This is a guest post by reader Charles Newell, who has recently done some extensive research on redeeming travel rewards.

Much has been written on these pages about rewards cards but little with regard to what you can do with the rewards once you’ve got them.

In October of 2009 we switched from two CIBC Aeroplan Gold cards, that we used to accumulate Aeroplan points, to one RBC Avion card.

We decided that since neither of us was working it made sense to only have one reward credit card, save some fees and have one account.

Related: Best Travel Rewards Credit Cards

Avion Points

RBC offered 15,000 get started points for their Avion program so off we went with a card costing $170 per annum for the two of us.  It’s a Visa Infinite Avion Card.

We’ve now built up a total of about 98,000 points.  Avion allows you to book with any airline and 65,000 Avion points will buy an economy ticket price to anywhere in Europe costing up to $1,300.

The rest of our banking is with HSBC and we have an HSBC Premier MasterCard which is used by other family members for our family business.

It builds up points at the same rate as the Visa Avion card, one point for each dollar spent.

Related: Scotia Momentum Visa Infinite – Cash Back King In Canada

Redeeming Points: How Much Are You Really Saving?

We are planning on a trip to Europe from September 2nd to Dec 2nd.  We’ll start off in northern England, move to London then go to the South of France from London.

We decided to price out flights as follows:

Vancouver to Manchester returning to Vancouver from Paris, a multi-city or open jaw trip.  Using Lufthansa and 65,000 Avion points one ticket will cost $609.80.

Using the balance of the Avion points will reduce the single ticket cost to $276.90.

If we buy a second ticket to match it will cost $1840.80.  The base price is $1,231 and the balance is $609.80.  The 65,000 Avion points cover the $1,231 base price.

Related: How This Couple Spends Their Retirement Travelling

We found $1,840.80 a bit expensive so we decided to check out return flights to London.  Flights from Vancouver to London can be had from Air Canada via Calgary for $1,219 – that’s $622 less than the multi-city Lufthansa flight.

That cheaper flight booked through the RBC Rewards program costs $628.87 – that’s more than the expensive multi-city flights!

It’s because the base flight, which uses the 65,000 points, is only worth $590 – not $1,231 like the Lufthansa multi-city flight.

We also tried on a ticket starting in one city in Canada and returning to a different one, that is not eligible for the much touted $1,300.  Either you must come and go from the same place or just use the points at 10,000 point per $100.

That’s a huge variation in the value of those points – $590 to $1,231 – with up to $1,300 being available and being advertised.

Values are far less complicated with the HSBC program, where they simply compensate you at the rate of 10,000 points for every $125 spent.

Related: How To Profit From Loyalty Programs

The London return ticket would cost roughly 97,500 HSBC points.  Using all the Avion points (98,290) the same ticket comes in at $295.

RBC is not encouraging or rewarding cheap travel.  Avion points rewards are $100 for 10,000 points.

Avios Points

Avion also offers a conversion to British Airways Avios program.  That allows you to switch Avion points to British Airways Avios points.

There are occasionally bonus rewards offered.  I called Avios and asked what availability they had under their point system, and there was nothing for flights to London until the end of October.

Final Thoughts

So, in summary, if we choose the less expensive route, we will save money and Avion will save money.  We’ll save a few hundred dollars on the ticket price and they will only have to pay $590 instead of $1,231.

Related: Air Miles Travel – Redeeming For Flights

That free ticket cost $170 annually for the rewards cards.  $170* 4 = $680.  It’s that or buy an iPad mini with the points……also not worth that elusive $1,300.

What’s been your experience when it comes to redeeming travel rewards points?

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11 Comments

  1. Jordan on April 22, 2013 at 6:21 am

    How do these rewards stack up against cash back? It would take about 2 years to accumulate 65,000 points putting $2,500/month on the card – you’ve already paid $340 for the flight no?

  2. Michael on April 22, 2013 at 8:23 am

    Our experience has made us realize that loyalty points are worse than useless. We have always been able to find a flight cheaper than the rate being used by the ‘points’ programs. We have also always been able to find merchandise cheaper than it is available on the various programs.

    We are booking a holiday in Europe right now – our flights are going to cost 50% less than the figure used by the rewards programs. This differential makes you realize how little the points are actually worth.

    On top of which – we don’t have enough points to cover two people so the second will have to pay an exorbitant rate just so we can travel together.

    Most times the reward programs do not have the exact merchandise we are looking for (a specific camera model for example). This includes Air Miles which we are slowly disengaging from after they recently devalued them.

    That points to another problem with programs – they can change their rules at any time. Just to add to the misery, some of the programs have restrictions on their use.

    We used to collect Aeroplan points but then were advised that they would become void if we did not use them within a certain time period. So we lost them (and will never use Air Canada again if we can avoid it).

    These programs appear to operate with impunity and without regulation. Many of the ‘perks’ of airline programs cater to your ego – upgrades, use of airport lounge etc – certainly convenient but not worth the cost of being in the program from my point of view.

