations are sold by affiliate outlets as being worth more than the average person is probably going to get for them. By using our process,

Starting point is 00:15:51 we're, again, we're just taking the data and picking the number right in the middle. We're not doing any fancy math or fancy statistics to try to upsell a value. And I think that's important because it lets you understand that in many situations, you're better off using points than exchanging cash for a stay. And that's what it comes down to at the end of the day. It's an opportunity cost. So you better to use your cash and hold on to points or vice versa. And some of the other outlets use different methods that don't involve the median. And they also focus primarily on things like premium cabins or luxury hotels, whereas we're focused on economy flights and hotels that span the gamut of different sized cities and different classes.

Starting point is 00:16:37 So I think the values that we represent are a better survey of the entire marketplace than some of our competitors. I agree. I think using some of the other valuations that are published out there, it is so hard to find a worthwhile redemption because they're like, oh, this point is worth three cents or something like that. And you just don't see that that often when you're actually searching for an awards day or an award flight. That's true. And most airlines and hotels make their point values kind of opaque. They now largely use dynamic pricing, so there isn't just an award chart where you know a stay is going to cost this many points. Now, oftentimes, the cost and value of redemption increases or decreases based on demand. So this comparison of your specific redemption value to a valuation and a reasonable valuation at that is sort of a crucial step in knowing if you're most optimally using your rewards. All right, so we've talked a little bit about hotels and airlines, and we'll get into

Starting point is 00:17:35 specifics of how much their points are worth. But I want to go to credit card points because you can also use valuations for credit card points. That's what you calculated as well. Let me just throw a question out there. Like, if someone were to just ask you how much are Chase Ultimate Rewards points worth, what would you say? So let me start answering that by saying that credit card points are unique and they're kind of a different beast because all of the major credit card programs offer airline and hotel transfer partners. So just off the top of my head, I think Chase has around 15 partners. So to get a value, you really have to compare the value of all those individual partners to put a value on Chase Ultimate rewards. So for simplicity, for all credit

Starting point is 00:18:17 card programs, my opinion is that it's best to say the transfer partner with the highest valuation is what the rewards are worth and then go from there. And that value is almost always higher than what you'll get through a travel portal. And what we found is that you almost always get better value through almost any of the transfer partners than through the travel portal. That's not explicit and it's not in every situation. But the majority of the time, travel partners will offer outsize value relative to the bank or issuers travel portal. Personally, I think this is the best approach, which is looking at the most valuable transfer partner. So for Chase's ultimate rewards, I personally think that Hyatt points are easily the most

Starting point is 00:18:56 valuable and that's what our data shows. We calculated Hyatt point at a value of 1.8 cents each. And just personally, that's exactly how I tend to use all of my Chase Ultimate Rewards, is transfer them to Hyatt for hotel stays. That's literally what I tell anyone who's like, I'm looking to get the most out of my chase points. What do I do with them? And like, transfer them to Hyatt and Book of Hyatt stay. Because Hyatt has this award chart, so their prices for stays are a little bit static. Not exactly. They have peak and off peak dates, but it can't go higher than the award chart. So that's great.

Starting point is 00:19:29 I've been able to get a lot of luxury stays at Hyatt's for like 40,000 points a night. And usually if you're trying to do that through Marriott or Hilton, it would cost 100,000 points a night or something like that. Something crazy. Just following up on that is I tried to use Hilton points in Seoul at a just run-of-the-mill Hilton Hotel. And it was like 210,000 points per night. Oh, my gosh.

Starting point is 00:19:52 It's wild. So it just speaks to the value of. if you're getting a luxury Hyatt hotel for 40,000 points a night versus 210,000 points a night for a run-of-the-mill Hilton in Seoul, probably are better looking at Hyatt. And for Chase specifically, how does points boost factor into all of this? Because that is also a way that Chase advertises that their points are worth more. Yeah, so this goes into the travel portal value, and it's a change that Chase made a couple of months ago. historically you could use Chase points at 1.5 cents or 1.25 cents a piece, depending on which credit card you had. It created a baseline value that was super easy for the novice to just go in and book a hotel, book a flight, book a rental car, or a cruise, and know exactly what their points were worth. Then Chase rolled out points boost, which is a way to get more value for your points on a very specific subset of redemptions. So we did a huge study.

