For many cardholders, these points end up going toward the purchase of vouchers, merchandise or credit. But for people planning a trip, they could potentially be used to reduce the cost of flights and hotel stays.
The catch is that not all payouts have the same value.
The bonus point does not have a universal value in rupees. What 10,000 points can buy depends largely on the credit card issuer, redemption option and, in some cases, the airline or hotel loyalty program.
How to use credit card points for travel?
An easier option is to book directly through your credit card issuer’s travel platform, if the card offers this option. Cardholders can search for flights or hotels and use accumulated points to offset part or all of the cost of the booking. Depending on the card, it may also be possible to combine points with cash.
The convenience is obvious. There’s no need to understand airline mileage programs or hunt separately for award seats. But convenience doesn’t always mean the best deal.
Before redeeming points, travelers should consider what they are actually getting in return. For example, if 10,000 points reduces the price of a ticket by ₹5000, redemption value 50 paise per point. If the same number of points can reduce another booking by ₹10,000, the value of each point has effectively doubled. Thus, the number of points in the account only tells part of the story. What matters is what those points can buy.
The second option may be more profitable, but requires more careful planning.
Some credit cards allow customers to transfer rewards points to airline frequent flyer programs or hotel loyalty programs. Points are converted into airline miles or hotel points, which can then be used to make award bookings.
This can be especially useful when cash tickets are expensive but premium seating is available. Premium international flights and expensive hotel stays are often situations where travelers can find better value through loyalty program transfers.
Check availability before transferring points
Transfers to airline and hotel loyalty programs are generally irreversible. A traveler who transfers thousands of points before confirming an award seat may end up accumulating airline miles that cannot be immediately used for a planned trip. Conversion rate also matters. One credit card point does not necessarily mean one airline mile or one hotel point.
Travelers should also be wary of calling an award booking “free.” Flights booked with miles may still include taxes, fees and other charges. The final cash amount should be compared to the cost of purchasing the ticket outright.
For a cheap domestic flight, using a lot of points may not always make financial sense. Saving those points for a more expensive trip can be a big benefit. The same principle applies to hotel stays: Compare the cash price of a room to the number of points required before assuming that redemption is automatically a good deal.
There are other details to check as well. Reward points may expire, and the transfer of airline miles and hotel points is subject to the rules of the applicable loyalty program.
Most importantly, points earned should not be a reason to spend more.
Buying things you don’t need just to earn rewards can quickly defeat the purpose, especially if the spending results in unpaid credit card balances and interest charges. The best travel rewards come from expenses that would have happened anyway.
For travelers with a growing balance of points, the first step is simple: check how much they’re worth before hitting the redeem button. Making the right reservation can pay for a significant portion of your next trip. Getting it wrong can turn thousands of points into surprisingly small amounts.