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It answers the age-old question: points or cash?

Christopher Tkaczyk
April 11, 2017

NerdWallet has released a study of travel rewards credit cards and the loyalty programs for four U.S. airlines — American, Delta, Southwest, and United — that determines how consumers should best use their points and frequent flier miles.

It booked sample flights on the 20 most popular routes during the upcoming summer travel seasons to see if consumers would get better value by using their points or by paying for their ticket using a credit card or cash.

The study found that point values will differ depending on the distance flown, the fare class, whether the flight is domestic or international, or one-way vs. round trip. Here are three key takeaways:

If you’re flying domestically this summer, you’ll get the best value by choosing economy class.

Points were worth an average of 1.03 to 1.08 cents apiece on such round trips, more than the average for all economy flights.

In business and first class, longer flights provide a better point value than shorter ones.

For business- or first-class flights under 1,000 miles, points averaged 0.72 cent in value; for flights over 1,000 miles, it was 1.13 cents per point. So if you’re planning a short flight in business class, you’re better off using cash. The difference in value between business- or first-class flights under 1,000 miles and those over 1,000 miles was 10 times as big as the difference for economy flights.

If you’re buying a one-way ticket, use points, especially on international flights.

Almost two-thirds (62 percent) of one-way flights offer better point values than round-trip flights. One-way flights are often more expensive on a per-mile basis than round-trip, but they don’t require extra points. That means you could get the greater flexibility of one-way tickets for the lower price of a round trip.

“Many people automatically book round-trip fares for vacations, but if you aren’t sure about your itinerary and you’re using points, you should absolutely consider booking a one-way ticket,” said Sean McQuay, NerdWallet’s credit card and banking expert. “The trip will likely cost the same number of points overall. But you’ll have flexibility, allowing you to go home earlier or later than you planned, or continue your adventure in another city or country.”

You can also do the math at home. Just calculate the value of your points for the flights you’re watching.

Related: How to Earn Miles After Your Flight

“Take the price of the ticket and divide it by the points required for the trip to get the value of each point. For even greater accuracy, take into account the special tax on airline tickets often referred to as the 9/11 security fee,” McQuay said. “These fees are rolled into cash prices, but when you use points you have to pay them separately. As a simple rule of thumb, if the value of each point is less than 1 cent, use cash and keep your points for a higher-value opportunity.”

NerdWallet also points out that some frequent flier programs award points don't expire, while other programs require members to keep an active account, either by flying or accruing points through any of its partner programs.

The bottom line? If your points are on the verge of expiring, use them now, regardless of their value. The longer you hold onto them, the less value they will have.

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