Starting point is 00:20:52 back in June at NerdWallet to look into this new points boost process. And we found that the only time you were really getting better value on flights is when you were booking premium cabins specifically on United, sometimes with partner international airlines, but it was almost specifically on United. I think we only found around 3% of the overall flights that we looked at, which was around 13,000 total flights had an economy option. So unless you're one of those people that finds a point,

Starting point is 00:21:22 points boost option through the Chase Ultimate Rewards portal in a premium cabin on like 10% of flights that we found overall had the points boost cost, then you're now stuck paying one cent per point through the Chase Ultimate Rewards portal, which is a huge devaluation compared to that 1.25 or 1.5 cents a piece that you used to get. I think it's incredibly difficult to find a good flight with points boost, or as Sally would say, points boost. But hotels, I've actually had a little bit more luck doing that. I've found redemptions for like 1.5 or 1.75 cents per point. And hotel points besides high it are usually not worth quite that much. So that was pretty exciting for me. We're back in a minute. Stay tuned.

Starting point is 00:22:09 All right, back to other credit card issuers because not everyone has Chase. Let's go to Amex. How much are those points worth? So we determine the value of an Amex membership reward point at 1.4 cents each, and that's based off of their two most valuable transfer partners, which are A&A and Virgin Atlantic, both have the same point value. It's a little bit trickier with Amex because the membership rewards program is dominated by international airlines, right? So for Chase, you've got Hyatt as what we determined was the highest value, but you also have airlines like Southwest and United, which can take you pretty much anywhere across the United States.

Starting point is 00:22:51 MX membership rewards, you really have to be looking into more nuanced ways to use it. So use those points. So just for example, membership rewards can be used with A&A or Virgin Atlantic. A&A is a great choice if you want to fly from North America to Japan. And Virgin Atlantic is a better choice if you want to go from North America to Europe. So it's kind of more nuanced when you start to look at the point values for, for these different credit card programs. It feels like to get the most value out of your Amex points,

Starting point is 00:23:24 you do have to start learning these international airline programs. Same for Capital One, is that right? Absolutely, yeah. So the most valuable Capital One partner is Avianca Airlines. So we value Capital One points at 1.6 cents each, which is the value for Avianca Life Miles. It's a program that many people probably haven't heard of, but it can offer good redemptions when booking on partner Star Alliance

Starting point is 00:23:48 airlines, such as United. Right. So you can book United flights with Avianca points and usually for less points than you would on United. It's amazing. What about City? City is kind of a new player in this space because they just got a really valuable transfer partner. Again, it goes to this nuance, right? So City also has Avianca as a transfer partner. So City points we have at 1.6 cents each, but City is the only credit card program that allows you to transfer points to American Airlines. And that is hugely valuable, not only for domestic redemptions on American Airlines, but American partners with the One World Alliance. So you can now access all of the One World Alliance through using American Airlines if there's availability. So American Airline Miles

Starting point is 00:24:34 are slightly less valuable at 1.3 cents each. But as we talked about, you have to understand what the valuation represents. If you're looking to fly domestically, you probably want to use that American airline value more so than the Avianca value. But if you want to fly abroad, maybe Avianca is a better valuation to use. That's great advice. Okay, and we'll end this section with our favorite rewards program, you and me, Craig, which is built. What is their most valuable partner? Built rewards. All right. My opinion, the most valuable, transferable currency out there right now. built points come in at 1.8 cents each as well, same as Chase Ultimate rewards, and that's because Built partners with Hyatt. So for the same reason that Chase points are worth 1.8 cents each, built rewards are worth that because Hyatt offers outstanding value. Although there's another caveat to that, similar to the American Airlines situation with City, built is the only partner for Alaska Airlines. So if you want to use your miles or points on Alaska Airlines and then access Alaska Airlines, as amazing transfer partners, maybe your points are more valuable if you transfer there.

