Millions of travelers will swarm airports and hotels this holiday season — but not all of them will pay full price. You don’t have to, either, if you’ve saved up enough points or miles on your credit card. Redeeming rewards strategically could save you hundreds on your trip.
NerdWallet surveyed major travel rewards and loyalty programs to find the best redemption strategies for holiday travel. Here’s what you need to know to get the most out of your rewards during peak season.
Airline loyalty programs
Even though many airlines are reportedly making more seats available for cardholders redeeming their rewards, it can still be tough to find affordable award tickets during the holidays. Here’s what we found in looking at eight major airline loyalty programs:
- Peak season deals: Alaska, American and United were the only airlines that listed a flat award price for all flights in the continental U.S. on their websites. By comparison, other airlines set awards prices according to location, availability, the cash price of a ticket or a combination of these factors. For expensive long-haul domestic flights during peak season, these flat rates can yield high redemption rates.
- Most valuable: Virgin America Elevate points are worth 2.2 cents each when redeemed for flights, according to NerdWallet calculations.
- Discounts: British Airways and United offer lower fares on off-peak days, including some during the holiday season, which they list on their websites. American Airlines offers mileage discounts to cardholders.
- Redemptions to avoid: On Alaska and American, the least expensive one-way award tickets are 12,500 miles each. On United, they’re 10,000 each. If you get a one-way ticket that costs less than $125 or $100 with your rewards on these airlines, respectively, you’d be getting less than 1 cent per point, a poor value.
- Good to know: Most airline-branded credit cards offer free checked bags.
If you’re planning to redeem your American Airlines AAdvantage miles for an international ticket, this holiday season may also be a good time to do it. On March 21, 2016, the airline is overhauling its rewards program and increasing the amount of miles required for those trips.
Airline loyalty programs, compared
|Average Value Per Unit||How the program works||Best strategy||Avoid redeeming for:|
|Alaska Airlines Mileage Plan|
|1.3 cents||Flat-rate miles price for each region||Use miles for your most expensive trips.||One-way flights that cost less than $125
Why: The minimum cost for one-way tickets is 12,500 miles, regardless of the cash price.
|American Airlines AAdvantage|
|1.2 cents||Flat-rate miles price for each region||Use your miles for your most expensive trips, and see if you can get reduced mileage awards, which allow you to book at a discount. If you usually spend your miles on international flights, redeem before March 21, 2016, for better value.||One-way flights that cost less than $125
Why: The minimum cost for one-way tickets is 12,500 miles, regardless of the cash price.
|British Airways Executive Club|
|1.6 cents||Avios price adjusted for availability and location||Use your Avios on off-peak travel days.||Flights with big fuel surcharges
Why: You can actually end up with a negative value for your Avios with these fees.
|1.8 cents||Miles price adjusted for availability and location||Book two one-way flights, instead of a round-trip flight, to see more low-mile options.||Pay With Miles feature for trips under $100 or international trips.
Why: You’ll typically get less than 1 cent per mile in this situation.
|1.4 cents||Points price depends on dollar price of ticket||Bundle flights with hotels for slightly better value.||N/A|
|Southwest Rapid Rewards|
|1.0 cents||Points price depends on dollar price of ticket||Use your points for Wanna Get Away tickets for slightly better value.||Business select and anytime tickets
Why: You’ll get a slightly lower redemption value, on average.
|1.7 cents||Flat-rate miles price for each region. Saver awards are also available.||Use your miles on saver awards, if available.||One-way flights that cost less than $100
Why: The minimum cost for one-way tickets is 10,000 miles, regardless of dollar price.
|Virgin America Elevate|
|2.2 cents||Points price depends on dollar price of ticket||Use your miles on the lowest-cost tickets, if possible.||N/A|
Hotel loyalty programs
Some hotel groups, such as Hilton and Starwood Preferred Guest, don’t restrict award spaces during peak season, but rooms can still cost plenty in points. We examined seven major hotel loyalty programs to find the best ways to save over the holidays. Here’s what we found:
- Peak season deals: At all the hotels surveyed, the award price for a room depended on hotel category, which is determined by the hotel’s location and amenities, rather than the cash price of a given room. That could translate to some good award deals at some locations, as prices rise during peak season.
