This series of articles about credit cards, points and miles, and budgeting for travel is brought to you in partnership with The Points Guy.

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Many consumers who tried to book travel this summer got the sticker shock of a lifetime, with sky-high fares and hotel rates virtually worldwide. Even destinations traditionally considered “off-peak” in the summer experienced high travel demand and corresponding cost hikes. More and more travelers are finding the benefits of incorporating points and miles into their travel budgets.

Making a travel budget with points and miles isn’t all that different from using cash: You create a goal, find ways to earn (in this case, rewards), and when it comes time to “pay” for travel, you try to find the most reasonable option for your budget. Of course, there are a few caveats, namely that points and miles are subject to blackout dates. Despite these restrictions, you can still save a lot on travel by choosing the right programs. 

Here’s how to make a travel budget using points and miles:

Enjoying sushi in Tokyo
Enjoying sushi in Tokyo © Tupungato / Shutterstock

Start by setting a travel goal

The most critical step in creating a travel budget is to determine how you want to use your points. Start with a destination and figure out your mode of travel next: Are you more of a budget traveler? Do you want to fly first class? Book an all-inclusive vacation? Maybe you’re more of a cruise fan or want to plan a family vacation to Disney World. Regardless of your travel goals, it’s important to identify them early on before you start earning any points.

The last thing you want is to earn points that don’t provide flexibility or tie yourself down to an airline that limits award inventory or a hotel loyalty program with a limited portfolio in the destinations you want to visit. Determining where you want to go, when, and how you want to get there is a crucial first step in determining how many points and miles you’ll need.

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Figure out the cheapest way to get there 

Once you know where you want to travel and how, it’s time to research the cheapest way to get there. There’s more than one way to travel on points and you should set your travel budget based on the cheapest option. For example, United Airlines charges upwards of 60,000 miles for a round-trip economy-class ticket to Honolulu in the summer. But if you book that same ticket with Turkish Airlines Miles&Smiles (a United partner), then you’ll need just 15,000 miles round-trip. 

It’s easy to get lost in a sea of loyalty point programs, but researching the cheapest option can help you save points when setting a travel budget. To help you get started, here’s a round-up of cheap award redemption rates to popular destinations:

  • Hawaii: 15,000 Turkish Airlines miles round-trip in United economy class. Turkish Miles&Smiles is a Bilt Rewards, Capital One and Citi ThankYou transfer partner.
  • East Coast to London: 20,000 Virgin Atlantic points round-trip. Virgin Atlantic is a transfer partner of American Express Membership Rewards*, Bilt Rewards, Capital One and Citi ThankYou Rewards. 
  • Europe (general): 55,000 All Nippon Airways (ANA) miles roundtrip in economy and 88,00 miles in business class. You can transfer Membership Rewards points to ANA miles at a 1:1 ratio.
  • Asia: 100,000 Alaska Airlines miles round-trip for business class to Asia. Includes a free stopover so you can see multiple cities or countries.
  • Middle East and Africa: 65,000 ANA miles round-trip in economy or 104,000 in business class.
  • Australia: 160,000 Avianca Lifemiles round-trip for a United business class ticket to Australia. Avianca Lifemiles is a 1:1 transfer partner of Membership Rewards, Capital One miles and Citi ThankYou.

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The overwater bungalows at Hilton Moorea Lagoon Resort & Spa
The overwater bungalows at Hilton Moorea Lagoon Resort & Spa © Kyle Olsen / The Points Guy

Account for fluctuating redemption rates

When creating a travel budget, it’s important to remember that award availability and pricing can vary significantly. Most airlines utilize dynamic pricing, meaning award rates can increase substantially with demand. Hotels like Hyatt and Marriott even use peak/off-peak pricing, which can radically increase nightly rates during busy periods. 

When demand rises and saver inventory gets booked up, airlines and hotels often make premium awards available. Premium doesn’t always mean upgraded travel. Sometimes, airlines will charge as much for a non-saver economy class seat as they would typically charge for business or first class. 

When standard rooms are sold out, you might find a room with a better view or even a suite available for more points than you had budgeted for. Transferable currencies can help you make up the difference in these instances, but it’s important to be aware of these price fluctuations and set aside some extra points to cover them. The last thing you want is to lose out on the dream vacation you’ve been planning because of a points shortage. 

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Evaluate your spending habits

It might sound strange to evaluate your spending habits when discussing ways to budget with points and miles. However, it’s crucial because it will determine the types of credit cards you should get. Credit cards are an essential tool for earning lots of points and miles. The best credit cards offer new applicants 60,000 or more points after they meet specific spending requirements. It’s important to evaluate your spending habits and figure out 1.) how much of a spending requirement you can complete to earn credit card bonuses and 2.) which credit cards are ideal for your spending habits.

