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Paying For Airfares With Money Vs Points: Which Is Best?

If you’re one of the millions of Australians who belong to a rewards programme, you’ve probably got a heap of points accumulated. Saved up for a rainy day or that next holiday you plan on taking… Those points hold the promise of exciting travel opportunities and good cost savings. Now you just have to figure out whether its better to pay for your airfares with money or points!

On the surface, this may seem like a no-brainer. You’ve got all those points so it makes sense to use them for your airfares, right? However, as many canny points collecting travellers know (often from experience), this isn’t always the most productive use for them.

But First, A Few Pertinent Points About Cash And Points!

Cash always holds the same value within a currency. Granted, it doesn’t buy anywhere near as much as it used to but $100 AUD is always $100 AUD regardless. The same can’t be said of rewards points. Their value depends on the rewards programme, and also what you want to redeem them on. Those can vary a lot.

Redeeming Points 101 – Comparing The Pair

For example, when it comes to ‘distance-based’ redemptions like airfares, points have 2 values:

  • A cash value, and
  • A distance value.

A cash value assigns a tangible monetary value to the points so you can directly compare their value to real money and work out how much they’ll buy you.

A distance value gives them a kilometre value, which measures ‘how far’ they can take you. Ideally, you’d use both to work out whether it’s more feasible paying for airfares with money vs points.

Should You Use Points?

To work out which to use, start by working out the cash value of your points – we’ll explain how later. You can then use the figure you come up with to compare the monetary value of the points you’ll need for the airfare with the cost of paying cash for the ticket. If these are around the same amount then it may make sense to use points, barring other considerations.

Or Would It Be Better To Use Money?

In some cases though, even if the cash value of your points is about equal to the cost of the flight, it may not be so beneficial to use them in terms of their distance value. Cheap, short flights are good examples of this because airlines generally assign comparatively more points to these flights, relative to their length, than they do longer flights.

To explain – redeeming 50,000 points for a 5,000-kilometre flight is better value in terms of distance value per point than redeeming 10,000 points for a 300-kilometre flight because:

  • 50,000 points for a 5,000km trip will cost you 10 points per kilometre
  • 10,000 points for a 300km trip will cost you 33 points per kilometre.

In this instance, lower is better! So, if you want to ‘drive your points further’, consider saving them for longer trips and whip out the wallet for short flights! As a bonus, you’ll also earn points on the purchase. But…if money is the key consideration (maybe you don’t plan on taking long trips any time soon and just want to use your points) then points are the better option, particularly with a $ for $ flight.

Other Points To Consider When Weighing Up Points Vs Money

However, those ‘other’ considerations we mentioned earlier when it comes to using points to pay for airfares could tip the balance in favour of using cash instead. They relate to the fact that airlines invariably prioritise cash-paying passengers. For point redeemers, that generally means:

  • Fewer eligible flights,
  • Less award seating availability,
  • Black out travel dates during peak travel times, and
  • Sundry other inconveniences.

So – if you want a particular seat on a particular flight on a particular day during school holidays it might be challenging to get what you want if you use points! Paying your airfares with cash avoids that.

Making The Calculations – Calculating The Cash Value Of Your Points

How much are your points worth in monetary terms?

You can find out the average cost or cash value of a point from the awards chart provided by your programme provider, or you can use an online points calculator. However, it’s probably more useful, and accurate, to work it out for the specific situation at hand.

You do this by

  1. Looking at both the dollar value and the point value of an airfare. Say your airfare is going to cost $500 AUD or 50,000 points.
  2. Divide the dollar cost of the airfare by the number of points required, which gives you the cash value of your points in respect of your airfare (500 ÷ 50,000 = 0.01 so in this instance, your points are worth 1 cent each, making 50,000 of them worth $500.) Therefore, it’s a like for like situation because either way, it will cost you $500 cash or $500 worth of points for the airfare.

But (remember we said the value of points varies and here’s a good example) – if you wanted to use your points for accommodation, you might find that $500 worth of accommodation will cost you 100,000 points. Using the above formula, that means your points are only worth half a cent each when it comes to accommodation.

These values also vary between airlines, and between hotel groups. Qantas Frequent Flier points may not be worth the same as Virgin Australia’s for example, and Hyatt’s points may have a different value to Hilton’s.

Making More Calculations – Calculating The Distance Value Of Your Points

To work out the distance value of your points, you:

  1. Find out how many points are required for the airfare you want to book.
  2. Determine the distance the flight will cover (in kilometres or miles).
  3. Divide the number of points needed by the distance of the flight, which gives you the point value of each kilometre or mile with your rewards program.

For example, using the example we used earlier: if you need to use 50,000 points for a 5,000km trip, it gives you a distance value of 10 points per kilometre. If you need 10,000 points for a 300km trip, that gives you a distance value of 33 points per kilometre. Less is better when it comes to the distance value of points!

