Before you redeem a hefty cache of airline rewards points toward a gift card, it is a good idea to give it a second thought. Just because you can spend your miles on things besides travel does not mean you should. To get the most value from your hard-earned airline rewards, it is usually best to use miles and points for what they were designed for, and that is travel.
In this travel guide prepared by Treknova, we shall find out if it’s worth turning your frequent flyer miles into gift cards.
Can You Convert/ Turn Frequent Flyer Miles Into Gift Cards?
Each airline or credit card provider will determine what the value proposition or benefits are for their own card. However, flight rewards can indeed be advantageous in an airline credit card partnership, since the airline is in control of its own costs and the credit card it is subsidizing.
Now, before we get into whether you should turn your frequent flyer miles into gift cards, you must first, consider whether it is possible that you can do it. Although the answer is yes, you should also know that for such, customers have only fewer options.
Several airlines have temporarily stopped non-travel redemptions, but not all of them. Here is what a few of the major airline carriers have done:
American Airlines: American Airlines currently does not offer any programs to customers that allow them to convert miles to gift cards.
Delta Airlines: Delta Airline has currently put its gift card program on hold due to the outbreak of the COVID-19 pandemic.
United Airlines: United Airlines is still allowing the transfer of MileagePlus turning your frequent flyer miles into gift cards and merchandise.
Southwest Airlines: The airline says on its website that it has temporarily paused the ability to redeem points in its More Rewards program.
Other airlines may be continuing their frequent flyer miles transfer programs. You should check with your airline loyalty program if you have specific questions.
Now that we have answered the question of whether can you turn your frequent flyer miles into gift cards, let us also weigh whether you should convert them or not.
Understanding How Much is Miles Worth
The value of frequent flyer miles is pretty straightforward. Miles earned in an airline program and redeemed for flights are generally worth between 1.5 and 2 cents each. However, when those miles are redeemed for consumer goods or hotel stays, they are typically worth far less than a penny each.
Several research analyses have also found that in most cases, airline credit card rewards are worth twice, if not three times, as much when put toward flights or other travel redemption options.
For instance, you can purchase a flight to the Caribbean and still be able to cut flight costs significantly by redeeming miles. Let’s say, the best fare for two passengers on Delta Air Lines is $750, but a mileage ticket was only 35,000 miles. That one is a no-brainer. Now, assuming a $100 value per 10,000 miles, you get the flight to the Caribbean for less than half the normal price using your miles.
Meanwhile, a $250 Delta gift card goes for 35,700 miles, while a $250 Tiffany & Co. gift card goes for a whopping 52,000 miles. Thus, in both cases, you would get a much greater value for the miles by redeeming them for flights.
Know the True Cost of Free Gift Cards
Keep in mind that you have to spend money in order to earn miles. Most major airline credit card programs offer cardholders two points or miles for each dollar spent on airline-branded purchases and related travel expenses. But, then only 1 mile or point per dollar is spent everywhere else.
Taking another example here, if you are a Frontier Airlines World Mastercard holder and only use your card for Frontier travel purchases, you will have to spend $17,599 to earn enough miles for a $100 Target gift card. If you use that card for non-Frontier travel purchases, a $100 Target gift card could cost you upward of $30,000. Suddenly, that free gift card is not so free after all.
However, there may be a few situations, where redeeming your travel rewards for non-travel purchases would make no sense. This could be because you can’t spend enough money to achieve the travel award you want before your points expire. It could also be for the reason that maybe you are just not a frequent traveler anymore. Therefore, utilizing your miles and point redemption options for other types of purchases allows you to take advantage of the rewards you earned.
While traveling is aspirational, you must also have to be realistic about your lifestyle. If you are regularly seeking non-travel reward redemption options from an airline credit card, it might be time to apply for a new rewards credit card that better fits your spending habits, such as a general cash-back credit card.
If you travel for business, then airline programs will probably make sense, especially if you fly or spend enough to reach the highest status tiers where you truly get recognized. For everyone else, there are other reward cards better designed for you. You should, thus, look at the different offers from credit card providers and select one that is relevant to your lifestyle, your spending, and your expectations as well.
You must also know the perfect way of paying or making the payments for your reservation online. What is the best way to pay for your flight?
Should You Turn Your frequent flyer Miles Into Gift Cards?
While it is understood the fear that some customers may have about certain airlines failing during this time of economic uncertainty, airline carriers typically will petition a bankruptcy court to allow it to preserve frequent flyer miles.
With that being said, converting/turning your frequent flyer miles into gift cards may look more attractive. The assurance of turning those miles into gift cards is that you know you have got the money. However, the big issue with turning miles into money has to do with the value of the exchange.
The problem is the ratio of payout on those gift cards is terrible. So, you are getting the ability to use the travel miles as cash eventually. But, the payout that you are getting is relatively poor compared to the value of the miles, if you use them to fly.
Since your frequent flyer miles significantly drop in its value, therefore, if you use them for anything other than travel, you may consider waiting things out, and seeing if the airline carrier can rebound in the months ahead.