- Most valuable: Hyatt Gold Passport points are worth 2.2 cents each, and Starwood Preferred Guest’s are worth 2.3 cents each when redeemed for hotel stays, according to NerdWallet calculations.
- Discounts: Marriott and the Ritz-Carlton have PointSavers programs that can save you 33%.
- Redemptions to avoid: Hyatt, Marriott and IHG offer poor redemption values for transferring points to airlines. Starwood Preferred Guest, by contrast, offers several 1:1 airline transfer partners.
- Good to know: Most hotel-branded cards offer automatic elite status, which provides benefits such as free upgrades, late checkouts and free Wi-Fi.
Keep in mind that the hotel loyalty landscape is due for some major changes. Marriott recently announced plans to acquire Starwood Hotels and Resorts, which could change the value of Starwood’s points, now worth 2.3 cents each when redeemed for hotel stays. For loyal Starwood Preferred Guest members, this could be either good news or bad news, depending on how the merger goes.
Hotel loyalty programs, compared
|Average value per point||How the program works||Best strategy||Avoid redeeming for:|
|Club Carlson||0.4 cents||Points price depends on hotel category||Use points on hotels with rooms that are expensive relative to others in the same category.||N/A|
|Hilton HHonors||0.5 cents||Points price depends on hotel category||Use points on hotels with rooms that are expensive relative to others in the same category.||Points & Money
Why: You’ll generally get less than 0.5 cents per point this way.
|Hyatt Gold Passport||2.2 cents||Points price depends on hotel category||Use points on hotels with rooms that are expensive relative to others in the same category.||Airline transfers and miscellaneous hotel costs
Why: It tanks the value of your points, sometimes by more than 75%.
|IHG Rewards Club||0.7 cents||Points price depends on hotel category||Use points on hotels with rooms that are expensive relative to others in the same category.||Airline transfers and flights
Why: It reduces the value of your points by upward of 30%.
|Marriott Rewards||1.0 cents||Points price depends on hotel category||Use Marriott’s PointSavers program to save up to 33%.||Air + Car packages and CruisesOnly
Why: NerdWallet estimates you’ll get about 0.4 cents per point on these redemptions.
|The Ritz-Carlton Rewards||0.9 cents||Points price depends on hotel category||Use the Ritz-Carlton’s PointSavers program to save up to 33%.||Abercrombie & Kent travel certificates
Why: Your points are worth only 0.45 cents each on this redemption.
|Starwood Preferred Guest||2.3 cents||Points price depends on hotel category||Use points on hotels with rooms that are expensive relative to others in the same category, transfer to 1:1 partners or use Cash & Points.||Rental car certificates for Avis and SIXT
Why: NerdWallet calculates that your points are worth only 1.43 cents each on these redemptions.
Credit card travel rewards
General travel credit cards offer much more redemption flexibility than “co-branded” cards — those that bear the name of a specific airline or hotel group. NerdWallet surveyed the travel rewards programs of eight issuers to find out which ones offered the most value during the holidays. Here’s what we found:
- Peak season deals: You can redeem Barclaycard Arrival Miles, Capital One No Hassle Miles and Discover it Miles for travel statement credit at a value of 1 cent each, a decent value. These flexible redemption options are ideal for someone traveling on a budget during peak season. With travel statement credit, you charge travel expenses like normal, then redeem your rewards to reduce or eliminate the charge on your credit card bill. You don’t have to worry about the availability of award seats or rooms, and there are no “blackout dates.”
- Most valuable: U.S. Bank FlexPoints, worth 2 cents apiece according to NerdWallet calculations, were the most valuable general travel rewards.
