How much are my points and miles worth?

At a glance#

What value means for a point#

A point has no price, only an outcome. While it sits in an account it is a claim against a programme that sets the redemption terms itself and can change them at any time. Only the booking turns that claim into a saving, and only then can anybody say what the point produced.

The timing gives the number its most important property: it looks backwards. The value you calculate belongs to the redemption it came from. A second booking in the same programme, on the same route, two months later, can produce an entirely different value without the programme changing anything.

The usual unit is cents per point, and it turns up in almost every card comparison as if it were a fixed rate. It is the opposite of a rate. It is the result of one booking, calculated from three numbers: two of them appear on the confirmation, and the third has to be estimated with care. Take that estimate seriously and no published valuation is needed; take it lightly and any valuation will produce a figure that reads well and saves nothing.

The calculation and its three inputs#

The formula is a division, and its entire difficulty sits in the numbers you feed it:

Value per point = (comparison price minus co-payment) divided by points handed over

Multiply by 100 to read it in cents. All three inputs look harmless, and every one of them can be chosen so that the desired answer appears. That is why each deserves a separate look.

The comparison price is the price you would have paid#

The comparison price carries the whole calculation and is the only input where fooling yourself costs money. The correct figure is what you would have spent had the points not existed: same route, same cabin, same travel dates, same change conditions, taxes and fees included.

The incorrect figure is the highest fare a website displays. Anyone entering a business class seat at four thousand units while they would have flown economy without points produces a value with no saving behind it. The arithmetic is sound and the result is useless, because the alternative was never on the table.

Put plainly, the question is: what amount would I have transferred for this trip? That number is sometimes uncomfortably low. It is still the right one, because the only money ever saved is money you would otherwise have spent.

The co-payment is everything still charged#

An award ticket is rarely free. Taxes, airport fees, in some programmes a carrier surcharge, at short notice a close-in booking fee: everything charged on top of the points belongs in this input, and in full.

A co-payment is money you spend despite the redemption, so it reduces the amount the points saved you. Leaving it out measures the value of the booking, which is a different thing from the value of the points.

In programmes with high surcharges this input decides the result on its own. The same award can be worth twice as much with an airline that levies no surcharges as with one that does, even though both charge the same number of points.

The divisor is what leaves your account#

Divide by the points you hand over. In a redemption made directly inside a programme that is the award price. In a redemption funded from a bank currency it is the number leaving the bank account, not the number arriving after a transfer bonus.

The difference is not pedantry. A bonus raises the miles credited and costs you only the ones transferred. Dividing by the larger number removes the bonus from the result and punishes you for the better deal. How the transfer itself works is set out in How a points transfer works.

Points you still hold do not belong in the divisor either. The account balance plays no part in this calculation, only the stake does.

Worked example: two redemptions, one yardstick#

The example uses one programme and one long-haul route. Economy costs 30,000 points and 120 USD in co-payment against a cash fare of 480 USD; business class costs 90,000 points and 260 USD against a cash fare of 2,400 USD. Both cash prices are assumptions for the calculation, not measured market prices.

Business wins that comparison comfortably, and that is where the trap sits. The 2.38 assumes you would have paid 2,400 USD for that flight. Anybody who would not has saved no 2,140 USD; they have spent 140 USD more than the economy redemption and received a more comfortable flight for it.

The comparison only becomes fair once both rows use the same comparison price, namely the one you would really have paid. Enter 480 USD in both rows and the result flips: the business redemption costs three times the points for a smaller saving.

Both readings are correct and they answer different questions. The first says how much value the programme releases. The second says how much money stays in your account. The decision rests on the second.

Why published valuations are not your number#

Point valuations by programme are published widely. Those tables are averages over redemptions somebody else considers typical, often weighted towards premium cabins because that is where the highest values appear. Your travel habits do not enter that weighting.

A conflict of interest sits behind many of them as well. A high published valuation makes every welcome bonus look larger, and welcome bonuses are what such publishers are paid to promote. The number is not wrong for that reason, but nobody chose it neutrally.

Published values remain useful as a range rather than a rate. Knowing that a programme usually returns between one and two cents per point makes a redemption far below that range recognisable as a bad deal on sight. For a decision between two concrete bookings, only your own calculation will do.

Your threshold, the only number you really need#

Beside the value of a redemption sits a second number, and it is the more practical one: the rate at which you can dispose of points with no effort at all. Many programmes and banks take points back as a statement credit or a travel voucher, at a fixed and usually unattractive rate.

The buy-back rate is your threshold. Any redemption below it is worse than the most convenient route available. Any redemption above it earns the effort. The question of whether a value is good in the abstract disappears, and a yes-or-no decision remains that takes a minute.

The threshold also explains why a programme with dynamic award pricing is harder to judge than a fixed award chart: when the award price follows the cash price, the value per point barely moves, and the choice between points and cash becomes a formality.

What still shifts the value after booking#

The calculated value is a snapshot of the booking day, and three events can still move it.

The cash price falls. If the fare for the same flight drops after your award booking, the saving your points produced drops retroactively. For the decision already made that changes nothing; for the next one it does, because redeeming early repeatedly means paying a premium in points for planning certainty.

The booking is cancelled. Many programmes refund points for a fee, and that fee is the price of the option to change your mind. Award tickets are often more generous here than cash fares, an advantage that appears in no valuation because it is not in the price.

The programme devalues. An increase in award prices lowers the value of every point still sitting in the account, immediately and without notice, while the value of an already issued award is untouched. A large balance is therefore not a saving, it is an open risk, as devaluations show.

When it is not worth calculating#

In these situations the calculation is not worth the effort, because the decision is the same whatever the number says:

• Small balances. With a few thousand points the amounts at stake do not justify half an hour of research. The most convenient redemption is the right one here.
• No flexibility in destination or date. A traveller tied to one date and one route usually has no choice between redemptions at all. Availability decides, not value per point.
• Points about to expire. Before an expiry any redemption beats none. A weak value beats a balance falling to zero, which is why do miles expire is the more urgent question in that situation.
• A card balance carrying interest. Interest costs more than the best redemption returns. That calculation beats any point valuation, and by a wide margin.
• When collecting itself costs money. Through annual fees or through spending you would not otherwise have done, the value per point becomes the wrong question altogether, and when collecting points is not worth it takes that case apart at length.

The most common mistakes#

• Using the wished-for price as the comparison price. Write down what you would have spent without points before you search, and calculate with that number afterwards.
• Forgetting the co-payment. Every amount still charged despite the redemption comes off the saving, the small fees included.
• Dividing by the balance instead of the stake. Only what leaves the account this one time belongs in the divisor.
• Adopting a published programme value as your own rate. A published value is a range at best, and your own booking still needs its own calculation.
• Confusing a high value with a good decision. A spectacular figure means little until you check whether the assumed cash price would ever have been paid.
• Treating the value as a property of the programme. A programme has no value, only a range, and devaluations move that range without warning.

Related topics#

• How a points transfer works
• Why the same award costs twice as much tomorrow
• When is a transfer bonus worth taking?
• Points or cash: how do you decide?
• Do miles expire, and how do you stop it?
• When is collecting points not worth the effort?