Ariana Arghandewal | (TNS) Bankrate

If I had a point for every time I got asked about the best way to use points for travel, I’d have enough to fly around the world. Twice. After a decade in this racket, I know how to stretch my points as far as possible.

Used correctly, points can be more valuable than cash. You can use them for everything from a staycation at an extended-stay hotel to a first-class trip to the Maldives. You can plan a cross-country road trip with motel pit stops or literally fly around the world. The key is to know what your points are worth and to use them wisely. As a general rule, you should aim to get at least 1 cent of value out of each point (though that won’t always be possible).

If you’ve been saving up your points and wondering how best to use them for travel, we’ve got you covered. Here’s everything you need to know about maximizing value from your points and miles.

1. Use points and miles for international business- and first-class tickets

International business- and first-class tickets typically offer the most high-value return for your points and miles. A round-trip business-class ticket to Europe typically costs between 88,000 and 140,000 points or miles, while a cash fare will typically set you back about $5,000. An economy-class ticket typically costs 60,000 miles round-trip, with cash fares often going as low as $400 during the off-peak season. Overall, you’re more likely to get a better deal on a premium cabin redemption than on a coach redemption.

International business- and first-class travel doesn’t just provide the highest redemption value for your points and miles — it’s also something most people can’t afford without points and miles. That’s really the best use of points and miles for travel — not just keeping your expenses low, but accessing travel opportunities that would otherwise be out of reach.

2. Book luxury (or all-inclusive) hotels and resorts closer to home

Luxury hotels can offer a tremendous return on your points. The Maldives, for example, is a popular destination for maximizing hotel points. Hotels in the Maldives can go well over $1,000 per night, making them a great use of hotel points and free night awards.

But one aspect that often gets overlooked is that these “free” luxury hotel stays often come with many additional expenses. Food is expensive in these remote destinations, and boat and seaplane transfers can cost over $500 per person. Unless you were planning to pay out of pocket for the room anyway, you may not save much money on this redemption.

A high-value alternative would be booking all-inclusive hotels closer to home. Hyatt, Hilton and Marriott all have all-inclusive resorts that require a reasonable amount of points (Hyatt especially). For example, there are Hyatt hotels that start at around 17,000 points per night (in the off peak season). You can easily accumulate enough points for three free nights using the welcome bonus from The World of Hyatt Credit Card* or Chase Sapphire Preferred® Card.

To elaborate, the World of Hyatt Credit Card currently offers up to 60,000 bonus points — you can earn 30,000 points after you spend $3,000 in the first three months of account opening, plus up to 30,000 more points by earning 2X points on purchases (that normally earn 1X points) during the first six months (on up to $15,000). The Chase Sapphire Preferred, on the other hand, currently offers 60,000 bonus points after you spend $4,000 in the first three months of account opening.

It’s worth noting this 17,000-point rate is for two people per room. Hyatt charges an additional 8,500 points per night (for this hotel category) for each additional person staying in the same room. The great thing about Hyatt’s all-inclusive hotels is that all meals and accommodations are included, making it possible to check out with a $0 bill. That’s not always possible at luxury resorts, where a trip to the minibar can put a serious dent in your wallet. All-inclusive hotels are ideal for budget-conscious travelers who want to enjoy themselves without going overboard.

3. For families and large groups, use hotel points for low-category extended stays

There’s more than one way to get value out of hotel points, and I’m a firm believer that extended-stay hotels can be an excellent use of points.

Extended-stay properties tend to be some of the cheapest hotels when it comes to using points, often requiring a fraction of the points needed by their luxury counterparts. Lower redemption rates don’t impact value. In fact, these affordable hotels often offer high-value perks that will improve your hotel experience.

For example, complimentary breakfast is typically standard at these types of properties. And thanks to larger beds and additional sofas, these properties can usually accommodate more than two guests per room. This makes extended-stay properties ideal for families and large groups.

4. You can still find great deals on peak travel bookings

During peak travel seasons — such as during the summer, spring break and the holidays — everything from airfare to hotel rates skyrocket. This can be a great time to utilize points and miles to keep your costs down.

It’s worth noting that an increasing number of airline and hotel loyalty programs — many of which are highlighted in Bankrate’s travel toolkit — are moving toward dynamic pricing. That means redemption rates will fluctuate based on the cost of airfare and room rates. That said, you can still put your points and miles to good use with dynamic pricing in place.