Are There Advantages To Paying For Your Airfares With Money Anyway?

As it turns out, yes there are…

It Gives You Like For Like In Terms Of Value

Airlines and travel agencies assign a monetary value to their products and services. They also calculate their prices based on things like destination, travel dates, and the level of service required. So, when paying for airfares with money, it’s a straightforward exchange of a chunk of money for a service that is deemed to have the equivalent monetary value.

Cash Is Flexible And Available

We mentioned this earlier but it’s worth noting again – as a cash paying customer you have more flexibility around flight availability, travel dates, destinations, and seating options. This could be a deal-breaker if you have particular travel preferences, like a window seat, a preferred airline, or have a set travel date. Cash can also be convenient if you have any last minute plan changes.

Using Cash Means You Go On Accruing Rewards

If you want to keep earning points, pay for your airline tickets with money, and get points for the purchase. Save them up for another day, or for redeeming on other products and services.

Using Cash Allows You To Shop Around

Budget travellers may find that opting to pay for flights with money gives you more freedom to shop around, compare prices, find better deals, or take advantage of sales and promotions. These can all lead to significant savings, and add more points to your collection.

What Are The Advantages Of Paying For Your Airfares With Points?

If you’re wondering by now whether there really are any advantages to using points to pay for your airline tickets… yes, there are.

Using Points Equals Spending Less Money On Your Airfare

The most obvious advantage of using points to pay for your tickets is that it reduces the amount of money you need to outlay on them. Even using points to cover just part of the airfare can make good sense if for no other reason than it gives you more spending money at your destination!

Points Can Be Used For Upgrades And More Benefits

Depending on your loyalty program, you may be able to use your points to upgrade your tickets to Business Class. Or you may be able to get other travel benefits like access to passenger lounges, extra luggage allowances, or even priority boarding. Travel in style without having to pay in style!

Points May Provide Better Distance Value

As discussed earlier, you may get better mileage value using points on longer flights.

How To Make The Right Choice – Money Vs Points For Your Airfare

Ultimately, the choice between paying for airfares with money vs points depends on your preferences, financial situation, and the value you place on your accumulated points. Also know your priorities. If you want to save money, use points. If you want flexibility around your travel arrangements, paying with money is more likely to give you that. Or consider combining points and money – this is probably the smartest strategy for most people. Find out what you can pay for with points, and what you can only get with cash.

 

You can then further assess the cost-effectiveness of using points by working out the distance value of your points and using this information to compare different travel options based on how far you’re travelling. You may have different flight options or specific travel distances.

 

You can weigh up how far your points will get you regardless of how much flights may cost in monetary terms. You can also compare various routes and work out which ones will get your further for your points. In summary, while the cash value calculation is crucial for assessing the cost-effectiveness of using points initially, the distance value calculation helps you delve deeper into the efficiency of your points in terms of distance covered per point. It is especially useful when you have multiple flight options or when you have specific travel distance goals. By considering both calculations, you can make a more well-rounded decision that considers both the monetary value and the distance efficiency of your reward points, ensuring you get the most value out of your travel redemptions.

 

If the outcome of both assessments is that using points is cost competitive on the price of your airfare and provides good value in terms of how far you can travel, then using points to pay for the airfare is a logical choice. If, however, the monetary value of the points needed for an airfare is more than the actual cost of the airfare, it’s going to cost you more in points than the monetary value of the airfare

**Best Approach**: To make a well-informed decision, it’s often beneficial to use both calculations together. Start by using the cash value calculation to determine the dollar worth of your points and compare it to the cash cost of the flight. If the cash value is competitive and offers significant savings, using points might be a good choice.

Next, apply the distance value calculation to assess how efficiently your points cover the distance of the flight. If the points provide good value in terms of distance covered, it further reinforces the decision to use points.

When deciding whether to pay for an airfare in cash or points, both the cash value and distance value calculations can be effective, but it depends on your priorities and the specific context of your travel situation. Here’s how each method can be helpful:

  1. **Cash Value Calculation**: Use the cash value calculation if your primary concern is understanding the monetary worth of your points and comparing it directly to the cash cost of the flight. This method allows you to see the dollar value of each point and assess whether using points provides a significant discount or savings compared to paying in cash.

– **Advantages**: Straightforward comparison of points to cash cost. Helpful for non-travel redemptions and comparing various reward programs with different redemption options.

– **Considerations**: Doesn’t account for variations in flight distance or the efficiency of points in covering travel distance.

  1. **Distance Value Calculation**: Employ the distance value calculation if your main goal is to evaluate how efficiently your points cover the travel distance. This method is particularly useful for airline rewards programs where the points required for a flight are often based on the distance travelled.

