The true value of frequent flyer points. Are they worth chasing?
The average Australian is sitting on a balance of 73,000 frequent flyer points, according to a 2025 survey. About a quarter of those surveyed used their points for travel occasionally, but didn’t keep track of their balance, while 18% said they rarely redeemed them, and 15% didn’t understand how frequent flyer programs worked.
Clearly, there’s a lot of confusion about collecting points, using points and their true value. Let’s remedy that.
Collecting points
Although purchasing flights (and to a lesser extent hotel accommodation) is the traditional way to earn points, this only works well for regular business travellers. Most Australians accumulate points via credit card spending and other shopping, including converting Coles Flybuys and Woolworths Rewards Points into frequent flyer points.
However, credit cards with an elevated points earning rate usually have a high annual fee and an excessive interest rate on unpaid balances carried from month to month. Collecting points this way is only worthwhile if you clear your account balance in full every month.
There is one way to earn a lot of points quickly at a relatively low cost, by procuring tens of thousands of points as a sign-up bonus on a new credit card. But ongoing use of the new card comes with the same caveats discussed in the previous paragraph.
Using points
There are plenty of tempting ways to use frequent flyer points, but they are not all equally rewarding. Redeeming points for flights usually offers the best value, but the amount you obtain per point will fluctuate depending on the type of flight you choose.
Swapping your points for retail gift cards, hotel accommodation, car hire or merchandise from an online catalogue are all going to deliver a very low value.
Redemption value for flights
Generally speaking, the longer your reward flight or the better your seat, the more value you will get for your points. Here is a guide to possible values per Qantas Frequent Flyer point, based on recent calculations by a well-known comparison website:
- Domestic economy flights: 1.2-2.0 cents
- Domestic business flights: 1.8-3.5 cents
- International economy: 3.1 cents
- International premium economy: 4.8 cents
- International business: 8.8 cents
- International seat upgrades: 4.4-11.5 cents
And here are the figures for Virgin Australia Velocity points:
- Domestic economy flights: 0.9-1.5 cents
- Domestic business flights: 1.6-3.5 cents
- International economy: 1.0-1.8 cents
- International business: 1.6-5.0 cents
- Seat upgrades: 2.1-3.1 cents
However, merely having points to redeem doesn’t mean that you will be able to secure a reward flight. Airlines release only a limited number of standard reward seats, and demand usually exceeds supply. Plan ahead and aim to get in early. Qantas, however, does now offer a larger number of Classic Plus Rewards seats, where your points are usually worth 1.0 cents in economy and 1.5 cents in other classes.
Redemption value for other uses
Retail gift cards, hotel accommodation, car hire and merchandise from online catalogues are always available for points redemption, but you will get a negligible value – between 0.4 and 0.7 cents for each one of your points – if you spend them this way.
So, are frequent flyer points worth chasing?
Frequent flyer points are not free. They are simply a rebate on the cost of your credit card annual fee, or the price you pay for goods at the supermarket and elsewhere. They are nice to have, but not particularly valuable unless you are prepared to spend a lot of time securing points bonuses and reward flights. Certainly, collect them if you were going to make the points-earning purchases anyway, but avoid carrying a balance on a points-earning credit card and choose your redemptions wisely.
Knowledge beyond investment returns
Although licensed financial advisers are experts in financial planning and investment, they can also help you with solutions to your more down-to-earth money queries like this one. Contact your adviser with your question, and prepare to be surprised at how much they know about everyday money matters.
The information provided in this article is general in nature only and does not constitute personal financial advice.
