Strategy to Spending Points
TL;DR When is using miles/points a "good deal?" Do the math to make sure your redemptions exceed your Cost Per Mile valuations.
Quantas First Class Lounge, Sydney. Image: Calistemon
So you've earned your points, and yes, we have a great pricing engine that can find interesting redemptions, but when are they good deals?
To Redeem or Not to Redeem
If your only goal is spend as little money as possible: then use your points. For everyone else, it's more complicated.
If your goal is to maximize travel: be selective and think about your rate of return. Spending 10,000 miles to redeem a ticket that has a cash value of $100 gives you a rate of return of 1 cent per mile (CPM). Spending the same 10,000 miles for a different ticket worth $300 gives you a return of 3 CPM.
The point is—set a minimum value threshold and make sure your redemptions exceed it. For some, a 2 CPM is "good enough". Others want 5-10 CPM (more difficult because it is generally limited to premium cabin or expensive last-minute flights). There is no magic number—it's something you'll adjust as you go.
Like the vast majority of flyers, your pool of miles and points is finite. Therefore, pick and choose the right opportunites to use points. If we used all our points to book the $100 flight, we wouldn't any left to spend on the $300 ticket!
Why Buy Tickets (Sometimes) Makes Sense
Sometimes you just won't be able to find a redemption that achieves your notion idea of "good value." That's fine—there's no shame in purchasing tickets with cash!
Pay-with-points cards really come in handy here, because they allow you to pay down cash tickets with points. This means you can still also earn points with the airline!
Why Buying Tickets Doesn't Makes Sense
On the flip side, don't go hoarding your points for years. Points expire and airlines regularly devaluate their programs. Find your own happy medium.