– **Advantages**: Useful for comparing flights of different distances and identifying efficient point usage. Especially relevant for distance-based rewards programs and maximizing redemptions for specific travel distances.

– **Considerations**: Doesn’t provide a direct comparison to cash cost, and the cash savings might vary for different flight lengths.

**Best Approach**: To make a well-informed decision, it’s often beneficial to use both calculations together. Start by using the cash value calculation to determine the dollar worth of your points and compare it to the cash cost of the flight. If the cash value is competitive and offers significant savings, using points might be a good choice.

Next, apply the distance value calculation to assess how efficiently your points cover the distance of the flight. If the points provide good value in terms of distance covered, it further reinforces the decision to use points.

 

By combining both methods, you can weigh the overall value of your points, considering both cash savings and distance coverage, to make the best decision for your specific travel needs and preferences.

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Privacy Policy

Privacy Policy

1. Introduction

1.1 Count Limited and its related bodies corporate (collectively ‘Count’, ‘we’, ‘us’, ‘our’) respect your privacy and are committed to protecting your privacy. We understand the importance you attach to information that identifies you (your ‘personal information’) and we want to help you protect it.

1.2 We are bound by, and committed to supporting, applicable privacy legislation including the Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs). This Privacy Policy (‘Policy’) explains how we collect, hold, use, and disclose your personal information that we may obtain when you submit information to us in person, by mail or email, or by visiting our website.


2. How do we collect and hold personal information about you?

2.1 We collect personal information from you in a variety of methods. Examples of how we collect personal information include: 

  • Through communications between you and our representatives or your adviser or accountant;
  • Your use of our website;
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2.2 Because our products and services are often offered by intermediaries such as financial planners, solicitors, or accountants, we may collect personal information about you from these third parties.

2.3 You can deal with us anonymously or by pseudonym unless it is impractical for us to deal with you where you have not identified yourself or have used a pseudonym. We require certain personal information to provide you with services and information. If you do not provide us with certain personal information, we may not be able to provide you with access to those services or respond to your request for information.

2.4 We will only collect personal information from you where it is reasonably necessary for us to provide our services to you or to perform our functions or activities.

2.5 We will only collect sensitive information from you with your consent, except in permitted general situations which include:

  • The collection of the information is required or authorised by or under an Australian law or a court/tribunal order;
  • The collection is necessary to address a threat to an individual’s life, health, or safety; and
  • Permitted health situations.

2.6 We may hold your information electronically or physically and have in place appropriate data and physical security measures and protocols to protect that information from loss or from disclosure not contemplated by this Policy.


3. What type of personal information do we collect?

3.1 The type of personal information we may collect from you includes (but is not limited to):

  • Names, address, email, phone numbers, and job titles;
  • Information in identification documents such as your passport or driver’s licence;
  • Tax file numbers (TFNs) and other identification numbers such as Medicare number;
  • Date of birth and gender;
  • Financial information;
  • Details of superannuation and insurance arrangements;
  • Sensitive information (with your consent), such as health information or membership details of professional or trade associations or political parties;
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4. How do we use your personal information?

4.1 We will use the information you supply for the purpose of providing you with the service(s) agreed under our engagement and related services, such as accounting or business advisory services, or to meet obligations we may have at law, including in relation to health and safety.

4.2 We may also use the information we collect for our internal business and management processes (for example, accounting or auditing purposes), monitoring and improving our website, keeping you informed about our services and company news, and for any other purposes that would be reasonably expected by you and to allow us to comply with our obligations under the law.

4.3 We may also use personal information we have collected from you for the purpose of marketing our services. If you do not want to receive marketing material from us, you can unsubscribe by contacting us as detailed below:

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5. How do we disclose your personal information?

5.1 Your personal information will only be disclosed:

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  • Where you have consented to the disclosure;
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  • In permitted health situations;
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  • In connection with an actual or proposed sale, reorganisation, or transfer of all or part of our business, including as set out in clause 16.1.

5.2 We may use, store, process, or back-up your personal information on servers that are located overseas (including through third-party service providers). The privacy laws in other countries might not be the same as in Australia. However, where we provide your personal information to third parties overseas, we will take such steps as are reasonable to ensure that your information is handled and stored in accordance with Australian privacy laws and this Policy. Currently, we use outsourced service providers in the Philippines, India, and Serbia.


6. Access to your personal information

6.1 You can request us to provide you with access to personal information we hold about you by sending us an email: privacy@count.au (no spam please) or writing to us at Level 1, 45 Clarence Street, Sydney NSW 2000.

6.2 We may allow an inspection of your personal information in person, or provide copies or a summary of relevant documents, depending on what is the most appropriate in the circumstances. Any charge we make for providing access will be reasonable and will not apply to lodging a request for access. Your request to access your personal information will be dealt with in a reasonable time.

