This article is reprinted by permission from NerdWallet.
Use your points, don’t hoard them, because their value may go down.
Getting the most value out of travel rewards matters to a lot of frequent flyers. According to a 2023 NerdWallet survey of more than 2,000 U.S. adults conducted online by The Harris Poll, 35% of travel rewards credit cardholders say they try to get the best possible value when redeeming their earned points/miles for travel.
For the last four years, if you wanted to collect the most valuable airline miles among U.S. carriers, you’d probably collect Southwest
Rapid Rewards points. According to NerdWallet’s valuations, Southwest Airlines points have hovered around 1.5 cents per point since 2019 (when we started collecting the data). That means travelers can usually redeem 10,000 Southwest points for a $150 award flight. Let’s put that in perspective. In 2020, Southwest Rapid Rewards points were worth a whopping 1.6 cents, while every other major U.S. airline’s points were worth only 1 to 1.1 cents. Southwest Rapid Rewards members could book more flights (or more expensive flights) because their points were worth almost 1.5 times as much as everyone else’s. But other airlines started catching up over the past three years. In 2022, Southwest, Delta Air Lines
all tied for the most valuable miles. And this year, Southwest has finally lost its crown to … American Airlines. Yeah, it’s a surprise to us, too, considering American Airlines did away with its domestic award chart in April and got rid of its low-cost SAAver and AAnytime awards. Usually, airline and hotel programs that switch to dynamic pricing — instead of using award charts — have lower point values, not higher. So why are American Airlines AAdvantage miles worth so much now? And how did the rest of the airlines fare in our annual analysis of airline and hotel points? Here are some of the highlights from our latest data. Plus: Want to add a rental car or hotel to your flight reservation? Here’s why you shouldn’t bundle your travel bookings.How have points changed in value last year? To calculate the value of airline miles and hotel points, we collect real-world data on thousands of flights and hotel stays and compare cash prices and award prices to determine the baseline value of each loyalty program’s points. American Airlines miles are worth 1.7 cents this year, up from 1.5 cents last year. The next highest are Southwest and JetBlue, which haven’t changed in valuation and remain at 1.5 cents per point. Alaska Airlines miles climbe …