Starting point is 00:25:44 And if you want to earn Alaska miles outside of flying on Alaska or one of their partners or without using an Alaska credit card, builds the way to go. I've found it to be a great way to just top off my Alaska account when I'm booking through there. Okay, so let's zoom out to, I would say, hotels first. What should people just know about hotel points in general? We already talked about Hyatt is far in a way the most valuable. one there. But what about all the other ones? What should people know about the value of Marriott and Hilton points and some of the other programs they might not know about? Yeah, Hyatt points are the most

Starting point is 00:26:18 valuable and it's not even close. So knowing that a Hyatt point is valued around 1.8 cents each and Hilton points are at 0.4 cents each kind of shifts the scale towards finding more value in the Hyatt program than the Hilton program. All the other hotels kind of fall within the 0.6.0.7 0.8 cent per point range. Marriott Choice and Wyndham are all within that window. IH.G. is a little bit less valuable, a 0.6 cents each. And so Hyatt is for sure the best hotel. And then Marriott, kind of in the middle, Hilton, at the bottom, sadly. That's it. Yeah, exactly. I mean, if you want to look at at min max values, Hyatt's way up there, Hilton's at the bottom, and then in the middle, you've got all those other hotels, Marriott and Wyndham and those

Starting point is 00:27:07 other programs. I will say even though Hilton's points aren't worth that much, there's still a lot of ways to get value from that program. I know Sally likes her Hilton credit card, people like the elite status program. And we should mention that even though like an individual point for Hilton isn't worth that much, they do hand out these points like candy. Like, you earn a lot of them. So maybe that's something to consider if you're still thinking about your loyalty with Hilton. That's a good point. Yeah. If you can earn two Hilton points for every high. point that you earn just because they're so much easier to acquire, then you basically just doubled the valuation, right? So maybe it's not exactly apples to apples comparing the Hilton

Starting point is 00:27:46 point value that we just provided versus the Hyatt point value. But it's definitely something to consider. As you can see, there's a little bit of nuance in all of these valuations. It all just depends on who's using them. And, you know, if there's a Hilton hotel at a location you want to go, but there's not a Hyatt, those Hyatt points really aren't worth anything. So that just depends on where you want to go. Okay, let's move to airlines. Is there a similar trend with airlines where there's one standout airline and then everyone else is just kind of playing in the sand somewhere else? Let's break apart domestic and international airlines. So for domestic airlines, there really isn't a standout based on our data. JetBlue points offer the best median value at 1.4

Starting point is 00:28:29 cents each, and that's followed by American and Southwest at 1.3 cents each. And, you know, what we found is that all of the major domestic airlines had point values between 1.2 and 1.4 cents each. So you don't have nearly the spread that you do between, say, Hilton and Hyatt. When you look at international airlines, you have a bit more of a spread. And again, the valuations only really matter if the airline lets you go to where you want to, right? So A&A miles, for example, are great to get to Japan. You can also use them for partner bookings, but largely the best use is to get to Japan. If you're not trying to go to Japan, then you'll probably find Virgin Atlantic miles more valuable if you're trying to head east across the Atlantic to Europe or beyond. And, you know, if you're taking

Starting point is 00:29:13 those long flights, I know some people are interested in using their points for premium cabins like business class or even premium economy, which can be kind of fancy, actually. What should travelers know about the value of their points if they are booking a premium cabin. We said that our valuations are based on economy. So airline premium cabins offer the ability to get really outsized value for your miles and often way beyond the valuation that we set for economy seats. So just for example, back in April, I went to Europe and used Alaska miles booked on partner airline Finn Air. And what was cool about that is Alaska lets you book a free stopover in a city on the road to your destination. So I was able to go from Chicago to Amsterdam with a free stopover in Helsinki

Starting point is 00:29:58 and I sat in business class. 60,000 points got me a business class seat that flew, what, 6,000 some miles total. And that would have been over a $5,000 cash price. I never would pay $5,000 for an airline seat. But that gave me a redemption value at around 9 cents per point, I think, after taxes and fees were accounted for, which is awesome, right? Alaska Miles, based on our economy data is 1.2 cents each. I got nine cents in value per point. So that shows how valuable points can be if you're able to find premium cabin space

Starting point is 00:30:33 and if you're interested in flying premium cabin. And just for example, that 60,000 point flight, I think you could find the same flight for around 25,000 points in economy. So just a question of whether you'd prefer to preserve your points balance and sit in economy or sit in front of the plane

Starting point is 00:30:50 and drink blueberry juice and all the other fancy things that Finare gives you in the premium cabin. Wait, is the blueberry juice real? Oh, it's real and it's awesome, yeah. So in the pre-departure drinks, you know, you've got your choice of champagne, orange juice, or blueberry juice. Okay, I would definitely choose the blueberry juice. That sounds so cool. I got a second one.