6.3 Note that we need not provide access to personal information if a request is frivolous, or where to provide access would pose a threat to health or public safety, unreasonable interference with another person’s privacy, or be a breach of the law. If we refuse access, we will provide you with reasons for doing so.


7. Accuracy and correction

7.1 To enable us to keep our records properly, please notify us if you believe that any information we hold about you is inaccurate, incomplete, or out of date and we will take reasonable steps, in the circumstances, to ensure that it is corrected. You can notify us by sending us an email: privacy@count.au (no spam please) or writing to us at Level 1, 45 Clarence Street, Sydney NSW 2000.


8. Our security procedures

8.1 We take your privacy and the privacy of our associated entities and their clients very seriously. We will take reasonable steps in the circumstances to protect any personal information you provide to us from misuse, interference, or loss and unauthorised access, modification, and disclosure.

8.2 We will also deidentify and destroy the personal information we hold about you once our legal obligations cease. Our security procedures are reviewed from time to time and we update them when relevant.

8.3 Please be aware that the transmission of data over the internet is never guaranteed to be completely secure. It is possible that third parties not under our control may be able to access or intercept transmissions or private communications without our permission or knowledge. We take all reasonable steps, in the circumstances, to protect your personal information. However, we cannot ensure or warrant the security of any information you transmit to us. Such transmissions are done at your own risk.


9. Data breach notification

9.1 We are required to give notice to the Office of the Australian Information Commissioner (OAIC) and affected individuals of an “eligible data breach”. This means that if we hold personal information about you, and there is unauthorised access to or disclosure of your personal information, and if you, as the “affected individual” would be likely to suffer serious harm from this access or disclosure, we must notify both you and the OAIC.

9.2 “Serious harm” could include identity theft, threats to physical safety, economic and financial harm, harm to reputation, embarrassment, discrimination, or harassment. The test is whether a “reasonable person” would expect you to suffer serious harm.

9.3 If you are likely to suffer serious harm from a data breach, we will notify you of:

  • The nature of the eligible data breach (i.e., how the information was accessed or disclosed);
  • The type of information that was accessed or disclosed;
  • The steps that we have taken to control or reduce the harm, and those that we plan to take;
  • Any assistance we can offer you, such as arranging for credit monitoring;
  • Anything that we can suggest you can do to assist yourself or mitigate the harm;
  • Whether the breach has also been notified to the OAIC;
  • How you can contact us for information or to complain; and
  • How to make a complaint with the OAIC.

9.4 We will notify you using the same method that we usually use to communicate with you. If it is not practicable for us to notify you personally, we will publish the notification on our website.

9.5 There are some circumstances in which we do not have to notify you of a data breach. These include:

  • Where we have taken remedial action before any serious harm has been caused by the breach;
  • If you have been notified of the breach by another entity;
  • If notification would be inconsistent with Commonwealth secrecy laws; or
  • Where the OAIC declares that notification does not have to be given.

9.6 Depending on the nature of the breach and the harm, we may voluntarily inform other third parties such as the police or other regulators or professional bodies.


10. Identifiers

10.1 We will not adopt as our own any government identifiers you may provide to us such as TFNs and will not store these identifiers on any information.


11. Links to other sites

11.1 We may provide links to other sites for you to access. You should be aware that these other sites are not subject to this Policy or our privacy standards and procedures. You will need to contact them directly to ascertain their privacy standards.


12. Cookies

12.1 Our website may deposit “cookies” on a visitor’s computer. Cookies are pieces of information that a website transfers to an individual’s hard drive for record-keeping purposes. Cookies are only sent back to the website that deposited them when a visitor returns to that site.

12.2 Cookies make it easier for you by saving your preferences while you are at our site. We never save personal identifiable information in cookies. Most web browsers are initially set up to accept cookies. You can, however, reset your browser to refuse all cookies or to indicate when a cookie is being sent.


13. Changes to our Privacy Policy

13.1 From time to time, we may vary this Policy for any reason. We will publish any changes on this website.

13.2 By continuing to use our website and continuing to provide us with your information, you confirm your acceptance of these changes.


14. Complaints resolution

14.1 We are committed to providing a fair and responsible system for the handling of complaints from parties whose personal information we hold. If you have any concerns regarding the way we have handled your privacy, please send us an email at privacy@count.au or write to us at Level 1, 45 Clarence Street, Sydney NSW 2000. We will address any concerns you have through our complaints handling process and we will inform you of the outcome of your complaint within a reasonable timeframe.

14.2 If after receiving our response, you still consider that your privacy complaint has not been resolved, you may refer your concerns to the Office of the Australian Information Commissioner at www.oaic.gov.au.