"What's it worth to you". This phrase comes to mind when I think of airline miles. Virtually everyone reading this has a different goal with their miles and therefore a different value. Unlike using cash, using miles does not create a fixed currency or a fixed value. To get the most out of your miles you need to understand what the airline thinks they are worth and what they can be worth to you in an ideal situation.
Airlines, credit card companies and hotels generally value miles at a fixed rate. If you have 50,000 miles they see that as a cash value of roughly $500 dollars. You do not have to accept this as fact, and in fact, you shouldn't. They might offer you $500 off an airline ticket for 50,000 miles, but in general thats a very bad deal, compared to what they can be worth..
My "expert" opinion? Don't perform "cash like" transactions with airlines, instead, look to find value in the "free flight using miles" charts that your airline offers. As I mentioned, everyone has a different need or purpose for their miles but regardless of need you can still get much better than the cash equivalent (50,000 miles = $500) if you shop around. Let's look at a good example and a bad example...
BAD Usage of Miles: I want to go from NY to Florida and the ticket costs $250. Instead I could use 50,000 miles to book a peak coach award ticket and fly for free.
Why This is BAD: You just used $500 dollars or more worth of miles (50,000) to book a $250 dollar flight. Just pay for the flight, collect the miles and use those 50,000 (or better yet half that) to book two more expensive tickets making your 50,000 miles worth more than $500 and certainly not $250!
GOOD Usage of Miles: I want to fly from New York to California, coach costs $550 and first class costs $2,000. Instead, I use my 50,000 miles which are enough for a free round trip first class flight anywhere in the United States and now I'm flying first class for free! Woohoo!
Why This is GOOD: I just unlocked 4x the value that the airline thinks my miles are worth by booking a $2,000 dollar ticket for $500 worth of miles (50,000)! In doing so I flew in a class of service I could not otherwise afford and got a great value out of my miles.
Each airline has different "sweet spots" in their award charts where exceptional value can be leveraged. As I have mentioned I love using my miles to fly first class between New York and London as well as South America. On long flights you really appreciate the extra space and amenities and its certainly not something I could afford to do out of pocket which makes it very exciting. By using my miles for these flights I generally use 100,000 miles (cash value of $1,000) for a flight that would cost $5,000 in cash. Nice!!!
If you have points with a credit card company instead of an airline this is even better! Credit card points can be converted into airline miles without locking you into a specific airline. I never fly British Airways but I often transfer my American Express points to British Airways because I can use British Airways Avios (their points) for American Airlines and US AIrways flights. British AIrways costs me less miles than if I were using US Airways or American Miles to fly US AIrways and American! Weird! Find out where you are looking to go and see who will cost you the least miles to get there and then transfer your credit card points to that airline. Easy!
In conclusion, just make sure you are never wasting miles, they can make for priceless trips.
Questions? We are happy to help you find value in your miles for free! firstname.lastname@example.org