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Use your airline rewards for more than seats

Put extra points towards hotels, car rentals, gifts

By  |  Published: March 14, 2017

Cashing In
Cashing In columnist Tony Mecia
Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. He writes "Cashing In," a weekly column about credit card rewards programs, for CreditCards.com

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Question Dear Cashing In,
Can I use American AAdvantage miles to purchase anything other than air travel, such as hotels, car rental, resorts, etc. If not, can I transfer miles to any other credit card that does permit such uses? – Joe

Answer Dear Joe,
When it comes to using reward points and miles, airline frequent flier programs tend to have the least flexibility compared with other rewards.

Sure, you can redeem them for flights in probably thousands of different ways. Airline partnerships with other airlines mean that you are not limited to just the airline on which you have frequent flier miles. In the case of American, for instance, you can use the miles for flights on international OneWorld partners such as British Airways and Qantas.

Now, redeeming for flights could cost you a lot of miles. Airlines restrict the number of seats they make available at the lowest mileage levels. Cashing in miles for flights at the lowest levels probably represents the best value in redeeming miles.

There are other options to redeem airline miles, but they tend to offer an inferior value.

In the case of American Airlines miles, the possibilities include redeeming then for hotel stays, rental cars, vacation packages, newspapers or magazine subscriptions, gift cards, flight upgrades and airport lounge membership. If you examine these offers a little more in depth, though, you will see that the value at redemption is not so great.

For instance, let’s look at hotel redemptions. Searching for hotel bookings for a night in Chicago in mid-April, the American Airlines site returns dozens of choices. One of them is the Hilton Garden Inn Chicago (North Loop) for 26,100 American miles. Book that same room through Hilton, and the cost is $199. That works out to a little less than 0.8 cents per mile. For about that same number of miles, you could probably book a domestic round-trip on American that costs $300 or $400, which would be a much better value.

But if you would rather spend those miles on hotels, rental cars or something else, there’s nothing wrong with that. To see your options, go to the American Airlines site, click on AAdvantage and then “Redeem miles.”

Just know that in general, you usually receive the best value from redeeming points or miles with the company that offers the cards. American Airlines miles can be more valuable when redeeming with American than with Hilton, just as Hilton points can be more valuable when redeeming with Hilton than with some other company.

With airline cards and miles, you do have options. However, they are limited when compared with other types of reward cards. Programs with more flexibility include the points programs operated by major banks and generic travel reward cards that can be used for virtually any travel purchase.

Of course, the most flexible rewards are with the cards that offer cash.

See related: 7 ways to get the most from rewards credit cards, Limits to using airline miles

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Updated: 08-18-2017

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