    We have moved to cash back cards. Give me the money and let ME decide how I will use it! Now all we need to do is get the credit cards companies to offer us the same kind of cash back cards they offer to their US customers.

  3. Bernie on April 22, 2013 at 11:57 am

    I refuse to pay a fee to use a credit card. I will stick with my President’s Choice Financial Mastercard!

  4. Bet Crooks on April 22, 2013 at 5:50 pm

    I’ve never been a believer in credit card “rewards.” We belong to Aeroplan but only use it when we buy Air Canada tickets. I’m not overly surprised by your findings. Once the reward programs became credit card related they seem to have lost all of their original purpose and value. (e.g. Aeroplan is no longer owned by Air Canada, etc.)

  5. SavingMentor on April 22, 2013 at 7:22 pm

    I’ve had great success with rewards program and gotten many almost free trips and flights out of them. I can’t go into all the details otherwise I would be writing pages on the subject, but I’ve gotten tons of nearly free flights and trips out of them.

    For the average Joe, they are mostly a waste of time. But if you know the rules and no how to play the game, then you can still get incredible value. Maximized travel rewards will beat cash rewards by a large margin any day even if you consider sale prices. However, finding sale prices can also be a lot of work (just like managing rewards) and you aren’t guaranteed to find a good sale anyway.

    • Jordan on April 22, 2013 at 8:40 pm

      Numbers please – comparison between typical cash back versus the value you got for the rewards. An example would be appreciated. There are a lot of anecdotal opinions out there. By my analysis – travel rewards rarely out-perform cash rewards when you compare, annual fees, inflated travel prices, having your cash sooner, actual rewards etc.

  6. Matt on April 22, 2013 at 7:43 pm

    I think part of the issue is that you are not planning your trip wisely. Starting in Northern England and ending up in Southern France is nice, but not great for flight routes from Western Canada.

    I live in Calgary and we have direct, regularly scheduled flights to Heathrow, Schiphol or Frankfurt. Best to skip Heathrow. Horrible place. I would pick your country of choice (not sure of duration of trip, however, but sounds short for what you are doing), fly direct to either Schiphol (Amsterdam is a great city) and then take the train to Paris. Do the same for Frankfurt. I can’t speak for flights from Vancouver, but I think you really need to plan your trip better in order to make the most of your budget.

  7. Carolyn on April 23, 2013 at 1:53 pm

    We have a TD First Class Travel Visa Infinite card.
    I love it, because the points are redeemable for dollars. Right now I have $100 worth that I can redeem on ANY travel. I redeemed $650 so far on travel this year, and $600 on travel last year. This is more than making up for the $120 fee right now. Also, travel medical insurance is included.
    If you book your travel through their Expedia site you get extra points and can redeem points without calling (I hate calling). If you call you can redeem points on any travel.
    I’m saying redeem points, but it’s just a statement credit for the $ amount that you’ve earned.

  8. David on April 24, 2013 at 1:05 pm

    I’ve looked at switching from my CIBC Aeroplan Visa a number of times but haven’t. The way I see it, it makes sense to go with the program that offers the maximum value per point, which I define as the percentage saved per dollar spent. The cash dividend cards seem to max out at 1.5-2% rewards (“up to” 2% means the average is likely to be a fair bit lower), and the Avion upper limit on what their points will cover likewise maxes at 2%, as in your example of $1300 for 65,000 points.

    Maybe I’ve been lucky, or maybe it’s my choice of destinations, but when I book flights with Aeroplan points, even after paying the various fees added on I am getting a value of 3-5% so for me it’s been worth it. (And if I can’t get at least 3% using points I tend to just buy the ticket instead.)

    Two examples from this past year: Ottawa-Dublin (3.3%) and Ottawa-Winnipeg (5.7%)

    YMMV.

  9. fraser on April 26, 2013 at 9:03 am

    Has anyone used Capital One Aspire World Travel Master Card?

    We are thinking of switching because of the high admin fees charged with each ticket redemption. We have been with Aeroplan ever since our CP/CAI points were moved over.

    Specifically, how are the redemptions? Easy to get your flights/dates? How about point costs and admin fees?

    thanks

  10. Jonathan on December 2, 2014 at 12:06 pm

    My girlfriend and I have been incredibly frustrated with RBC while trying to leverage travel rewards. She has accumulated 82k worth of points and would have liked to have rented a vehicle through this while in Costa Rica. The difficulty is that we can book it directly ourselves at a rate of $1200 while RBC is indicating the exact same vehicle, with the same rental firm at a rate of $2,000. Once the rewards have been factored in it negates any points that have been accumulated and we have found them to be less than helpful and very restrictive.

    At the same time as we were doing this we also leveraged my TD Travel rewards, a card that has the same value and fees as the RBC Avion, and had the costs of the flights immediately reduced with no restrictions and accomplished easily. Up to this point we have spent hours on the phone with RBC and while their representatives were friendly they have proven to be less than helpful. The RBC travel program is a complete waste of time and money and I highly advice against signing up and maintaining this card.

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