Starting point is 00:31:07 It was so good. All right. Devaluation is a scary term that we throw around a lot, especially on this show, because when there are changes to a loyalty program, everyone is really scared that their points are going to be worth less. So can you talk about, like, how you would see devaluations, like, in the data that we collect and whether you saw any major devaluations this year? There were a few. The biggest, and we already talked about this with points boost, but the biggest

Starting point is 00:31:34 evaluation to a credit card issue or travel portal is easily through Chase. With the points boost feature, Chase Ultimate Rewards are now worth one cent each. If you book through the Chase Travel Portal, unless you're able to find a point boost option, where previously that was upwards of one. cent each depending on which credit card you had. For airlines, early this year, Southwest went through a number of changes, and one of those was devaluing their loyalty program. So we found that Southwest points are now worth 1.3 cents each, and that value has slowly been eroding over time. A few years ago, we had pegged those points Southwest Rapid Reward points at 1.6 cents each. So now there are

Starting point is 00:32:17 median values 1.3 cents each. So that's pretty significant. erosion of value. The one thing that we saw was consolidation of values among the domestic airlines, which is primarily the way that most people are going to try to use their points. So instead of having outsized value, you know, previously American Airline miles were somewhere around 1.6 to 1.8 cents each, we're now firmly within the 1.2 to 1.4 cents each mile value for each of the domestic airlines. You hate to see it. That's literally why I chose American airline when I started doing points and miles, whatever, like 10 years ago

Starting point is 00:32:55 or something. I mean, they used to be worth so much, and so it was really sad to see in the data that it's very similar to all the other airline valuations now. Again, we need to remind folks that we're basing our valuations on economy flights. American still provides arguably

Starting point is 00:33:11 the best value for international partners and international premium cabin redemptions across those partners because the One World Alliance just goes all over the world. So there's still a lot of value with American Airline miles. They're just not worth what they used to be. And you can still find some nice sweet spots.

Starting point is 00:33:28 Like, I literally flew to Nashville very randomly, like just a weekend in the spring. And I got like three cents per point on my economy flight for no reason. I think I just found a spot where the robot had not increased the dynamic price yet of the award flight. And that's the take home, right? Is that, you know, these redemption values tend to be demand-based. So that flight that you took, I don't know where you left from, but to get to Nashville, there were probably open seats on the flight. American Airlines would rather have cash for those, but if you're not going to get a revenue

Starting point is 00:34:02 ticket purchased, then they want somebody to redeem their points. So they just make it cheaper for you to redeem your points. You got to Nashville, you got a good redemption value, and American Airlines hopefully upsold you on internet or drinks or whatever it is they're trying to profit off of once you're in the cabin. Nah, I'm smarter than that. I'm smart travel. Wait, I did want to ask, though, I think that's exactly what happened, Craig, is it got too close to the departure date.

Starting point is 00:34:29 And so airlines start slashing the prices of the award flights. I know during our big data collection, we also collected data on close-in bookings. In our case, it was 15 days before departure. If you're looking at booking an award flight, what did the data say about the value of your points when you're using it for a last-minute flight like that. Yeah, so it depends on the frequent flyer program, but largely you're going to find better value close in than you will booking further out. So our methods, we looked at flights that were 15, 60, 90, and 180 days from the date of search for a departure, and the departures that were 15 days out by and large had a value around 20% better than we found elsewhere later in the award chart. So again,

Starting point is 00:35:20 that goes to the airline wanting to get people on the planes. And if there's a seat available closer to the time of departure, they'd rather increase the redemption value of their points and get somebody in the seat than to have it fly vacant. One of my favorite travel hacks is to book a flight on points. Book it ahead of time because it stresses me out to wait until the last minute. But then as you get closer, keep looking even for award bookings, you know, and see if you can actually cancel that flight you booked and rebook at less points because, like you said, they sometimes drop the price as you get closer to the departure date. That is a great travel hack.

Starting point is 00:35:57 I will caution folks, though, to know that depending on the airline program, if you cancel a flight, your points will be redeposited into your account immediately, but sometimes they're not. So just for example, I had transferred points from Capital One to Etihad back in April. I was hoping to get to Europe using points on Etihad's transfer partner JetBlue. I needed to cancel the flight that I booked, and it took three and a half weeks to get the miles back into my Ettiad account and change my flight. So just a ward of warning, know the terms and conditions for the award program that you're using before you cancel and try to rebook anything. Okay, that's a really good call.