Hotel loyalty programs offer a great example of how these redemptions can work out favorably. For example, a stay at the Westin New York Grand Central over Christmas and New Year’s could cost well over $6,000. The same stay could cost about 480,000 Marriott Bonvoy points, giving you a value of 1.25 cents per point. That’s a fantastic value for a Marriott redemption.

Award pricing goes up during peak travel season, but that doesn’t mean the math won’t add up favorably. It’s always a good idea to compare these redemption rates against cash prices and figure out which option would work best.

5. For the best deals, travel during off-peak seasons and be flexible with your travel dates

While expensive peak travel bookings can increase the value of your rewards, off-peak awards can save you points and miles.

Case in point: American Airlines is one of the few major airlines that still publishes an award chart, which includes off-peak travel dates for its own awards and partner awards. You may be able to save around 20% on an award ticket by traveling during the off-season. For example, a one-way economy class fare to Europe typically costs 30,000 miles. The same award costs about 22,500 miles if you’re willing to travel during off-peak seasons.

The same goes for fare-based programs like Southwest Rapid Rewards. By searching through the airline’s low-fare calendar, you can score incredible deals on award tickets. If you can afford to be flexible with your travel dates, you can stretch your points and miles even further by using fewer rewards for off-peak travel.

6. Look for sweet-spot redemptions with different airlines and hotels

Sweet-spot awards are one of the best-kept secrets of airline and hotel loyalty programs. A “sweet spot” refers to an award that’s offered at a significantly lower price compared to most other programs. Familiarizing yourself with sweet-spot redemptions is a great way to get more travel out of a limited points or miles balance.

For example, say United MileagePlus requires around 124,000 miles for a round-trip business class ticket to Europe. Meanwhile, fellow Star Alliance carrier All Nippon Airways (ANA) might require just 88,000 miles for the same flight. ANA typically gives you a free stopover on these awards itineraries too, allowing you to book multiple trips for the cost of one.

Award tickets to Hawaii are always in demand, and even off-peak travel from the West Coast can cost 40,000 AAdvantage miles or more round-trip. However, the British Airways Executive Club often has a sweet spot for West Coast travelers, and you may be able to find flights for 13,000 Avios each way.

Air France and KLM’s joint loyalty program, Flying Blue, doesn’t get much mainstream recognition, but it’s packed with sweet spots that can save you miles and cash. For instance, you might be able to find a 106,000-mile award ticket between the U.S. and North Africa. Considering most other programs require 160,000 or more miles for the same award, that would be a fantastic deal.

One final note: If you’re interested in Flying Blue, be sure to check out its monthly Promo Rewards. These award tickets are discounted by as much as 50 percent, and they present an excellent way to stretch your rewards further.

7. Redeem rewards for good-enough value when needed

While following the above advice will ensure maximum value for your points and miles, you should use your rewards however you see fit. If redeeming Chase Ultimate Rewards points for a New Orleans ghost tour makes you happy, then go for it. If using your American AAdvantage miles for a rental car keeps cash in your pocket, do it.

While the best way to use points and miles usually involves redeeming them for international business- and first-class flights, the best way to use your own points and miles may differ. Your rewards are yours to use, so you may want to ignore what the influencers are doing and do whatever works best for you.

However, points and miles devalue over time — they may even expire after an extended period of time — so the absolute best way to redeem them is as quickly as possible, for the best value you can get. Don’t hoard them and don’t let them accumulate and devalue before you have a chance to use them.

FAQs

—What are credit card points and miles?Credit card points and miles are types of credit card rewards that you can earn for all eligible spending with your card. These types of rewards structures are usually a feature of travel credit cards.

—How do credit card points and miles work? Whenever you swipe your travel rewards credit card, you’ll earn points or miles for all eligible purchases. For example, you might earn a higher points or miles rate for select types of purchases (such as airfare, rideshares or dining) along with a fixed rate on all other purchases.

—How can you use your credit card points and miles? Many points and miles cards allow you to redeem your rewards for different types of travel, cash back, merchandise and gift cards, but redemption options will vary from card to card. Since credit card points and miles are usually a feature of travel credit cards, you’ll typically get the best value for travel-related redemption options.

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(* The information about the World of Hyatt Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.)

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