When to use Frequent Flyer points

Calculations have been updated as at: 25/3/13.

These days it is pretty easy to earn frequent flyer points without flying a single mile. You can earn them when you do the groceries, buy petrol, pay a bill, stay at a hotel or use your credit card.

But while earning points has become easier than ever, figuring out when to redeem your points for shopping rewards or flights has become somewhat of an artform as there is no set value for points. Whether you are a Qantas Frequent Flyer, Velocity Flyer, KrisFlyer, Skywards or Mileage Plus member, there are some common do’s and don’ts when it comes time to cashing those points in.

Dos

  • Shop around for the cheapest flights. Before you decide to wipe off 96,000 points for a trip to the US using frequent flyer points, do a web search to see what the cheapest flights are for the dates you want to travel. A mozo staffer was recently quoted $840 just in taxes for a Frequent Flyer seat with Qantas to the US, where for the same dates^ you could buy a return flight on Qantas for $1298 including taxes. If points were used in this instance, the points value would be just 0.48 cents a point*. A month later, the cheapest flights were $2147 so the value of points increases to 1.36 cents per point.

Mozo Top Tip: Save your points for when you will get the most value from them not when you can pick up cheap flights.

  • Use points to upgrade. Often points to upgrade is one of the best ways to get value from your frequent flyer points. You will need to make sure that you first purchase a ticket that is eligible for an upgrade which may cost you a bit more than the cheapest flight but that extra service (and sleep) could be worth it. For example, flying Singapore Airlines from Sydney to Singapore, a business class ticket cost $4,208.58, and an upgradable economy ticket cost $1,358.58^^. A saver awards upgrade from economy to business will cost 90,000 KrisFlyer points, so the value per point to upgrade is 3.17 cents***. By contrast, the same economy awards saver ticket requires 50,000 points, which comes in at 2.71 cents a point but if you use points to buy the business class ticket (110,000 points) you get the best value overall at 3.83 cents a point.

  • Watch point expiry dates. Every airline is different but generally there are two type of expiry dates to watch out for: last date of activity and timed from when the points were credited to your account. 18 months and 3 years seem to be the most common expiry terms – check out this article on news.com.au for details on all airline program expiry dates.

  • Get help when needed. David Flynn of Australian Business Traveller recommends calling in the experts when it gets tough trying to match up rewards seat availability with your planned itinerary. He suggests sites like flightfox and pointpros which can help you find the best routes to suit your balance.

Don’ts

  • Trade points for goods at rewards stores. All frequent flyer programs now have rewards stores where instead of flights you can use your points to buy goods and services. The difficulty over whether to use your points here is that like flights, not all awards in the store have the same points value. At the Velocity Frequent Flyer Store a $100 Coles Myer Gift card will cost you 14,500 points (that’s equivalent to each point having a value of 0.69 cents each). But if you want to use your points for a new membership to the Virgin Australia Lounge that will cost you 105,000 points. If bought, a new membership to the lounge is $420 so the point-value for the membership is only  0.44 cents per point.

  • Let points go to waste. If your points are about to expire and you don’t have enough to redeem a flight or reward, donate your points to a charity or transfer them to an eligible family member.

  • Forget your frequent flyer membership card. There are so many opportunities for you to earn frequent flyer points so make sure you use your card whenever and wherever you can – every point counts! And keep all your receipts as you can claim miles retroactively as long as you can prove your purchases.

Disclaimers: Prices correct as at 20 March 2013. ^Qantas.com.au: Sydney – Los Angeles May 20 – May 27, June 20 – June 27. *Value per point calculation (Flight cost – taxes / points = value per point.) ^^Singaporeair.com: Sydney – Singapore May 20 – May 27, 2013. ***Upgrade value per point (Business class ticket price – Economy class ticket price / points = value per point). Awards point value: Flight cost / points = value per point.

When to use Frequent Flyer points was last modified: April 11, 2013 by Kylie Moss

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8 Comments - Write a Comment

  1. Hello Kylie, either i am missing something here or i failed at maths, but a $2147 airfare to the US or using 96000 points plus $840 in taxes does not equate to each point worth $1.36 each, please explain.

    Reply
    1. Kylie Moss

      Hi,
      $2,147 airfare, minus 840 tax = $1,307. Divide this figure by the # of points required (96,000) and your points value comes to $1.36. Kylie

      Reply
  2. Hey Kylie,
    Thanks for the info – want to plan a family visit to Tassie to see my Dad who is poorly so had a look at flightfox and pointpros – they are both American sites, obviously only handle overseas bookings and not intrastate Australia. Do you know if they handle our Aussie points system for overseas travel as some stage we want to go to the Philippines using our Frequent Flyer rewards?
    Thank you and have a great day,
    Annie

    Reply
  3. I don’t agree, the value of the points when comparing flights should be based on the cheapest availabe not the most expensive!!! Otherwise that’s like saying wait for a sale to end before purchasing something because if you pay more it’s worth more!!! Not the case at all as the product is still the same.

    Reply
  4. Kylie, you obviously dont have a degree in mathematical equations, your whole story is flawed, if you think in your sums that a frequent flyer point is worth $1.36 then 96000 points is worth $130,560,do the math. your a few decimal points out on your calculator, the actual value in that instance is .0136 cents, why do you think they give so many of them away, ive just traded in 840,000 of them on 2 round the world first class tickets, i made the system work for me, so whats your reply Kylie.

    Reply
    1. Kylie Moss

      Hi there, clearly not a mathematical genius! We’ve now updated the calculations. However the relative values remain the same. The key is that not all points have the same value so as you advise make the system work for you. I hope you have a great trip.

      Reply
    2. Well actually Tom it is 1.36 cents, so you are out by a factor of 100. Looks like your maths isn’t too crash hot either. So what’s your reply Tom?

      Reply
  5. Ah, thats better now Kylie, we dont want to give people the impression there worth that much [ I wish], just for interest sake my 2 first class tickets around the world retail for about $45,000 with qantas, they cost me 840.000 points and $3000 in taxes, thats not a bad deal, cheers Tom.

    Reply

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