For example, if your biggest expenses include dining, groceries and take-out and delivery in the US, the American Express® Gold Card* could be an excellent option. The card earns 4 points per dollar spent at U.S. supermarkets and on dining at restaurants. If your spending doesn’t neatly fall into one or more categories, you might be better off with a Capital One Venture Rewards Credit Card, which earns 2 miles per dollar spent on everything (with up to 5X miles on Capital One Travel bookings). Knowing how much you spend and which categories those purchases fall under can help you narrow down your credit card options.

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Benefit from upgrades and other perks from choosing the right card
Benefit from upgrades and other perks from choosing the right card © Ryan Patterson / The Points Guy

Diversify your points balance

Diversifying your points balance is one of the most important ways to balance your travel budget. You can’t always predict how many points you’ll need, but a diversified points portfolio gives you flexibility if one or more loyalty programs restrict award availability. The best way to diversify your points balance is to earn bank points that can be transferred to multiple airlines and hotels. Transferable points are all most people need to ensure they have access to a vast array of points when they’re saving up for a dream vacation. The best transferable rewards include American Express Membership Rewards*, Bilt Rewards, Capital One Miles, Chase Ultimate Rewards and Citi ThankYou points.

While arguably the most valuable, transferable points aren’t the only rewards you should be earning. Airline miles are also useful, helping you save thousands of dollars on airfare. You can book cheap economy flights or splurge on a once-in-a-lifetime (but only if you want it to be) trip in first class. Some of the best airline miles for cheap award redemptions (and ease of accrual) include Avianca Lifemiles, Alaska Mileage Plan, Air France-KLM Flying Blue miles and Virgin Atlantic points. Except for Alaska, all these points can be transferred from American Express Membership Rewards*, Capital One and Citi ThankYou at a 1:1 ratio.

Hotel points come in handy regardless of whether you’re saving for luxury hotels or prefer budget options. Most major hotel chains no longer publish award charts, making it difficult to determine how many points you need for a free night. Hyatt still publishes comprehensive award charts outlining how much each hotel costs during peak, standard and off-peak seasons. Hyatt is a great program for most travelers, with free nights starting at just 3500 points.

Marriott Bonvoy is the largest hotel chain in the world, so it helps to have some points on hand for a free night or two. Hilton Honors and IHG One also have large property portfolios, making them worth a look if you like a wide range of hotel stays. Meanwhile, Wyndham Rewards is great for families and group travelers since it operates a wide range of properties. You can use points to stay at hotels, resorts, condos and vacation homes. Wyndham awards start at 7,500 points per night (per bedroom) and you can book a cash-and-points award from just 1,500 points.

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Don’t forget taxes and fees

When making a travel budget using points and miles, you’ll want to account for taxes and fees. On domestic flights, award taxes are as low as $5.60, but they can add up to hundreds (even thousands) on international flights. For example, British Airways is notorious for tacking on high fuel surcharges on flights to the UK. These taxes can add up to over $2,000 round-trip bookings in first class. Most people don’t realize this the first time they redeem their miles and get sticker shock. It's important to factor taxes and fees into your travel budget and avoid airlines that impose high fuel surcharges.

Instead of booking with British Airways, consider another Oneworld alliance member like American Airlines AAdvantage, Alaska Mileage Plan or Iberia Plus. These programs offer plenty of flights to Europe and beyond that, you can book without incurring fuel surcharges. 

You’ll see taxes and fees on flight bookings, but even hotels sometimes charge resort fees on award bookings. For example, the Ritz-Carlton Reserve Dorado Beach in Puerto Rico carries a staggering $150 nightly resort fee per room. So, even if you save money by redeeming points, you’ll still be on the hook for hundreds of dollars in resort fees. 

These expenses can add up substantially over a long trip, especially if you’re booking multiple rooms or flights. The best option is avoiding loyalty programs with high taxes and fees. If you can’t avoid it, you can also use points and miles to offset award taxes and fees. 

Remember those transferable rewards we mentioned? This is yet another scenario where their flexibility comes into play. Nearly all the transferable rewards outlined in this guide can be converted to cashback. You can redeem these points for statement credits towards travel purchases or virtually any other expense. The exact rate will vary by currency, but with most of these programs, you simply charge travel to your card and then redeem points toward the expense:

  • American Express Membership Rewards*: 0.6 cents per point
  • Capital One miles: 1 cent per mile
  • Chase Ultimate Rewards: 1 cent per point
  • Citi ThankYou points: 1 cent per point

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Hotel restaurant with moody lighting and swanky booths
The Great Northern Hotel, Marriott in London © Marriott

Research discounted awards and transfer bonuses

While it can be difficult to predict award pricing with some airlines and hotel loyalty programs, you can save substantially by factoring discounted awards into your budget. Both airline and hotel loyalty programs offer discounts on award bookings and run periodic sales. You can save as much as 50% by taking advantage of these bonuses. Here’s a rundown of discounted awards you should consider 

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Off-peak flight and hotel awards

Some loyalty programs offer discounts on award flights when you travel off-peak. These awards can help you stretch your travel budget further or earn fewer miles to begin with. All Nippon Airways (ANA), American Airlines, Aer Lingus, British Airways, Iberia and Virgin Atlantic all offer cheaper off-peak pricing. Meanwhile, Hyatt and Marriott provide discounts of up to 46% when you redeem points during off-peak dates.

