Should You Pay Cash or Use Miles?

Not everyone can earn a significant number of frequent flyer miles quickly, so once you do have enough for an award, you treat those miles like gold. After all, they are a precious commodity that can help take you all over the world, but sometimes you just need to get home to see grandma. When should you pay cash for your airline tickets and when should you use miles? Here’s some advice.

Use Cash When You’re Chasing Elite Status

If you are trying to earn status with an airline, you’ll need to have a plan to buy enough tickets with cash to reach the level you’re shooting for. If you are chasing status, buying flights makes the most sense. Switch to mile redemptions once you’ve hit elite status for the year.

Use Miles to Book Premium Class Awards

If you plan to book a fight in business or first class, it can make more financial sense to use miles instead of cash. Of course, if there’s some insane deal offering a round-trip first class ticket to Hawaii for $300, then grab it immediately. Otherwise, think about using your miles.

For example, say you want to travel from New York’s JFK to the island of Bali in Indonesia for your honeymoon. It’s a special occasion and you really want to treat your spouse to a first-class experience. You could buy tickets in first class on a Cathay Pacific flight. Cathay is known for excellent service, a fantastic and comfortable first-class cabin, and gourmet cuisine paired with fine wine and champagne.

Two tickets would cost you approximately $20,000. Most of us would never dream of spending that kind of money on transportation, but if you use your miles you can get that topnotch experience without going broke. It costs 135,000 American Airlines AAdvantage miles to redeem one first-class round-trip ticket on Cathay Pacific from the United States to Bali.

Use Miles When You Just Can’t Afford to Pay Cash No Matter What the Price of the Ticket

Miles are currency, just like the U.S. dollar. Sometimes you’ll have more money in your checkbook than miles in your frequent flyer account. Other times, you’ll be flush with miles and low on cash.

While everyone works hard to get the best value for their hard-earned miles, spending them should not be a contest. If you need to get from Miami to Duluth for a friend’s wedding and you really can’t afford (or don’t want) to pay cash, go ahead and use your miles.

The important thing is that you use your miles not that you get the absolute best value for each and every redemption you make. If using miles to secure a plane ticket will make your life easier and won’t put a drain on your finances, go ahead and do it. Don’t feel bad about it.

Use Miles for Expensive Last-Minute Flights

When there’s a family  emergency if someone is ill or a grandparent just passed away and you need to get to the funeral you’ll be relieved that you have miles. Last-minute flights can be exorbitantly expensive.

Round-trip tickets from New York to Cincinnati bought one day in advance of travel can run over $1,000. If you’re a family of four needing to make the trip ASAP, that’s over $4,000 you’d be out of pocket. Instead, you could use miles and keep more that cash in your savings account.

Every last-minute flight situation is different and depends on your departure and arrival gateways as well as the time of year you’re traveling. Always compare cash prices with reward options and decide what makes the most sense for you.

When It’s a Toss Up

Sometimes, it’s hard to determine if it makes more sense to use miles or pay cash. That generally happens when you price out a ticket and it’s kind of expensive but not so expensive that you can’t afford the flight. If you’re on the fence, it might come down to your finances and how many miles are sitting in your frequent flyer account.

There are no perfect rules when it comes to deciding whether to pay cash or use miles for an airline ticket. Compare your options and then make the decision that’s right for you.