Page Contents<\/p>
- What Are Fixed-Value Points?<\/a>
- Benefits of fixed-value points<\/a><\/li>
- Drawbacks of fixed-value points<\/a><\/li><\/ul><\/li>
- Fixed-Value Points Don't Lose Their Value<\/a><\/li>
- Fixed-Value Points Are Easy To Redeem With Great Flexibility<\/a><\/li>
- Earn Frequent Flyer Miles and Elite Status Credits<\/a><\/li>
- Redeem\u00a0Fixed-Value Points for Award Fees and Taxes<\/a><\/li>
- Use Fixed-Value Points for Lodging That Isn't Part of a Rewards Program<\/a><\/li>
- When To Not Use Fixed-Value Points<\/a><\/li>
- Which Cards Earn Fixed-Value Points?<\/a><\/li>
- Final Thoughts<\/a><\/li><\/ul><\/div>\n\n
What Are Fixed-Value Points?<\/span><\/h2>\n
Fixed-value points are points or “miles” (sometimes a bit of a misnomer) with a fixed value. This may be exactly fixed or mostly fixed. I say mostly fixed since there are a handful of currencies where your points can be redeemed within a limited range of value. A great example of this is JetBlue TrueBlue<\/a> points. Other points have an exactly<\/em> fixed value (e.g., cash-back earnings, where rewards are always worth 1\u00a2 per point).<\/p>\n
The key is this: with fixed-value points, you know what your points are worth. There's almost no guesswork involved. This is very different than flexible points, which have a variety of uses with a great range of values \u2014 or airline miles where you redeem them according to an established chart.<\/p>\n
If you need a full explanation of all the different types of points and miles, you can check out this introduction to the different types of rewards points<\/a>. Within fixed-value points, there are those offered by banks on their credit cards (more on that below) and also by rewards programs — such as Accor Live Limitless<\/a> — where points are always used at a certain value to offset the cost of a hotel stay.<\/p>\n
Benefits of fixed-value points<\/span><\/h3>\n
There are a number of upsides to earning points with a fixed value, namely:<\/p>\n
- \n
- They are mostly immune to the devaluations common to frequent flyer programs.<\/li>\n
- Their programs are simple and don\u2019t require any specialized knowledge of award charts, partner redemptions, etc.<\/li>\n
- There are no blackout dates; you can redeem your points at any time.<\/li>\n
- You may still receive hotel elite status benefits and earn frequent flyer miles and earn qualification miles\/nights\/dollars when you redeem fixed-value points and miles<\/li>\n
- It's easy to know the value of your points.<\/li>\n<\/ul>\n
Drawbacks of fixed-value points<\/span><\/h3>\n
Of course, these points have their downsides as well:<\/p>\n
- \n
- Price changes can make redemptions more expensive (e.g., when cash prices are high, you have to use more points).<\/li>\n
- There is virtually no opportunity for “outsized value.”<\/li>\n<\/ul>\n
You can\u00a0always<\/em> find tradeoffs between the types of rewards you earn. Unlike with more traditional frequent flyer miles, there's no way to use fixed-value points to book an international first-class flight for a fraction of the price. You'd burn an insane<\/em> number of points if you did this, as the points cost is tied to the cash price. This is the primary downside of fixed-value points.<\/p>\n
Let's explore the pros and cons of these points in greater detail.<\/p>\n
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Credit: Pavel Danilyuk\/Pexels<\/em><\/enter><\/figure>\n Fixed-Value Points Don't Lose Their Value<\/span><\/h2>\n
Fixed-value points tend to retain their value, as they are less susceptible to rewards program devaluations. When Delta pulls one of its regular, unannounced award devaluations, the value of your SkyMiles goes down. Just a few years ago, you could book a one-way business class ticket to Europe for 70,000 SkyMiles. Now, it requires at least 170,000 SkyMiles<\/a>. That's over a 140% increase in a few years. Delta has way outpaced inflation with its devaluations.<\/p>\n
