When you should pay a hotel stay with cash, when with points

To redeem or not to redeem – here are six scenarios that will guide you to the right decision

Stephanie Zito
Travel and cards writer
Travel expert who writes the "Have Cards, Will Travel" column for CreditCards.com

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You’ve got your favorite hotel credit card in your wallet, and your rewards points balance is adding up. But how do you decide when it is worth redeeming your points on a free night or just go ahead and pay cash for a hotel room? 

You aren’t alone in this dilemma. I love earning points on my World of Hyatt Credit Card, yet even as a seasoned points user, I sometimes still struggle when it comes time to spend them. I just hate to see them go!

I’m always calculating and recalculating to ensure I’ll get the best value when I use my reward points for hotel bookings. While nothing beats a free hotel night for saving money, when I don’t think the value is good enough, I make myself dish out the cash to pay for the room.

While what you consider good value may be different from mine, here are some principles to help guide you as you make your own decisions.

See related: 7 hotel rewards mistakes you should avoid

3 reasons you should pay for a hotel room (and keep your points)

1. The room rate is cheap

When the going rate of a hotel night is inexpensive and you’re just spending a night or two, it’s usually not worth spending your hotel points.

I typically consider anything under $100 on my “cash” list, but you can set your own dollar limit according to your budget.

If you really hate paying for anything, just remember, you’ll most likely be earning additional points from these paid nights on whichever reward card you use to book the room.

2. Someone else is paying (or it’s a business write-off)

The sweetest hotel nights for any bargain lover are the nights when someone else is reimbursing you for the bill – cha ching!

If you’ve got a benefactor – for example, your boss – paying, keep your points in the bank and use these golden opportunities to use your card to earn points and elite night credits.

If you have your own business, you’re most likely the boss and more concerned with budget, yet it’s still wise to pay for hotel nights when you travel for work or pay for your employees.

You can write off the expense for travel, but you can’t write off the points stay. Save your points for your much-needed vacation from work.

See related: Using personal credit card for work expenses: 8 tips

3. The cash copay equals more than the cash price

One of my favorite ways to get value out of hotel points is to take advantage of cash-and-points offerings – you pay for part of the stay with points (usually half), and then cover the remainder with a cash copay.

In most cases, cash-and-points rates allow you to stretch your points further while paying a minimum.

Sometimes, however, especially during slow seasons, the cash copay can actually be close to the same price or higher than the actual room rate – so pay attention.

In this case, you’d literally be throwing your points away by not just paying dollars for the room.

I typically consider anything under $100 on my “pay here” list, but you can set your own dollar limit according to your budget.

3 occasions to use your points for a hotel stay (and save your dollars)

1. You’re saving a lot of money

The best value for using your hotel points for a free stay is when you’re booking a very expensive room.

In redeeming my World of Hyatt points over the years, I’ve stayed at hotels that would have cost nearly $1,000 or more per night.

I always use points for these stays. Even though I love beautiful hotels – especially those with fancy bathtubs – my actual budget would never allow me to pay $1,000 a night for a hotel room.

For me, points make these high-end luxury experiences accessible.

2. The fifth night free benefit

In addition to booking a pricey hotel, using points is also the wise choice when you’re planning to stay a number of nights in one place.

If you’re staying five nights at a hotel that runs a reasonable rate of $200, you’ll still be facing a sizable bill at the end of your stay.

Points can offer a big value here – even if it is a low-category property. Additionally, several chains such as Hilton and Marriott offer a fifth night free benefit on award nights.

This means that if you pay for four nights with points, you’ll get to stay a fifth night for no additional cost – points or dollars.

Whether your stay is a high value resort, like the time I got a fifth night free at the Hilton Conrad in the Maldives or just need to sleep a number of nights in a midrange property, you’ll get good value from points use if you’re able to lock in that bonus night for free.

3. Safety and convenience

Believe it or not, the value of points is not just about money – it’s also about having the freedom to choose safety and convenience in your accommodation even when it comes with a higher price tag.

While I won’t often justify paying extra dollars to stay in the city center or at the more expensive on-airport hotel, being able to use points to make these choices levels the playing field.

When I’m traveling solo and arriving late at night or flying out very early, I will use points to stay in the most convenient, albeit most often more expensive, location.

Let your points work for you

It’s all about learning what is of greatest value to you, and letting your points work for you.

If your points are enabling the travel you dream about, you’ll never make a poor decision about when to redeem points and when to pay.

Stay tuned! Next time, we’ll talk about how to choose between using your miles or spending your money when you need to get a plane ticket.


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Updated: 12-18-2018