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Use Your Credit Card Rewards Creatively to Cut Travel Costs

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The gist: Turn rewards points into miles or use them for free hotel stays to help cut holiday travel costs.

When was the last time you redeemed your credit card rewards points? Even if you don’t have a hotel- or airline-branded card, you may be able to turn your points into miles for some good travel deals that’ll make for significant cost-cutting this holiday season.

American Express Membership Rewards

One of the perks of Membership Rewards Points is that you have the option to give yourself advances. If you don’t quite have the points you need, AmEx will allow cardholders to give themselves an advance of up to 60,000 points, depending on what type of card you have.

Points are worth 1 cent each for most redemption options. It’s important to know, though, that American Express points are more flexible than most in that you can transfer them to many major airline and hotel programs. This flexibility really adds to the value of the points and is likely to come in handy as you juggle your loyalty program rewards.

Starwood Points

The Starwood American Express is a superstar when it comes to travel. You earn up to 5 points for each dollar you spend at SPG hotels and resorts, and 1 point on other purchases.

What makes the card so great is the high value of the points, as well as their versatility. You can get a great value if you redeem Starpoints for hotel stays – up to 5 cents per point, and 2.3 cents on average, by our calculations. Should you redeem for airline miles, you still get a better deal than you’d get with most branded airline credit cards. 20k Starwood Points translates into 25k miles on a range of airlines including Delta, American, Virgin Atlantic, and US Airways, for a value of 1.25 cents per point.

Marriott Points

The Marriott Rewards Premier gives the best rewards rates of the Marriott cards, earning 5 points for every dollar spent at the hotels; 2 points per dollar on dining, rental cars, and airfare; and a 1% rewards rate on everything else.

If you have Marriott Points to use up this holiday season, your best bet is cashing in on hotel stays. Although the points can be redeemed for miles, doing so cuts your conversion rate down to about 1/5 of a mile per point. Not a good deal, especially when you consider that the redemption process can take as much as 6 weeks.

Using your Marriott Points for hotel stays, instead, will make them worth around 1.06 cents a piece.

Marriott also gives you the option of buying up to 50k points a year at a cost of $12.50 per 1,000 points. As with most point buying offers, this one is no good. At 1.25 cents per point there’s no deal here.

Hilton Honors Points

Hilton offers a suite of cards with a variety of rewards rates and redemption options. HHonors Points are worth between 0.1 and 1.7 cents each and can be redeemed for hotel stays, entertainment parks, car rentals, cruises, or airline miles. Keep in mind that points don’t cover fees and taxes, which can cost you over $50 at hotels.

While some redemption options make for a great deal, others will sell you short on point value. The deal you get with your Hilton HHonors credit card will be based on which of three tiers the hotel falls into, as well as season and location.

As an example, a night in the Hampton Inn Houston/Baytown (Tier 1) might cost around $130 if you pay, or 7,500 points. In this case, your points work out to 1.7 cents each, well above the industry standard of 1 cent per point.

By contrast, staying in a similar room at the Tier 3 Hampton Suites in Aberdeen, South Dakota only costs around $109 if you pay, but requires 25k points. In this second scenario, your point value goes down to 0.4 cents. Using HHonors Points for airline miles sinks the value to between 0.1 and 0.2 cents per point.

The moral of the story is to do a little math before choosing to redeem your points, so you can be certain you’re getting the best deal possible.