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Suite at Hotel 50 Bowery, New York City
Suite at Hotel 50 Bowery, New York City © Chris Dong / The Points Guy

Consecutive night discounts

You can save up to 25% of your hotel points by booking consecutive nights with your points. Three major hotel chains offer the fourth or fifth night free: Hilton Honors, IHG One and Marriott Bonvoy. Hilton’s fifth night free is open to Hilton Honors Silver elite members and above who book their stay entirely with points. IHG’s fourth night free is available to all IHG credit card holders when redeeming IHG points for award stays of four nights or longer, while Marriott offers a fifth free night to all Marriott Bonvoy members that pay for five consecutive nights at the same hotel with Marriott Bonvoy® Points.

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Keep on the lookout for award sales

Award sales can help you stretch your point travel budget much further. Two loyalty programs routinely run discounted award sales: Air France and KLM’s joint Flying Blue program and Delta SkyMiles Flying Blue’s Promo Rewards offer discounts of up to 50%, while Delta SkyMiles Award Deals can offer even greater bargains. While you can’t plan your travel around these award sales, they can provide you the opportunity to save points if you’re flexible with your travel dates.

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The beach of Albufeira Algarve Portugal
Travel on a budget with your favorite companion; the beach of Albufeira Algarve Portugal © fokke baarssen / Shutterstock

Companion passes

Companion passes are a great way to stretch your points and travel budget further. Several airlines offer passes that allow you to book a companion’s flight for just the cost of taxes and fees. You can earn most of these passes through credit cards and most are valid on paid flights rather than award bookings. Regardless of which one you choose, you can stretch your travel budget further with these companion passes:

  • Alaska Airlines Famous Companion Fare: Get a $99 Companion Fare (plus taxes and fees from $23) each account anniversary after spending $6000 within the prior anniversary year on the Alaska Airlines Visa® Credit Card. The Famous Companion Fare is valid for round-trip economy flights on Alaska Airlines.
  • American Airlines Companion Certificate: Earn a Companion Certificate after spending $20,000 on the AAdvantage® Aviator® Red World Elite Mastercard® or $30,000 on the AAdvantage® Aviator Business Mastercard. You can earn the American Airlines Companion Certificate annually and it’s valid on round-trip economy tickets within the US operated by American, Compass Airlines, Envoy Air, Mesa, PSA Airlines, Piedmont Airlines, Republic and SkyWest flights. You’ll need to pay $99 plus taxes and it can be booked on any flight operated by
  • British Airways Travel Together Ticket: After spending $30,000 a year on the British Airways Visa Signature Card, you’ll earn a Travel Together Ticket valid on a companion’s award ticket or 50% off your own. The Travel Together Ticket is only valid on British Airways flights departing from the US
  • Delta Air Lines Companion Pass: Delta issues a Companion Pass through four different credit cards. The one by the Delta SkyMiles® Platinum American Express Card* and Delta SkyMiles® Platinum Business American Express Card* is only valid on domestic economy class tickets. The one from the Delta SkyMiles® Reserve American Express Card* and Delta SkyMiles® Reserve Business American Express Card* can be used for first-class tickets.
  • Southwest Companion Pass: The Southwest Companion Pass lets you bring a companion on any flight for just the cost of taxes. You need to complete 100 one-way flights or 135,000 points to earn it. The points earned on the Southwest credit cards (including the welcome bonuses) count towards this requirement. Once you qualify, the Companion Pass is valid for the remainder of the calendar year when the benefit was earned and the following year.

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Hiking the cliffs of Cornwall, United Kingdom
Hiking the cliffs of Cornwall, United Kingdom © Peter Cade / Getty

Get help from family members

Making a travel budget with just one person earning points can be immensely challenging. There are limits on the number of credit cards you can get and ways you can actually earn points. That’s why it’s so important to get family members involved. It can pay off greatly to take a few minutes and explain your travel budget goals to your family and get them involved in earning miles. 

Add your significant other as an authorized user to your credit card so you can power-charge your point-earning abilities. You’ll earn rewards for every dollar they spend and you can track your household spending in one place. The best part? Most credit cards don’t charge you for adding an authorized user. Some even offer you bonus points for adding an authorized user, an excellent incentive to expand your award travel budget further. 

Even the kids can contribute by using shopping portals to earn bonus points online. There are plenty of ways to earn points and miles without a credit card. By exploring these options and getting family members to pitch in, you can expand your travel budget further.

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La Sagrada Familia in Barcelona
La Sagrada Familia in Barcelona © AzmanL / Getty

Bottom line

Making a travel budget with points and miles can be overwhelming for first-timers, but once you get the hang of it, it’s immensely rewarding. With careful planning and research into loyalty programs, travelers can easily stretch their travel budgets further by leveraging airline miles, hotel points and transferable rewards. 

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*Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit to learn more.

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities

This article was first published August 2023 and updated February 2024

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