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The Best Way to Redeem Miles

Disclaimer

When it comes to the world of “Travel Hacking” most hackers agree on the best way to redeem miles. Typically, my views are consistent with the general crowd of other “hackers”. I have a tendency to agree with most of the thing the community deems advantageous, and similarly agree with what they deem taboo.

Excluding this one, enormous, topic. 

Redeeming frequent flier miles for Business/First Class vs. redeeming miles for Economy. I choose to fly Economy. Most of the others choose the fly Business/First Class.

It’s not because I don’t understand the opposing arguments. I do. They makes complete sense. It just comes down to a matter of personal preference, and my preference is to fly economy. Why?

This isn’t some sort of competition. Nor is it an us vs. them situation. I am merely clarifying that my opinion is an extremely unpopular one. Extremely. But I stand by it.

Intro

This is a page of NomadsNation Official Guide on Hacking Flights with miles (if you want to know how to get cheap flights without miles, do so here.)

NomadsNation is a resource that teaches the world and lifestyle of the Modern Traveler, and how to obtain it. The Modern Travelers’ goal is to travel on a budget, and as efficiently as possible. The efficiency of our planning, spending and ultimate choice of lifestyle, directly impacts our ability to travel and how long we are able to travel. The Modern Traveler is not always looking for the cheapest way out, but we recognize that seeking more economical traveling alternatives gives us the opportunity to save more money, and therefore travel longer. And for me, my greatest goal is always traveling longer.

Value

Value is a word that gets tossed around a lot, and somewhere along the line, it’s meaning seems to get perverted, or at least blurry. Value can refer to something financially, ethically, and everything in between. The pros and cons of redeeming your miles for business or economy are better understood by applying our personal definition of value, and what it is we value, not only from our miles, but in our lives and in our travels.

To get less existential and more to the damn point, for me personally, it is much more valuable for me and my travels to use less miles for more flights, as opposed to more miles for less flights.

Business/First Class (The Pros and Cons)

Don’t get me wrong. I would absolutely adore to fly in the front of the plane. I want as much as anyone to get priority boarding, be able to kick my legs out, enjoy complimentary champagne, and sleep in an actual bed. It is truly an unparalleled experience, particularly on long-haul international flights.

In terms of bang-for-your-buck-value, the best way to redeem miles is for Business/First Class flights. I t absolutely destroys economy. Not even a competition. If you are looking for a way to get the most financial value out of an experience, using miles to book a seat in the front of the plane is the absolute way to go. Let me explain.

This is looking at an award flight from New York to Los Angeles via United (lesson learned – still my favorite!). We have two options, to fly in Economy for the cost of 12,500 miles, or First Class for the cost of 25,000 miles. To make the best decision possible, we need to understand many things, one of the most important is finding the cash cost of each flight, to properly understand the value we are getting.

On the next page of the site (shown above), we can see the cash cost of either flight, and therefore assess the value of our miles by using simple math. The economy flight will cost us either 12,500 miles or $200.10. The First/Business flight will cost us either 25,000 miles or $889.11.

If we divide the cash cost of the flight by the mileage cost of the flight, the sum will be the worth of the redemption of our miles.

So, the economy flight costs $200.10 cash, or 12,500 miles. 200/12,500 = .016. So basically, by using our miles for this economy flight we are getting the value of 1.6 cent per mile. It’s acceptable, but not a great value.

Now, the First Class flight costs 25,000 miles, or $889. 889/25,000 = .03556. So, by redeeming our miles for First Class we are getting the value of 3.5 cents per mile. Exponentially more valuable. Let’s go deeper.

Now, again on United, we are looking at a long-haul international one way flight from Chicago to Tokyo (makes me crave sushi – check out #20). As opposed to the domestic flight (EWR-LAX) that offered two types of fares, there are three types of fares for this flight. Economy for 35,000 miles, Business/First (Two Cabin) for 75,000 miles, and First Class (Three Cabin) for 110,000 miles.

Let’s do math.

The Economy fare is $1,295 (for a one way!) or 35,000 miles. 1,295/35,000 = .037 = 3.7 cents per mile.

The Business (Two Cabin) costs $4,669 or 75,000 miles. 4,669/75,000 = .062 = 6.2 cents per mile.

The First Class (Three Cabin) costs $12,183 or 110,000 miles. 12,183/110,000 = .11 = 11 cents per mile. 

Economy – 3.7 cents per mile (Good value)

Business – 6.2 cents per mile (Great value)

First Class – 11 cents per mile (Incredible value)

So, financially speaking, if you are a bargain shopper, and are looking to get the utmost bang for your buck for miles, look no further. Redeeming your miles for Business or First Class tickets enables you to spend miles on flights that most people would never be able to afford. In terms of financial value, this is absolutely as good as it gets.

