How I Best Optimize Reward Redemption for Travel & Cash

[Updated June 2016]

​The best way to optimize reward points is completely subjective to what you value. For me, I always decide what I want to do, then I decide how to get there and where to stay. 

The secret to optimizing points is to know what points are most valuable and in what circumstances. 

Some general rules of thumb that I've learned over the years:

• Flying on a Tuesday, Wednesday or Thursday will have better redemption values. 
• The earlier you book, the better the redemption value. Most of the airlines have limited "saver" awards that require less points. Besides, you want to book early anyways because the airlines have such limited award inventory.
• Longer is better. International flights are a better redemption value than domestic. Long-haul domestic is generally a better value than short routes. The only exception is Southwest which is based on the dollar of the fare. 
• SPG points are more valuable spent at an SPG hotel than transferring to an airline. I only transfer if I really need to top an account off in order to hit an award.

For me personally, I use Chase ultimate reward points to convert into airline miles - primarily Southwest for flexible, short flights and the occasional international flight on a United affiliate (but NEVER United). I generally buy American and Delta economy long-haul or international flights and then use upgrade certificates or points to upgrade to business class. The reason I do this is because I generally need the qualifying miles from purchasing a flight in order to achieve status levels (which keeps the points flowing). I only use starpoints for nights at SPGs.

One last set of tips...things you should NOT do:

• Do not convert ultimate reward points into airline or hotel miles until right before you plan on using them. They convert within 15 minutes and there is no point in losing the flexibility until you have to transfer.
• Do not use airline or hotel miles for car rentals. This voids the insurance you get through your credit card.
• Do not convert your ultimate reward points or starpoints into Intercontinental Hotels or Air New Zealand or any of the obviously terrible conversion ratios.
• Do not convert your Chase Freedom points into cash if you have Chase Sapphire.
• Do not ever buy merchandise with any points. The conversion ratios are terrible.

Great, now you know how to optimize your rewards to save you cash. Click here to see my system for tracking rewards and assigning cash value.

​Questions? Comments? Tweet me @RetireOnRewards.