At what point you should redeem your miles? Well, a little math never hurt anyone.Your mileage may vary, but it all boils down to a few key factors to figure out if it's worth your while to cash in or to front the cash.
To get to heart of the matter, the first thing you should figure out is how many miles you would otherwise be earning if you paid for the flight and how many miles it takes to redeem a trip. When you redeem a trip, you lose more than the miles it takes to cash in on the reward, but you also lose the miles you would earn toward another flight or toward status. It's a hidden sunk cost, so it isn't as simple as jetting off to Florida without a care in the world sometimes.
Epinions user jeautk01 has some timeless advice regarding that, conjuring up a relatively simple formula. As an example, let's say you're going to earn 1,924 miles between Chicago O'Hare and Houston International roundtrip. Likewise, it would cost 25,000 miles to fly the same route. Adding the two numbers together, the total cost of your trip would be 26,924 miles. That number then needs to be multiplied against the worth of a frequent flyer mile at 1.4 cents.1When we finish the equation, we arrive at $376.93.
The number you arrive will be the marker price that will help distinguish whether a flight is a good deal or not. If the actual flight cost is higher than what you get, it might be wise to cash in those miles. That mean if the flight costs less than that amount, you should just buy it. If it costs more, redeem it.
The basic formula looks something like this:
[mileage to redeem ticket + mileage earned on a paid ticket] x [value of a mile]
or
[mileage to redeem ticket + mileage earned on a paid ticket] x .0014
Of course, this is a good basic rule of thumb for most redemptions and doesn't include every scenario. If you're obsessed, it may be worth looking into this guide composed by Milevalue. How deep do you want to go?
