![]() ![]() Take $26.50 and divide it by 3,450, which gives you 0.77. ![]() This would save you 35.40 Canadian dollars (roughly $26.50). To go from the standard award rate to the zero-cash option, you'd use an extra 3,540 points. In both cases, you divide the extra cash by the additional points. If you are able to select any option, it's time to do some math - bearing in mind that we value Aeroplan points at 1.5 cents apiece. If you have fewer than 35,000 points in your account, you'll be forced to choose one of the options with fewer points but more cash to be able to book your flight. If you are flush with many Aeroplan points, you might wish to choose the highest mileage amount for a truly free flight. If this sounds confusing, you're definitely not alone, so let's take a look at some concrete examples to show this in action. In this case, be sure to look at paid tickets on your route, as you may find it better to just pay for the ticket outright. Your account balance may require you to fork over a cash copay. If you're short on points and miles, you may not have any choice.In this case, you're happy to redeem as many rewards as possible to keep the cash in your pocket. If you're sitting on a ton of points and miles, you may not care about suboptimal redemption values.That's because you should avoid buying miles for more than they're worth. But this time, you're looking for a value that's lower than our valuation. Use the same formula - additional cash divided by the points or miles you're saving - and compare it to TPG's valuation. In other words, you're paying to keep those miles for a future redemption - which is effectively like purchasing them. In the second situation, you're keeping miles in your account by paying more out of pocket. If that resulting value is higher than TPG's valuation for the given currency, that's a solid option for your rewards. ![]() Take your cash savings and divide it by the extra miles you're using. For this scenario, calculate the redemption value of those miles. In the first one, you're redeeming extra miles to keep cash in your pocket. Some even allow both - which can make it even more challenging to identify the option that makes the most sense. Use fewer rewards but pay a copay in cash (plus taxes and fees, which remain fixed).Use additional rewards to cover the taxes and fees.However, there are two alternative scenarios offered by some loyalty programs: You can then either book the award ticket or pay cash for the itinerary.īy signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. Most airline loyalty programs give you a single option: Redeem a fixed number of miles plus a set amount of taxes and fees for a flight. How to make this decisionįirst, let's start with a quick overview of how to approach this decision-making process. This can be handy if you have a low mileage balance and cannot book the flight at the standard redemption levels.īut when you are offered a range of payment options, which should you choose? Let's examine some examples from popular programs to crunch the numbers. They may also allow you to use even fewer miles than a standard redemption in exchange for a higher cash payment. Some loyalty programs will allow you to redeem more points and miles to cover the cost of the fees, taxes and surcharges. In other words, it's free money for the airline. While some airlines refer to it as a " fuel surcharge," which is supposed to reflect the cost of the fuel required to transport the passenger on the flight, other programs refer to it as a "carrier-imposed surcharge," as these added costs are generally independent of fuel expenses. These fees are completely discretionary, and 100% goes to the airline. Some airlines also impose their own surcharges (on both award bookings and cash tickets). Related: Quick Points: World of Hyatt members don't pay any fees or taxes on award stays The airline then passes these fees on to the passenger. Customs and Border Protection services or the U.K.'s dreaded Air Passenger Duty. Some are charged by governmental agencies or airport operators at both the origin and destination. There are many sources of these added costs. However, you may also see some additional fees, taxes and surcharges payable on top of the quoted mileage when you want to fly upfront. Booking premium-cabin flights is one of the most valuable ways to redeem your points and miles. ![]()
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