- Discounts: While you can redeem Chase Ultimate Rewards points, U.S. Bank FlexPoints and Wells Fargo Points for cash back at a value of 1 cent each, you’ll get more value by booking travel on their travel aggregator sites. Chase gives you a 20% discount on travel booked through its rewards site, for example.
- Redemptions to avoid: American Express Membership Rewards and Citi ThankYou give you less than 1 cent per point when you redeem for statement credit.
- Good to know: American Express, Chase Ultimate Rewards and Citi ThankYou Points offer 1:1 transfer partners.
These versatile cards continue to vie for travelers’ attention by offering increasingly competitive benefits. The Chase Sapphire Preferred® Card, for instance, recently started offering a larger sign-up bonus: Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®. That’s worth $625 when redeemed for travel booked through Chase’s Ultimate Rewards site.
Considering that the average price for a discounted round-trip airline ticket during the holiday season is $186 this year, according to a study by AAA, this bonus could potentially cover holiday travel costs for a family of three.
Credit card travel rewards programs, compared
|Average Value per point or mile||How the program works||Best strategy||Avoid redeeming for:|
|American Express Membership Rewards||1.0 cents||Points price depends on dollar price||Book travel through American Express and look for the lowest rates.||Everyday charges
Why: Points are worth only 0.6 cents each when redeemed for statement credit.
|Barclaycard Arrival Miles||1.0 cents||Miles price depends on dollar price. Whether you redeem for travel statement credit or cash back, you’ll get 5% of your miles back to use for your next redemption.||Book the lowest-cost trip, then redeem for travel statement credit.||Cash back statement credit
Why: Miles are only worth 0.5 cents each when redeemed for cash back.
|Capital One No Hassle Miles||1.0 cents||Miles price depends on dollar price. Book online through Capital One, or redeem for travel statement credit using Purchase Eraser.||Book the lowest-cost trip you can find, either through Capital One’s platform or on another site.||Cash back check or statement credit
Why: You’ll only get only 0.5 cents for each mile when you redeem for cash back.
|Chase Ultimate Rewards||1.25 cents||Points price depends on dollar price. Also redeemable for cash back.||Book through Chase Ultimate Rewards if you want to get 1.25 cent per point, instead of 1 cent per point for cash back. Transfer points to one of Chase’s 1:1 partners, if you can get a better return elsewhere.||N/A|
|Citi ThankYou Points||1.0 cents||Points price depends on dollar price. Also redeemable for cash back.||Book travel through Citi’s Travel Center. If you have the Citi Premier℠ Card, you’ll get 25% more value if you redeem this way.||Cash back or statement credit
Why: You’ll get only 0.5 cents per point.
|Discover it Miles||1.0 cents||Miles price depends on dollar price. Redeemable for travel statement credit.||Book inexpensive travel and redeem your miles against your travel costs.||N/A|
|U.S. Bank FlexPoints||2.0 cents||Points price depends on dollar price category. Also redeemable for cash back.||Look at U.S. Bank’s airfare chart before booking. If your ticket’s price is between two categories, try to get the one with the lower point price.||Round-trip flights under $200
Why: The minimum cost for round-trip tickets is 20,000 points, regardless of dollar price.
|Wells Fargo Points||1.0 cents||Points price depends on dollar price. Book through Wells Fargo or redeem for statement credit.||Redeem for travel through Wells Fargo’s site. You can get around 2 cents of value per point.||Digital downloads, including music, games and ebooks
Why: You’ll only get 0.5 cents per point.
Redeeming your credit card rewards is just one way you can save on holiday travel. If you want to trim your costs even more, set budgets for each meal you eat while you’re away from home; instead of renting a car, take public transportation; or trade an expensive hotel stay for a night on your parents’ foldout couch. And be sure to take advantage of your credit card’s free travel benefits.
Traveling during the busiest time of the year can be expensive, but with some skillful credit card reward redemptions and careful spending, it doesn’t have to drain your savings.
Image via iStock.