Have Cards, Will Travel

Coronavirus: When to use your reward points and when to pay cash

With so many deals, you probably can't go wrong either way


Many hotels are offering rock-bottom rates to entice customers. Here’s how to decide whether you should pay cash for your stay or book with points.

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Choosing whether to use your rewards points to book a hotel night or to pay for the stay at the hotel’s cash rate is a question that all reward travelers have likely asked at some point. And in times of COVID-19 travel – when there are many deals, offers and rock-bottom rates to navigate – this is a question that is even more important to consider.

Pre-Covid, had someone asked me how I decide when to pay with cash vs. points, my answer was always straightforward. I use my hard-earned credit card rewards points when hotels are expensive or beyond my budget, and I pay for rooms outright when rates seem low.

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Now that travel (like the rest of the world) is topsy-turvy, there are a few more factors to consider. While not all hotels are offering low prices in the days of COVID, nearly every hotel group has some kind of deal on paid and points rates to lure travelers back – and there are definitely bargains to be found.

See related: New year, new adventures: Strategies for planning 2021 travel

Beyond the basic cost calculation, if you’re planning a trip and trying to decide if it’s better to pay with dollars or dip into your rewards points stash, here are some factors to consider:

When to book with points (and keep your cash):

You have more points than money to spend

If you are trying to be frugal about your vacation spending since the world’s financial situation still feels uncertain, book with points – especially if you’ve been racking up points on another spending this year. At the end of the day, free is free. If it’s a good deal to you and your situation, go ahead and use your points.

You can take advantage of a great promotion offer

As a way to incentivize people to start staying in long-empty hotels again, many of the big hotel groups are currently offering some kind of first quarter promotion for points stays. You rarely get a bonus or earn points when you pay with points in normal times, but these aren’t normal times. For example, Hyatt has offered a promotion to World of Hyatt Credit Card holders that gives a 10%-25% rebate on all points stays through February 2021 based on your elite status level. As a World of Hyatt Globalist and a credit card holder, I’m eligible for a 25% rebate. If a hotel award night costs 20,000 points, I get 5,000 points back after I check out.

You can grab a room at a reduced reward points rate

Just like it can be hard to pass up a paid rate when prices hit rock bottom, it can be hard to pass up using your points when hotels are offering reduced rates on points stays. Marriott Bonvoy’s current ‘PointSavers’ rates are some of the lowest rates I’ve seen since offered by the hotel group in years.

You receive an important benefit that only applies to award stays

Sometimes hotel special offers or benefits you receive from having elite status or holding the hotel chain’s co-branded credit card only apply when you pay for your stay with points. These benefits are most commonly waived resort fees and waived parking fees, which can save you a lot of extra cash.

Both Hilton and Hyatt waive hotel resort fees when you’re staying on a night paid for with points, for example. Likewise, as a Globalist elite at Hyatt, I can park for free if I’ve paid for my stay using points. Otherwise, it’s a $30-$50 parking charge added to the bill every day. Even if you land a cheap rate for a hotel room, these fees add up quickly over a few nights and can tip the balance toward using your points.

You’re staying at a domestic destination that COVID has made more popular

While most travel destinations have struggled due to COVID-19, some smaller and remote destinations have gained popularity as domestic road trips have increased their traffic. Many small independent hotels, boutique hotels, and bed-and-breakfasts can’t be booked through the big hotel chains but can be booked with points through flexible travel programs like Chase Ultimate Rewards and American Express Membership Rewards.

When to pay for your hotel stay with dollars (and save your points for later):

On the inverse side, there are also a handful of reasons you might choose to use your dollars instead of your points to pay for your stay. Consider these: 

You can grab a room at rock-bottom rates

Not all hotels are super cheap right now, but there are definitely some rock-bottom rates to be found. If you’re looking to book in a destination like Hawaii or New York, where thousands of hotels and room rates are normally prohibitively expensive, you might be surprised to find that booking a hotel in current times is pretty easy. When the Hyatt Place in Times Square is $72 a night or 20,000 points, you should definitely pay.

You can take advantage of a great promotion for earning bonus points on paid nights

When you pay for your hotel stay, you should always be earning points for each dollar added onto your hotel bill, but when there’s a good promotion to boost this earning, sometimes it can be too many points to pass up. Right now, both Marriott and Hyatt are offering exponential point bonuses on paid stays that can earn you up to 25 points back per dollar spent. You’ll definitely want to check these out and do the math yourself.

You receive an important benefit that only applies to paid stays

Just like there are benefits that only apply on award stays, there are sometimes benefits or offers that only apply to paid stays. For example, that same Globalist status that allows me to have free parking on award stays also allows me to confirm my room upgrade to a suite a certain number of times a year. The caveat here is that I must have a paid room in order to request the suite upgrade. If the suite is important enough (and the room isn’t a crazy price), I’ll pay for the stay – and look for a place to park my car for free on the street.

Bottom Line

Choosing whether you’re going to use your points or use your cash isn’t always an easy decision, but with so many offers and deals on the table these days, you’re likely to find yourself in a win-win situation whichever you choose.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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