How to Redeem Points and Miles

Contrary to what most people think, earning miles is actually sometimes EASIER than redeeming miles.  Of course, I’m talking about redeeming your hard earned miles in a smart way, maximizing the value you get out of it.  Anyone can just book whatever the Aeroplan or whatever search engine spits out as the recommended route, but you would be missing out huge on what is possible.

At the end of the day, what makes travel hackers feel warm and fuzzy inside is scoring that hard to get redemption that maxes out all the benefits of the system and is right on the limit of what is possible.

canadiantraveltip - easy flight redemption
Instead of something like this that can easily be booked online with a few clicks…
canadiantraveltip - hard flight redemption
What if we could book something like this for EXACTLY the same number of miles and only a slight addition of taxes and fees

After all, if you took a hard credit check, worked for the minimum spend and maybe even paid an annual fee and you only got $150 for your troubles, this business of credit cards churning doesn’t seem like a worthwhile hobby at all.

You might have heard of the term “cost per mile“, or CPM for short.  This represents the cost if you bought your redemption flight with money, divided by how much miles you used, arriving at how much each mile was worth.  Typically, anything over 2-3 cents CPM is a decent redemption while there are some insane redemption that can hit 10 or even 15 cents CPM.

For example – using 70k Alaska miles, we can redeem the following flight below:

canadiantraveltips-cathay flight cost

$13,114 / 70,000 gives us a incredible 18 cents CPM.  What this means is that if you earned 1 mile per $1 spent on a credit card (ignoring any welcome bonuses or bonus categories that gives you more than 1 mile), you are getting a 18% return per dollar spent!

To achieve this usually involves maximizing the distance flown and time in the air for the same miles spent.  In addition, you will notice the CPM for premium cabins (business class and especially first class) is much higher than economy bookings.

Why?  Business class are usually 3-5 times the price of a discount economy ticket and first class can be 7-10 (or ever higher) times the cost of economy.  However, with miles, business class are usually only 2 times the cost in terms of miles and first class 2.5-3 times the miles needed for an economy booking.

It’s important to know for the number of miles you are using for your trip, what is the most distance flown possible.  Each points system is different – some are region based, some are distance based and some allow you to tack on an extra flight to another Continent altogether.  I’ll cover this on my later posts.

The biggest difficulty everyone faces in the miles and points community is award availability.  Most seats on a plane is NOT available to be redeemed with points.  The reason for this is airlines make a lot more revenue from paid bookings, they usually get a smaller fraction of the cost when a passenger flies using points.  Therefore, they block availability of most seats until closer to the departure date, like T-14 days.

canadiantraveltip - availability
Hey, where’s my direct flight in business class!?  Do you want 2 unnecessary layovers with the long leg in economy class AND be at the airport at 4:30am while still paying 75k miles?

When booking complex multi-segment trips, a single leg with no availability can seriously mess up your whole route and put you back on square one of the drawing board.   I can’t even begin to count the number of hours I have spent planning flight redemptions because a certain flight wasn’t available for booking with miles and I wanted to maximize my CPM.

However, when you get off the phone with the booking agent and you look at your new 10 segment itinerary of premium cabins and airlines going to awesome cities, the sense of achievement you feel is hard to replicate anywhere else.

It’s exactly these moments that makes all the time applying for cards, planning spending and on the phone with clueless call centers worth it.

I’ll be covering the Aeroplan rules, tips, tricks and running through an example on Aeroplan in my next post.