The $1100 secret: how to make your frequent flyer points cover your next flight

What if your next overseas flight or luxury hotel stay was essentially 'on the house'?

For a savvy group of Australians, that's not a daydream - it's a reality.

New data from Money.com.au reveals that frequent flyer points are shaving an average of $1140 off travel costs, with the top tier of points-earners saving upwards of $2000.

Whether it's a free seat in economy or a champagne toast in business class, the 'point' is clear: your loyalty can pay off in four-digit dividends - if you know the right tricks.

Money.com.au's finance expert, Sean Callery, said frequent flyer points could make a real dent in the cost of travel - but you need to watch out for those pesky card fees.

"For most Australians, saving in the four figures through frequent flyer points is a decent return and can effectively cover the cost of an adult plane ticket or thereabouts," Mr Callery said.

"The aim is to extract more value from points than you're paying in card fees."

Mark Trim, managing director of The Well Connected Traveller, said the worst value redemption is converting points to cash to pay for flights or accommodation at a low conversion rate (for example, 200:1).

"We've seen customers become frustrated with credit card point systems when they repeatedly make these low-value conversions," Mr Trim told Explore.

"The aim is to use points effectively for travel or significant savings, not as a direct cash equivalent. Making a plan for your travels in advance and using points for their intended high-value purpose is key to avoiding this frustration."

Another common mistake people make is using their points for retail items via the online frequent flyer shop,, but Mr Trim said this is a "terrible burn rate for your points".

He also advised against using "points + pay" options, given the high burn rate, unless you have an excessive balance to use up.

Using your points for domestic flights is generally a safe and good-value option with plenty of availability, Mr Trim said.

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But there is one way to use points that trumps all others.

"Wherever possible, saving frequent flyer points for coveted premium cabins is the most valuable use of the points," Mr Trim said.

"Using them for economy reward seats is okay, but the comparative value in a premium cabin is far greater compared to purchasing premium cabin seats."

Mr Trim's last piece of advice is for people with Qantas points.

If you have a huge balance of Qantas points, considering the occasional Classic Plus redemption "may be part of your strategy to open up more travel opportunities".

"Whereas those with a smaller balance would burn through their points much faster this way," he said.

"Classic Plus is best booked when paid airfare sales are also being marketed, as the rate is tied to the cash price of the airfare."