Mellody's Math: Frequent Flier Benefits

If you are like most people, your frequent flier mileage and other affinity reward balances are likely on the rise. In fact, according to InsideFlyer.com, there are over 7.8 trillion miles in current liability among all frequent flier programs. If you are having a difficult time planning a vacation with those miles or unsure how to spend your reward points, there are options besides letting them go unused.

  Keep unused points from stacking up.

According to Frequentflier.com, members of frequent-traveler programs with airlines, hotels, credit card companies and other affinity programs earn more than 650 billion miles and points annually. However, approximately 75 percent of the rewards are never redeemed! As such, similar to balancing your checkbook every month, make sure to open all of your reward statements and verify the point balance at least twice a year. Keep in mind, sometimes these points expire, so keeping a careful watch is a must.

  Calculate the currency of your miles.

While frequent flier miles are not worth much in terms of real dollars, they still represent a monetary value greater than many countries' currencies. Companies, such as credit card issuers, can purchase miles from airlines for 1 cent to 2.5 cents a mile. Frequent fliers can purchase miles from many airlines as long as they are members of their mileage programs. United Airlines, for example, allows its Mileage Plus members to purchase up to 25,000 Mileage Plus miles per calendar year for $696.88, which includes applicable taxes and a $25 per transaction processing fee. That comes out to about 2.8 cents per mile.

  Mellody's Math:

To figure out how much a mile is worth, divide the ticket fare by the number of miles you would need to accumulate to earn a free ticket. If you use 25,000 miles for a domestic ticket that costs $250, it would be the equivalent of spending $700 (25,000 miles divided by 2.8 cents per mile). Therefore, you would be "spending" two times the amount of miles for the price of the ticket.