How We Decide Whether to Use Points or Pay Cash for Travel

One of the questions we get all the time is: How do you know when to use points and when to just pay cash?

And honestly, there isn’t one answer that works every time.

Just because we can book something with points doesn’t automatically mean we do. Sometimes we happily use our points. Other times, we look at the same trip and decide we’d rather pay cash and save those points for something else.

Over time, we’ve gotten much better at looking at the whole picture instead of automatically assuming that using points is always the better option.

Here are some of the things we consider when deciding whether to use points or pay cash for a trip.

1. We Look at the Cash Price First

Before we even think about using points, we want to know what the trip would actually cost us in cash.

If a hotel room is reasonably priced, we may decide we'd rather pay for it and keep our points for a more expensive stay later.

The same goes for flights.

If we find an inexpensive airfare that fits our schedule, sometimes paying cash makes more sense to us than using a large chunk of points.

On the other hand, if cash prices are unusually high, that's when our points can become especially useful.

We don't automatically use points simply because they're available. We compare our options first.

2. We Look at How Many Points the Same Booking Would Require

Once we know the cash price, we look at the points price.

Sometimes the decision is pretty obvious.

If a hotel would cost us a significant amount of money but requires a reasonable number of points, we may be very happy to use the points.

Other times, we'll see a relatively inexpensive cash rate paired with a points price that feels high to us. In that situation, we may decide to pay cash instead.

We aren't necessarily trying to calculate the absolute perfect value for every single point we redeem. We're looking at whether the redemption makes sense for our travel plans and the points we currently have available.

3. We Think About What Else We Could Do With Those Points

This is a big one for us.

Points aren't unlimited, so using them for one trip means we won't have those same points available for another.

Before making a redemption, we often ask ourselves:

Do we have another trip coming up where these points could be more useful?

For example, we might be able to use points for a relatively inexpensive hotel stay now, but if we know we're planning a more expensive family vacation later, we may choose to save them.

This is also one reason we like having different types of rewards available to us. It gives us more flexibility when we're planning multiple trips.

4. We Look at the Out-of-Pocket Costs Too

Booking with points doesn't always mean paying nothing.

Award flights can still have taxes and fees, and some redemptions may come with other costs.

So, we don't just compare:

Cash vs. points.

We compare:

Cash price vs. points + any cash we'd still have to pay.

That gives us a much better picture of what we're actually saving by using our rewards.

5. The Bigger the Expense, the More Likely We Are to Consider Points

One of our favorite ways to use points is to offset travel expenses that would otherwise take a significant bite out of our travel budget.

A $150 hotel room?

We may decide to pay cash.

Several nights at a hotel that would otherwise cost us thousands of dollars?

That's where we may be much more interested in using points.

That doesn't mean there's a specific dollar amount where we always choose one over the other. It's simply part of the way we think about our rewards.

We want our points to help make the trips we really want to take more manageable for our families.

6. We Don't Wait for the “Perfect” Redemption

This is probably one of the biggest lessons we've learned.

If you spend enough time in the points and miles world, you'll hear people talk about getting incredible value from their points.

And those redemptions are awesome.

But we don't think every redemption has to be the absolute best possible use of a point.

Sometimes the best redemption is simply the one that allows your family to take the trip you want to take!

Could there theoretically be a better use for those points six months from now?

Maybe.

But if using them today allows us to take our kids somewhere we've been wanting to go, that has value to us too.

A Real-Life Example: Why We Paid Cash in Venice

Our Europe trip with three families was a perfect example of why we don't automatically use points just because we have them.

There were 12 of us traveling together, and when it came time to figure out where to stay in Venice, we had options.

We could have tried to use hotel points, but keeping all 12 of us together would have been more complicated. One of the families also didn't have enough points available for the hotel options we were considering.

Instead, we found an Airbnb where all three families could stay together.

We split the cost between the families, the location was more convenient for what we wanted to do, and everyone got to stay in the same place.

Could we have used points for part of the stay?

Probably.

But for that particular trip, paying cash made more sense.

And because we didn't use those points in Venice, we still had them available for another trip where they could potentially offset a much larger expense.

That's exactly what we mean when we say we don't use points just for the sake of using points.

The Questions We Ask Before Booking

When we're deciding between points and cash, we usually come back to a few simple questions:

• What is the cash price?

• How many points would we need?

• Are there additional taxes or fees?

• Do we have another upcoming trip where those points might be more useful?

• Would paying cash for this expense comfortably fit into our travel budget?

• Does using points make this particular trip significantly more affordable for us?

There isn't a formula that gives us the right answer every time.

Sometimes we choose points.

Sometimes we choose cash.

And sometimes we'll even use a combination of the two across the same trip.

Points Are a Tool

For us, points aren't something we're trying to collect forever.

They're a tool we use to help make travel more affordable.

At the same time, we don't want to use them simply because they're sitting in our accounts.

We want to use them intentionally.

Sometimes that means redeeming a big chunk of points for a family vacation we've been dreaming about.

And sometimes it means paying cash for a reasonably priced flight or hotel and saving those points for the next trip.

Neither choice is automatically right or wrong.

The best option is the one that makes sense for your points, your budget and your travel goals.

New to Points and Miles?

If you're just getting started, don't feel like you have to understand every airline program, hotel program and redemption strategy at once.

Start with the basics, learn how the points you already have work, and think about where you'd actually like to travel.

Head to ourBeginner's Guide to Points and Miles for a simple place to start or explore What's in Our Wallet to see the travel rewards credit cards we currently use.

For us, points and miles have helped turn trips that once felt out of reach into trips, we’ve actually been able to take.

Credit card rewards, benefits, terms and offers can change. Always review the current terms and conditions of any credit card or loyalty program before applying, transferring rewards or making a redemption. We only recommend using credit cards responsibly and paying balances in full and on time.

Opinions expressed here are the authors' alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included within this post.