All rewards programs are different, but there is one thing that is almost universal and applies to pretty much all programs: never use your points for anything other than travel! The value is almost always lower, it’s a terrible idea.
A lot of people make the mistake because they just don’t know, but now everyone should know it because it’s important.
Here are 3 examples of why you should never use your points for anything other than travel.
Overview of reward redemptions
Here are the basics to know:
- A program’s points usually have a different value
- Depending on how you use them
- Travel redemptions are almost always worth more
- There are rare exceptions where it’s equal
- Other redemptions can be worth just half as much (or worse)
- You throw half of the value in the garbage
- Programs always promote other redemptions more
- Of course: it’s half the cost to them!
- Other redemptions exist just for those who don’t like to travel
- Yes, these people exist
- You are not one of them if you are here
- So don’t do it
Basics of points redemptions
Half the value, that’s not insignificant! You would have enough points to travel 4 times in a year, but you’re going to travel just 2 times for the same price because you’re using your points wrong…
By using them for travel, rewards give you so much more value! With very few exceptions (where the value of points is the same for travel as for everything else; never less).
If you use travel rewards for anything other than travel, it’s sometimes even worse than earning cash back! And cash back is absolutely terrible value, so that’s bad.
That’s how rewards work!
All rewards programs promote all non-travel redemptions very actively. Of course, they’re laughing their butts off when people use those: it’s so much cheaper for the programs! Because you get so much less value.
Many readers often ask for concrete examples, so I’m going to give you 3 to make sure you understand that you should use your points for travel, no matter what type of rewards.
But first I want to share numbers about the value of each program.
Basics of point values
Rewards programs all work differently and all have different values obviously: they’re different programs.
This update includes just a taste of how to see the basic info of how each program works while you wait for our program guides.
There are programs that have points that can never be worth more, which have a fixed value for each type of use.
Non-travel redemptions often give just half the value:
- TD Rewards points (TD First Class Travel Visa Infinite Card and others)
- 0.5¢ per point for travel booked through the TD website
- 0.25¢ per point for a statement credit
- 50% less
- NBC À la carte points (National Bank World Elite Mastercard and others)
- 1¢ per point for travel booked through the À la carte website
- 0.4¢ per point for a statement credit
- 60% less
- BMO Rewards points (BMO eclipse Visa Infinite Card and others)
- 0.67¢ per point for travel booked anywhere
- 0.33¢ per point for a statement credit
- 50% less
- Scene+ points (Scotiabank Gold American Express Card and others)
- 1¢ per point for travel booked anywhere
- 0.7¢ per point for a statement credit
- 30% less
There are other programs that have points that can offer outsized value and unlimited value, meaning the value is variable for certain types of uses.
Again it’s worth half as much if you use them for anything other than travel, but it’s even worse because our Flytrippers Valuation is just a conservative estimate and the points can give you even more (so you’re wasting even more value by not using them for travel).
- Aeroplan points (TD Aeroplan Visa Infinite Card and others)
- ≈ 1.5¢ per point with the award chart
- ≈ 0.5¢ per point for merchandise
- ≈ 66% less
- American Express points (American Express Cobalt Card and others)
- ≈ 1.5¢ per point when transferring or with the award chart
- 0.7¢ per point for a PayPal credit
- ≈ 53% less
- RBC Avion Rewards points (RBC Avion Visa Infinite Card and others)
- ≈ 1.5¢ per point when transferring or with the award chart
- 0.58¢ per point for a statement credit
- ≈ 61% less
- CIBC Aventura points (CIBC Aventura Gold Visa Card and others)
- ≈ 1.2¢ per point with the award chart
- 0.63¢ per point for a statement credit
- ≈ 48% less
- HSBC Rewards points (HSBC World Elite Mastercard and others)
- ≈ 0.6¢ per point when transferring
- 0.3¢ per point for a statement credit
- ≈ 50% less
Here are the 3 examples.
Example #1: TD Rewards Points
Since the TD First Class Travel Visa Infinite Card is the best for those just starting out — it has the best welcome bonus ever in Canada for simple points applicable to almost any travel — I’ll use that for the 1st example.
