One question that we often get is, when should you use your miles or pay cash for flights?

In the case of airline miles, the decision depends on your valuation of those miles, and then it comes down to a bit of math. However, the answer is a lot more complicated when considering transferrable point currencies like Chase Ultimate Rewards®.

That's because Chase points are very flexible. You can transfer Ultimate Rewards® points to 11 airline and three hotel partners, or you can redeem points for travel through the Ultimate Rewards® portal. Alternatively, you can redeem points at an elevated rate for gift cards. Worst case, you can redeem points for cash back at 1 cent per point.

Whether you took advantage of an excellent sign-up bonus or have built your point balance over time, you'll want to use those points wisely. So, should Chase cardholders use points or cash to book flights? Let's review some aspects to consider when making that decision.

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Factors to consider

Your travel goals

When deciding between booking travel with Ultimate Rewards® points or paying out-of-pocket, consider what you want to get out of your points and miles.

In short, what is your main motivator for collecting travel rewards in the first place?

If your goal is to save money on travel, default to using your points whenever you can. If redeeming the points as airline miles via a transfer doesn't provide much value, book through the Ultimate Rewards® portal instead.

If your motivation is to travel in ways that you wouldn't pay cash for, consider saving your points to use for that next incredible experience.

Say that flying Singapore Airlines first class is on your travel bucket list. This isn't an experience that you want to book with cash. For example, a Singapore first-class flight from New York to Frankfurt costs $6,563. That same flight can be booked on points for just 86,000 KrisFlyer miles (an Ultimate Rewards® transfer partner) plus $5.60 in taxes and fees. That's a redemption rate of over 7.6 cents per mile.

For Chase Sapphire Reserve® holders, those 86,000 points are worth $1,290 when redeemed in the Ultimate Rewards® portal. That's still more than many may want to pay for a single flight.

So, make sure that you value the experience of sipping champagne in a private suite on Singapore Airlines at more than $1,290 before giving up the opportunity to use those points to book a lot of other travel.

How often you travel

If you jet off to a new destination each month, you'll want to be more strategic about when you use points versus paying out-of-pocket for flights. After all, you may be able to use your points at a higher redemption rate on your next trip. You may even build an upcoming trip to take advantage of a redemption sweet spot.