Miles Or Cash: What’s The Best Way To Pay For An Airline Ticket

You have an upcoming trip and a stash of miles, maybe an airline voucher or two and a desire to jet off to someplace exotic. But how should you book your ticket? Should you use your miles? Should you redeem your voucher? Should you use cash?

With most airlines offering free changes on most airfares, frequent flyer programs changing the rules for award redeposits, the introduction of dynamic pricing across most U.S. domestic frequent flyer programs and the myriad of fare sales and promotions, it can feel overwhelming to suss out when to book with which currency. This guide can help you make the call.

When To Pay With Cash

You Have a Travel Credit or Voucher

While not technically “cash,” if you have canceled a ticket that you paid for with cash, or volunteered to take a later flight on an oversold flight, you may be in possession of a travel credit or voucher.

Unlike airline gift cards, travel credits and vouchers usually have an expiration date, so it can make sense to use them before dipping into your miles. Most airline programs either have no mileage expiration date or have ways that you can easily extend your miles’ validity, whereas expiration dates of travel credits usually cannot be extended.

You Find a Sale Fare or Mistake Airfare

Airlines frequently run airfare sales, web specials and other promotions that can drop the price of cash tickets substantially. Sometimes airlines misprice airfares accidentally, resulting in a short-term opportunity for a great deal on a ticket. Even in the frequent flyer programs with dynamic pricing, these mistake fares usually do not translate into lower award ticket prices. If you find a great cash price to a destination you have in mind, but there’s no corresponding low award price, book the ticket in cash.

Your Trip Is a Business Expense

If you are flying for business and plan to deduct your travel costs on your business taxes, it might make sense to pay for your ticket in cash. While there may be a way to eke out a tax advantage from using an award ticket for business travel, it is almost certainly more advantageous to simply book your business travel using cash. As always, consult with your tax advisor about the deductibility of your travel for business.

You’re Pushing for Airline Status

If you are striving to achieve frequent flyer status with your preferred airline, you might want to consider purchasing tickets using cash. Though there are some exceptions, such as Delta Air Lines awarding Medallion Qualifying Miles for award travel in 2022, usually award travel does not credit toward frequent flyer elite status. If you are trying to earn those qualifying miles, segments or dollars, you’ll usually have to pay cash for the ticket.

When To Pay With Miles

You Require Flexibility

If you are not quite sure that you are going to take a trip, or if you want a backup plan, using miles can be a great way to secure a no-cost option on an airline ticket. While most airlines are now offering free changes to most non-basic-economy tickets, they won’t refund you. Instead, they’ll offer a travel credit, usually valid for only a year from when you originally booked your flight. In contrast, many tickets booked with frequent flyer miles can be canceled with miles redeposited back into your account.

Southwest Airlines used to be one of the only airlines to allow award cancellations and mileage redeposits until shortly before departure, but recently many of the major airlines in the U.S. have gotten on board with this policy. Previously only available to SkyMiles members with Platinum and higher status, Delta Air Lines now allows changes to award tickets, with the exception of basic economy awards, at any time prior to departure. American Airlines also allows you to cancel your award ticket and redeposit miles, even on its web special awards.

Award Travel Sales

Many airlines run airfare sales specific to their award travel fares. Delta is known for its frequent unannounced flash sales, sometimes discounting cross-country travel to as low as 7,500 SkyMiles each way. Air France/KLM offers holders of Flying Blue miles frequent discounts on award tickets through its monthly promo rewards. These award travel sales are some of the most accessible ways to get incredible value out of your miles if you are able to plan travel to destinations that are on sale.

When It Depends

Price Fluctuations

Even with airline mileage programs that price awards dynamically, prices are frequently not tied to the exact price of a ticket. This imprecision can occur solely based on the amount of taxes and fees. For instance, Southwest awards may float within a range of prices based on the cash price of the ticket, but another airline program may have fixed-price awards for certain partner carriers.

The best way to make this call is to understand what types of mileage valuations are typical for booking the type of ticket you want to book. If the price of the flight you want is relatively cheap in terms of miles, book it with miles. If it is relatively expensive in terms of miles, book it with cash.

Routing and Availability

Sometimes you find flights to the destination you want at a great price, but the great price is only available on a red-eye flight or on a flight requiring a connection when a non-stop option exists. In these situations, it can make sense to check both cash and award prices. You might decide it’s worth using cash to get the most convenient routing.

You Need To Keep Your Miles Alive

Many airlines claim that your miles will never expire and most that allow miles to expire paused mileage expiration in 2020 and 2021. But some airlines are now allowing miles to expire again. For example, American Airlines AAdvantage temporarily paused mileage expiration but now requires you to redeem or earn miles every 24 months in order to prevent expiration. Notoriously, Avianca LifeMiles expire after just 12 months of inactivity. Depending on the specific terms of your frequent flyer program, it might make sense to book your tickets with cash or miles, depending on the type of activity you need to keep your stash of miles alive.

Bottom Line

Many factors can play a role in deciding whether it is most advantageous to book with cash or points, including your need for flexibility, relative prices of tickets or even the accounting needs of your business. By developing a basic understanding of how airlines price awards, what flexibility is offered by cash and award tickets and checking prices when you book, you can book the way that is best for you.