You can use your points for any trip booked on their Expedia for TD website. The 165,000 points you’d get from unlocking the welcome bonus will get you $825 in free travel. Simple.
The 165,000 points will always be worth $825 (or 0.5¢ per point) for travel on the Expedia for TD website.
If you’d rather use them for any trip booked anywhere, the 165,000 points will always be worth $660 (or 0.4¢ per point) for travel booked elsewhere.
If you want to use them for something other than travel, instead of your 165,000 points being worth $825, you’ll have the equivalent of $413 as a simple statement credit, or in gift cards for example (0.25¢ per point)!
Literally half the value… so sad that travelers get fall for this.
But WOW!!! There’s a promo that gives you a $10 bonus if you do this!
Okay, now instead of getting $825 you’ll get $493 (0.3¢ per point)… 40% less value instead of 50% less value.
So another lesson I’ll remind you about: just because there’s a promotion, a sale, or a discount… it doesn’t mean the price is good at all. It’s something very important to know in the travel world.
By the way, speaking of Costco, the next update is going to have a pro tip to earn ≈ 6% on everything you buy there, including gas! A lot better than 1% or 2%.
Example #2: Aeroplan points
In short, Aeroplan points are the best airline rewards in Canada, by far. I invite you to attend our free webinar on the basics of Aeroplan.
For 36,000 Aeroplan points, you can get 6 one-way short-distance reward flights within North America. Or lots of other options. Our Flytrippers Valuation is ≈ $540, but Aeroplan points have literally unlimited value so it can be a lot more too.
In fact, it’s more than half the points required for a one-way business class flight to Europe that’s worth $3,000, so anyway, you understand that it can be worth a lot.
Well, for the same amount of points, there are plenty of people who choose… a toaster.
Obviously don’t do that.
I’d even add that if you want to maximize, don’t use points to pay taxes on flights either!
That’s travel in a sense yes, but the value is quite a bit lower than for the real travel redemption: for the part of the plane ticket price that actually goes to the airline. The program allows you to pay taxes but it gives you a lot less value when you use your points for that, just like for merchandise.
Points from all other airline or hotel chain programs should also be used for travel only!
Example #3: American Express points
American Express Membership Rewards (Amex points) are the best rewards in Canada (by far).
Amex points transfer to Aeroplan at a 1-to-1 rate, so 1000 Amex points are conservatively worth ≈ $15 (≈ 1.5¢ per point). So everything I just said about Aeroplan points applies here.
In fact, Amex points are worth even more in a sense, because having more options is always better!
And you have plenty of options with Amex points. You can transfer them to other programs too: British Airways Avios, Air France-KLM Flying Blue, Etihad Guest, Delta SkyMiles, Marriott Bonvoy, and Hilton Honors. And you can use them with the Amex award chart for flights that are expensive with cash! That can give you ≈ 2¢ per point instead of ≈ 1.5¢ there too!
So don’t waste them at the very low value of 1¢ per point (1000 points would be worth just $10) like lots of people unfortunately do.
(By the way, in the next update, I’ll share with you an incredibly striking testimonial from a Flytrippers reader that will make you realize the awesome value of Amex points and how different it can be if you avoid her mistake!)
But most importantly, don’t ever use your Amex points to get less than 1¢ per point!
This week, Amex sent out this great announcement that you will soon be able to use your points on PayPal. But 1000 points are worth $7. Less than half again.
It’s really not complicated: when rewards programs always talk about non-travel redemptions, it’s because they literally save half the cost. So you get half the value.
Want to get more content to learn how to earn free travel?
Summary
You should always use your rewards for travel redemptions. The value of the points for non-travel redemptions can be just half as much, so it’s really something to avoid if you like to travel.
What would you like to know about points redemptions? Tell us in the comments below.
See the deals we spot: Cheap flights
Explore awesome destinations: Travel inspiration
Learn pro tricks: Travel tips
Discover free travel: Travel rewards
Featured image: Cabo San Lucas (photo credit: John Cafazza)
