3 Creative Uses for Frequent Flyer Miles

Cashing in on a free trip isn't your only option.

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My plans for traveling have been increasing recently, and I've decided to switch to a travel rewards credit card from a cash-back card. Although I pay my credit card bill in full every month, I can increase my frequent flyer balance each month and take advantage of several bonus miles offers.

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There is some risk involved with these rewards programs. The terms and conditions can change at any time. While it may cost 25,000 miles for a round-trip flight today, airlines slowly but surely reduce the value of their miles. Some miles might expire if not spent, as well. If travel is not in your near future, you may want to consider other ways to spend or use your miles.

Almost 90 percent of miles earned will never be redeemed. Take action now to be on the winning side of the arrangement. You get the biggest return for each mile by redeeming your balance for travel directly from your airline, but the next best options are using your miles through third parties.

Trade frequent flyer miles. Points.com lets frequent flyers trade points among 25 different airline loyalty programs. Use this website to exchange your points on one program for points on another or to arrange exchanges with other users. This is not a universal system, so you may find that you can't trade between programs you'd like. If you can trade between programs, you may find that the fees for doing so greatly reduce your effective conversion rate.

Give a gift. With the holidays coming up, now is a good time to redeem your miles for gifts. It pays to watch your prices, however. In one program, a redemption for a two-year-old high-end digital camera costs 100 miles plus $3,025, while you can find the same camera for sale at a reputable store online for the same price without any mile contribution.

Returning to Points.com, you can use your frequent flyer miles to buy gift cards. You can browse a variety of merchandise offers, and find the perfect holiday gift for a friend or relative.

Donate to charity. A number of charities accept miles as gifts. For example, Continental Airlines offers donations to March of Dimes, and the donations will provide transportation for representatives to travel worldwide providing health services pregnant women. This is a good way to put your miles to use.

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Regardless of what you decide to do with your frequent flyer miles, watch out for fees, whether they are hidden or overt. Even when booking reward travel, you'll need to pay a fee to the airline in addition to handing over your miles. If you redeem your miles at a hotel that has a partnership with your airline, you'll likely pay a fee, and there may be an additional fee embedded in the mileage cost.

If you wait too long, your frequent flyer miles may expire or the airlines might adjust their rules to decrease the value of what you've already earned. It's best to use the miles as soon as you can to reduce that risk. If you do collect miles, stick to your top one or two favorite or convenient airlines. Any more, and you will spread yourself too thin. While this might encourage a frequent flyer to remain loyal to an airline, keep in mind that the benefit of earning miles on one airline does not offset lower airfare on another airline.

Luke Landes writes for Consumerism Commentary, where he encourages discussions about money and consumer issues. Consumerism Commentary regularly tracks and reviews the best credit cards and other financial products