Planning a trip? Here’s how your unused credit card reward points could help pay for flights and hotels

For many cardholders, those points eventually go towards shopping vouchers, merchandise or statement credits. But for people planning a trip, they could potentially be used to reduce the cost of flights and hotel stays instead.

The catch is that not all redemptions offer the same value.

A reward point does not have a universal rupee value. What 10,000 points can buy depends largely on the credit card issuer, the redemption option and, in some cases, the airline or hotel loyalty programme involved.

How to use the credit card points for travel?

The simpler option is to book directly through the credit card issuer's travel platform, if the card provides one. Cardholders can search for flights or hotels and use their accumulated points to offset some or all of the booking cost. Depending on the card, it may also be possible to combine points with cash.

The convenience is obvious. There is no need to understand airline mileage programmes or hunt separately for award seats. But convenience does not always mean the best deal.

Before redeeming points, travellers should calculate what they are actually getting in return. For example, if 10,000 points reduce the cost of a ticket by ₹5,000, the redemption value is 50 paise per point. If the same number of points can reduce another booking by ₹10,000, the value of each point has effectively doubled. The number of points in an account, therefore, tells only part of the story. What matters is what those points can buy.

The second option can be more rewarding, but it requires more planning.

Some credit cards allow customers to transfer reward points to airline frequent-flyer programmes or hotel loyalty programmes. The points are converted into airline miles or hotel points, which can then be used to make award bookings.

This can be particularly useful when cash fares are expensive but an award seat is available. Premium international flights and costly hotel stays are often among the situations where travellers may find better value through loyalty programme transfers.

Check availability before transferring the points

Transfers to airline and hotel loyalty programmes are generally irreversible. A traveller who transfers thousands of points before confirming an award seat could end up holding airline miles that cannot immediately be used for the intended trip. The conversion ratio also matters. One credit card point does not necessarily translate into one airline mile or one hotel point.

Travellers should also be wary of calling an award booking “free”. Flights booked with miles can still involve taxes, fees and other charges. The final cash amount should be compared with the price of buying the ticket outright.

For a cheap domestic flight, using a large number of points may not always make financial sense. Saving those points for a more expensive journey could offer better value. The same principle applies to hotel stays: compare the cash room rate with the number of points required before assuming a redemption is automatically a bargain.

There are other details worth checking too. Reward points can expire, while transferred airline miles and hotel points are governed by the rules of the relevant loyalty programme.

Most importantly, earning points should not become a reason to spend more.

Buying things you do not need simply to collect rewards can quickly defeat the purpose, particularly if the spending results in unpaid credit card balances and interest charges. The best travel rewards are earned from expenses that would have happened anyway.

For travellers sitting on a growing balance of points, the first step is simple: check what they are worth before clicking redeem. The right booking could pay for a meaningful part of the next trip. The wrong one could turn thousands of points into surprisingly little.