I am fairly new to points however I have 200k points on my AMEX Explorer Card I wish to use for Return Flights for 4 people between Melbourne and the Goldcoast in September.
When I search using Virgin’s website for points+pay each flight is 16100 velocity points. The same flights are $109 inc tax.
So Total is 128,800 Velocity points (16100x8) or $872.00 ($109*8).
128,800 Velocity points = 171,734 Amex Gateway points (Explorer Card 4:3)
$872.00 = 117,720 Amex Gateway points if I pay with points. (13,500 = $100)
So its much cheaper to pay with points. Everything I had read on this website and others say that paying with points is always the worst way to use points. So what am I doing wrong in my calculations?
The cost of 16100 for one flight is a points+pay rate where you pay the points for the flight and also use points to pay for the taxes (points for flight + points for taxes). If you pay the taxes ($25.52) and the points for the flight speraretely, it is 11800 Velocity Points + $25.52.
Total for the flights would be 94,400 Velocity points (11800x8) and $204.16 (25.52 x 8).
The normal tickets would be $872 so your points are worth $667.84 ($872 - 204.16) giving you a value of 0.7 cents per Velocity point pr 0.5 cents per Gateway point, which is quite bad value for Velocity points.
Using points + pay would yield around 0.7 cents of value per Gateway point, so yes using points + pay is better value, but that doesn’t mean you should use it. Instead, due to the cheap fare, you should buy it with cash and redeem this either for business class or a more expensive flight in the future. That’s why PointsHack also recommends you redeem points for business and first class for the best value.
Excellent, thanks so much for your reply. Looking at it from a cents per point really helps and thanks for validating that I wasn’t doing something silly with my calculations.
I lean towards a reward realised being better than a possible future reward especially with the de-valuation in April.
Interestingly Amex Travel also has the flights for the same price so I can use my $400 travel voucher and pay the rest with points from there.