Fixed-value points, on the other hand, are simply worth their stated value when redeemed. If the value is 1\u00a2 per point (as most are), it remains at 1\u00a2 whether the award price in other programs goes up or down. Their value is tied to the cash price of the ticket. Yes, not all points are worth 1\u00a2. The U.S. Bank Altitude\u2122 Reserve Visa Infinite\u00ae<\/sup> Card<\/a> is an exception, as those points are worth 1.5\u00a2 each toward travel, but you get the point: they're a fixed value.<\/p>\n
In a market of cheap airfares and hotel prices, the Bank of America\u00ae<\/sup> Premium Rewards\u00ae<\/sup> credit card<\/a> comes into its own as a fixed-value rewards card. It allows you to purchase heavily discounted rooms, tickets, or even mistake fares and redeem the cost back as a statement credit. Even though you're paying “cash” with your card, the statement credit essentially lets you pay using your points instead.<\/p>\n
Fixed-Value Points Are Easy To Redeem With Great Flexibility<\/span><\/h2>\n
If you like simplicity, fixed-value points are for you — they don\u2019t require specialized knowledge of rewards programs, transfer partners, or award charts. You simply make the purchase on your card and apply the points as a statement credit against the travel charge. Easy peasy.<\/p>\n
The flexibility of when you can redeem points is a feature as well. One of the significant drawbacks to earning traditional points and miles is that you\u2019re handicapped by blackout dates and limited award availability. This is nearly always a problem around holidays. If your travel dates aren\u2019t flexible, or you\u2019re trying to travel around Christmas or Thanksgiving, you\u2019ll often find no award availability. Or you'll see sky-high prices for mileage programs with dynamic pricing<\/a>. Enter fixed-value points, where you can just purchase a ticket with your card and redeem the points toward a statement credit.<\/p>\n
With fixed-value points, as long as there are still seats available to purchase, you use your points to book them. You can buy them using a fixed-value points card and redeem the points against the charge. Or you can book using an airline that offers “fixed-value” airline miles (e.g., JetBlue TrueBlue, Southwest RapidRewards<\/a>, and BreezePoints<\/a>).<\/p>\n
Credit: Lukas Souza\/Unsplash<\/em><\/enter><\/figure>\n This type of point also provides a great way to take advantage of mistake fares. They're also excellent for discount airlines that aren't part of a rewards program or don't have transfer partners. You can purchase the cheapest ticket available and still redeem points against the expense.<\/p>\n
However, depending on the card or merchant, you'll run into some restrictions. With many cards, the merchant must code as a “travel” expense if you want to redeem points or miles against a charge. Moreover, depending on the redemption method, your points may be worth more or less (but still at a fixed value).<\/p>\n
For example, American Express Memberships Rewards points<\/a> are worth more toward flights and gift cards than cruises or statement credits. And many banks allow you to use points at a fixed value in their rewards portal, but how you do so might change the value proposition.<\/p>\n
Related: Why You Should Never Redeem Capital One Miles Through Capital One Travel<\/a><\/strong><\/p>\n
Earn Frequent Flyer Miles and Elite Status Credits<\/span><\/h2>\n
A key upside to using fixed-value points is that you\u2019re buying your room or ticket outright and not redeeming points or miles within a program for an award. You\u2019ll still earn points\/miles, plus elite status credits. This is a huge plus for anyone trying to attain or retain elite status. For frequent travelers, a strategy is to use award miles for your family when booking a vacation but pay for your own ticket using fixed-value points. This ensures you keep earning credit toward elite status.<\/p>\n
You also should factor in the miles you\u2019ll earn when paying cash for a ticket. These considerations will help you decide which currency to use. In some cases, the number of miles you earn from a ticket is substantial, especially for premium economy or business class deals.<\/p>\n
