How credit card travel rewards beat cashback

In the lockdown phase of the COVID-19 pandemic, the sensible thing to do with your credit-card rewards was to switch to cashback from travel points. The public-health challenge still lingers, but an easing of restrictions has now led to a travel boom.

For some help in getting up to speed on the latest developments in travel rewards, check out this e-mail Q&A I did with Barry Choi. Mr. Choi blogs at Money We Have, and he’s a top expert on travel and reward programs.

Some travel-reward programs are moving to a dynamic pricing model – can you give us some examples and an explanation of what this means for points redemptions?

Aeroplan and Marriott Bonvoy switched to fully dynamic pricing, and Air Miles is doing it, too. That’s where the number of points required for redemptions will depend on supply and demand. More popular flights, hotels and times will cost you more points than those that have less interest.

From a consumer’s perspective, you just need to study the programs to see where you benefit the most. For example, with Aeroplan, switching your date or time of the flight could save you a fair amount of points. Aeroplan also has a fixed redemption chart for partner airlines, where the number of points required for a flight is significantly lower than the high end of dynamic pricing on Air Canada flights.

Cashback rewards were popular during the pandemic lockdowns – how do you compare the value from cashback as opposed to travel rewards, where you use points for flights, hotels and such?

You need to establish a base price for your points first. To do this, you would take the cash price of your redemption and then subtract any taxes you need to pay when using points. You

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