As I’ve discussed previously in my Points & Miles 101 series, there are several different types of points & miles and not all points & miles are created equally. The general consensus was that flexible points (like Chase Ultimate Rewards, American Express Membership Rewards etc.) are the most valuable due to the many different ways they could be redeemed. The following example below shows how American Express Membership Rewards points can be quite useful but you need to use them the right way to get the most value out of them.
Last week a friend of mine was trying to book roundtrip tickets from NYC to Boston and was ready to spend either $154 or 15,400 American Express Membership Rewards points if she redeemed them through Amex Travel. Thankfully she talked to me first because generally redeeming points at 1 mile for $.01 cost ratio (a $500 flight cost 50,000 points for example) through Amex Travel is NOT a good way to spend your hard-earned points. The great value of flexible miles or points lies within the ability to transfer these points to different airlines or hotels. By knowing which airline partner to transfer the points to, you will usually save miles compared to using them via Amex Travel. In this scenario here, the best option for my friend was to transfer her points to her British Airways Avios account.
You might be thinking why the heck would she transfer points to British Airways when all she wants to do is fly a simple US domestic flight!? The first reason is British Airways is a one world alliance partner with American Airlines and US Airways who both fly routes from NY to Boston and you can redeem British Airways miles for flights on their partners, like AA or US Airways. The second reason has to do the with the British Airways award chart which is based on the actual distance of the flight flown instead of a fixed amount like most other programs. As you can see in the chart below, flights under 650 miles are only 4,500 miles each way or 9,000 miles roundtrip! American Airlines, Delta, United and US Airways (the legacy carriers) would all charge 20,000 or 25,000 miles roundtrip for the same NYC to Boston flight. What a rip-off!
Once my friend told me about her plans, I knew British Airways Avios was the right type of miles for this trip as LGA to BOS was only 184 miles in distance but she didn’t even have any Avios nor did she even have an Avios account setup (she must have missed this post where I advised to signup for all airline and hotel loyalty accounts). However, she did have a healthy balance of Amex Membership Points and they transfer instantly to British Airways Avios. She set up a British Airways account and once she confirmed there was availability for the flights she wanted, I instructed her to transfer the 9,000 Amex MR points to her Avios account and ten minutes later, her flights was booked. For a weekend in Boston she spent 9,000 miles and $11.20 in taxes.
With US Airways flying the hourly shuttle between LGA and BOS, there was a ton of availability and she had the pick of the litter when it came to flight times. Her value per mile was 1.7 cents ($154 cost of flight if paid cash /9,000 miles used), so much better than redeeming for 1 cent via Amex Travel like she almost did. For a domestic redemption that was quite good value and one that everyone should keep in mind for shorter, direct flights.