With fixed-value points, you can still earn elite airline and hotel credit if you pay with your card and reimburse yourself, but be careful when booking hotels through travel portals. Credit: Lufthansa<\/em><\/enter><\/figure>\n Let's walk through this methodology in case it seems confusing. You're using points, right? You can redeem said points using a bank's travel portal. Whether it's a hotel night or a flight, redeeming points directly counts as “buying” the ticket. Fixed-value points are like using transferable points through a travel portal in that the ticket you buy is treated as if you bought it with cash (and in the case where you have to redeem as a statement credit, you did buy it with cash). The only difference is that transferable points have other redemption options.<\/p>\n
Remember, when redeeming points through a travel portal, you'll earn miles and status qualification for flights here but not<\/strong> with hotels. Hotels require you to book directly to earn stay credits toward elite status. In this regard, you're better off paying the hotel directly, using your credit card, and then reimbursing yourself with points afterward.<\/p>\n
Redeem\u00a0Fixed-Value Points for Award Fees and Taxes<\/span><\/h2>\n
Redeeming fixed-value points or miles for award fees and taxes is a great way to further reduce the cost of award travel. Carrier-imposed fees<\/a> and taxes can run into hundreds of dollars per ticket. Sometimes, it's worth paying them<\/a> \u2014 usually when you can save a massive number of miles. The ability to wipe those charges out with points is a huge money-saver.<\/p>\n
Just make sure you use a card that offers solid travel insurance protections<\/a>.<\/p>\n
Use Fixed-Value Points for Lodging That Isn't Part of a Rewards Program<\/span><\/h2>\n
Airbnb is a useful alternative to chain hotels<\/a> when availability is slim, or there is little coverage in that area. Unfortunately, Airbnb doesn\u2019t have a rewards program. Unlike Hilton<\/a> or Marriott<\/a>, you can\u2019t redeem points for your stays. However, you can redeem fixed-value points against the expense of vacation rentals like Airbnb and VRBO that don\u2019t fall under the umbrella of a rewards program. Just be sure to pick up a few SkyMiles<\/a> or earn British Airways Avios when you book with Airbnb<\/a>.<\/p>\n
The same can be said about boutique hotels that don't participate in rewards programs. Since the elite status\/rewards programs questions aren't an issue here, redeeming points can be a great opportunity to offset the cost of these stays.<\/p>\n
When To Not Use Fixed-Value Points<\/span><\/h2>\n
Don't use fixed-value points for expensive fares\u2014especially premium cabin fares that cost thousands of dollars. Instead, fixed-value points are best used for cheap domestic tickets, mistake fares, award taxes and fees, or vacation rentals and hostels. Generally speaking, you should use fixed-value points when the cash price of the item is low enough that you can\u2019t justify redeeming frequent flyer miles or transferrable points.<\/p>\n
Transferable points and traditional frequent flyer miles are more valuable when redeemed towards business- and first-class redemptions that can cost thousands of dollars or when cash prices are high but the cost of a flight in miles hasn't inflated.<\/p>\n
Don't redeem fixed-value points for expensive premium cabin fares!. Credit: Emirates<\/em><\/enter><\/figure>\n Let's walk through a quick example. If a domestic award ticket is 25,000 miles or $187, you will get better value by redeeming 18,700 points at 1\u00a2 per point. However, for an international business class award that costs 80,000 miles or $4,500, you\u2019re better off spending 80,000 miles than dropping 450,000 fixed-value points. Run the numbers, and you'll see why you want to save your miles for business class.<\/p>\n
Which Cards Earn Fixed-Value Points?<\/span><\/h2>\n
There are several well-known cards familiar to U.S. travelers, along with some others that may be less familiar. Here are some of the best credit cards that earn fixed-value points and miles:<\/p>\n\n
- Drawbacks of fixed-value points<\/a><\/li><\/ul><\/li>
- Benefits of fixed-value points<\/a><\/li>
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