Flying Business or First Class (especially internationally) is a dream for some people, and miles enable you to achieve it for nearly free. By opening a couple of credit cards and responsibly hitting the signup bonus, you can easily get a $12,000 First Class flight to Japan for next to nothing. It’s incredible when you think about it.

But

I still never redeem miles for Business of First Class. Ever. It’s not because I don’t value my miles. It’s not because I don’t care about bang for my buck. I do. It’s about basic principles, and this type of travel does not suit me or my lifestyle.

 

My lifestyle is about traveling as long and frequently as possible. It is not about traveling as comfortably and luxuriously as possible.

I recommend redeeming your miles for Business or First Class if you do not travel frequently. If you have a vacation or two a year, using your miles for the most expensive flights makes the most sense, and I highly encourage it.

But a lot of readers on NomadsNation aren’t seeking luxury travel. They are seeking perpetual travel.Which is why I think the best way to redeem miles is in economy.

Value for the Modern Traveler

Economy. It’s annoying. It’s less comfortable.  God, sometimes it’s downright awful. Sometimes we feel less like a human beings and more like a herd of cattle. But, it enables us to travel longer.

For an example, let’s say you are new to Travel Hacking. In twelve months you open three credit cards with Chase and accumulate 110,000 points/miles. This is more than possible. I am living proof. Within a year I opened a Chase Sapphire Preferred (40,000 miles bonus) Chase United (50,000 bonus miles) and Chase Freedom (20,000 bonus points). These are only three of a dozen cards I opened in my first year, but let’s just stick to the three for now. Back to Japan.

Now, you can spend all 110,000 of your miles and have the best 13 hour flight of your life. It will be like heaven in an airplane.

Then, at 1:45 pm, you’ll land in Tokyo and have exactly 0 miles left.

0.

0.

Let’s say instead of spending 110,000 miles on a one way to Tokyo, we spend 35,000 miles. It will not be quite the heavenly experience first class would have been, but you’ll get there just fine.

Then, at 1:45, you’ll land in Tokyo, and have exactly 75,000 miles left.

75,000.

75,000.

This is why I use my miles for economy. Although points and miles can be obtained easily, they are not inexhaustible. There are only a certain amount of miles each person can obtain, especially in shorter amounts of time. Now, it is 1:45 pm and we are in Japan. The flight is over. Whatever comforts would have been given to us in first class are gone. And in the moment, we have 75,000 miles to still travel freely with!

As mentioned over and over, the secret to finding the value in miles lies within your preferred lifestyle. If you have two weeks to go on the vacation of a lifetime to Japan and want to use your miles for first class, please do so. But if your goal is to travel more and for longer periods of time, consider this.

We fly into Japan from Chicago in Economy.

110,000 miles we started with – 35,000 for ticket to Tokyo = 75,000 miles left

The Modern Traveler is looking to save money to be able to travel more. Above is a flight from Tokyo to New Delhi, for 35,00 miles.

75,000 – 35,000 = 40,000 miles left

Above is a flight from New Delhi to Istanbul (Turkey reppin #2) for 25,000 miles.

40,000 miles – 25,000 miles = 15,000 miles left

Finally, we end with a flight from Istanbul to Reykjavik, Iceland. We can fly anywhere within Europe on United for 15,000 miles, both of which Turkey and Iceland are a part of… Miles are awesome.

15,000 miles – 15,000 miles = 0 miles left

In Conclusion

It’s pretty simple. For this example with 110,000 United miles, you have two possible itineraries, both with their set of pros and cons.

  1. You can fly from Chicago to Japan in First Class. It will be the greatest and most luxurious plane ride of your entire life, and in terms of value, will leave you utterly speechless. But then, your miles are gone.
  2. You can fly Chicago-> Tokyo-> New Delhi-> Istanbul -> Reykjavik. All of the flights will be on economy and will probably suck. But, I mean… did you look at the itinerary?

There it is. This is only one example, and only a fraction of the possibilities of what you can do with your miles.

 

Which do you prefer? Ultimate financial value? Luxury? Longer travel? Better travel? Isolating your personal desires is the best way to figure out the best way to redeem your miles.  

The trick is to be honest with yourself, and understand that both decisions have their ups and downs. But if you truly evaluate the wants and needs of your personal lifestyle, you’ll ultimately make the right decision. This is why, for me, for now, the best way to redeem miles, is in economy.

Give it to me. Economy or not? Comment below!

Written by Aaron Radcliffe

City dweller. Dumpling crusher. Aaron is a serial entrepreneur, and the founder of Nomads Nation. Connect with Aaron Radcliffe -
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Chris
Chris
4 years ago

Your screenshots above. What site are they from?