Starting point is 00:36:37 Also, maybe put the flight on hold. Were you able to still book it, or you just now have Eddie Hodd points that you don't know what to do with? I was still able to book it. I had to change my dates around a little bit, but availability did open up. It was just a week later. Fortunately, I was able to book that, but the original flight couldn't be rebooked. Okay. Last question, Craig. How have valuations affected your philosophy on earning or saving or spending points? Like knowing all this information now, has that changed the way you redeem your points? So I'm definitely an optimizer when it comes to points redemptions. I love high value redemptions. and swanky hotels or business class flights that I would never pay cash for.

Starting point is 00:37:19 In my system, that's where I find value. But I also love money. I think valuation. Who doesn't? Yeah, right? If you can save money while spending monopoly money, it seems like a win. So every redemption I make is an opportunity cost to weigh the pros and cons of using cash versus flying in a swanky blueberry juice filled premium cabin, right?

Starting point is 00:37:44 Yes. I think valuations are a great tool, but I want to remind folks to never underestimate the freedom and flexibility that holding on to cash has. And because the points are this currency with sort of an arbitrary or made-up value, whereas cash is real money, you can use it to buy goods and services. And if your cash poor and points rich, consider holding onto that cash and using your points regardless of valuation that you determine. Especially when you're thinking about whether or not you should add a cashback card to your wallet, because when you think about having points locked away with an airline or hotel or even a credit card issuer and having cash that you could literally use to pay for your other expenses and things outside of travel, it might be more valuable to have the cash. But we're smart travel. We like both. You know, we always ask guests to do a hot take about travel for our hot takeoff segments. Craig, what do you have this time? Well, airport lounges have become largely accessible to most people that hold the right credit card. And because of that, I find that the majority of airport lounges are vastly overrated. They're often overcrowded and isn't the whole point of the lounge to find a quiet reprieve away from the main terminal?

Starting point is 00:39:02 Yes. Yeah, right? And I think that the mediocre food and average drinks and sterile ambience combined with sometimes questionable cleanliness in some of these more popular lounges decreased the value. And I've been in a ton of lounges. And it's not to say I'll never go. You know, my favorite lounges are the ones that are offered by specific banks, like the Capital One Lounge or Chase Lounge. But largely, I'd rather pay for a restaurant where I want to eat in the terminal. Take that to go and find a quiet corner somewhere to relax.

Starting point is 00:39:33 I hear you. I also think they could just make the airport terminal better, and then we wouldn't even need these airport lounges. Like, I'm not there for the food. I know Sally is, but I'm really not. I think you can get a sad salad somewhere else, but... My days of arm wrestling, somebody for cheese cubes in line at the priority pass lounge are over. That's a great one. I can't wait to share this with Sally. Craig, thank you so much for coming on smart travel. Yeah, I appreciate it, Megan. Thanks for having me. What did you think of that hot takeoff, Sally? I do think he is biased because what is his home airport? It's like a tiny random one. Well, he goes between North Carolina and Florida. So the Florida one's kind of big. It's Fort Lauderdale.

Starting point is 00:40:12 I will say I have been to the escape lounge in Fort Lauderdale and it is good. It is not great. I think he just needs to go to airports with better lounges. Okay. Send us your questions about valuations or anything else related to travel. You can email us at travel at nerdwallot.com or you can even send us a voice memo. And if you want to follow us on social media, you can find us on TikTok and Instagram. I am Save With Sally. And I'm Miles with Megan Co. And I'll post a picture of that question from the group chat. I swear my niche knowledge is useful sometimes. We're good friends. Make sure to follow Smart Travel on your favorite podcast app. That includes Spotify, Apple Podcasts, and IHeartRadio to automatically download new episodes. And if you're listening on Spotify, did you know? You can drop us a comment right in the app. This episode was produced by Tess Viglin. Claire Sosey and Hillary Georgie helped with fact-checking and Nick Kourissomy mixed her audio. Thanks, Nick. And we got to give that disclaimer.

Starting point is 00:41:06 We are not financial or investment advisors. This info is provided for general educational and entertainment purposes. It may not apply to your specific circumstances. We hope you're inspired to keep your passport full and your wallet even fuller. Thanks, everyone. See you next time. You know,

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