1. Introduction
This article explores how to calculate the value of airline miles, hotel points, and bank points, providing insights into maximizing your travel rewards.
2. Calculating the Value of Airline Miles
The value of airline miles can differ significantly based on how you earn and redeem them. For instance, using an airline credit card without a bonus category means you are spending $1 per mile. Conversely, if you purchase items in a bonus category yielding two miles per dollar, that becomes just 50 cents per mile. Moreover, the value of these miles can change based on how they are redeemed.
When evaluating how much value you derive from each mile, divide the cash price of a flight by the mileage cost. For example, a $13,500 first-class ticket may require 135,000 miles, equating to 10 cents per mile, compared to a mere 1 cent per mile for a 25,000-mile, $250 economy ticket.
Consequently, aiming for a redemption value above 1.5 cents per mile in major U.S. frequent flyer programs is advisable. With strategic planning, travelers can often achieve even higher values.
3. Calculating the Value of Hotel Points
Hotel points also hold considerable value and are earned similarly through stays and credit cards. For example, a night at the St. Regis in New York City might cost $695 or 30,000 Starpoints, offering a value of 2.3 cents per point. In contrast, stays at the Grand Hyatt or JW Marriott yield lower value at just under 1 cent per point.
This variance indicates that while Starpoints may appear more valuable, they can convert into Marriott Rewards points at a one-to-three ratio, potentially offering greater overall value for strategic planners.
Consulting resources like The Points Guy can further assist travelers in understanding hotel point redemption targets, with values frequently ranging from 0.5 to over 2 cents per point.
4. Calculating the Value of Bank Points
Bank points provide a clear valuation method. Each of the major issuing banks—American Express, Chase, and Citi—allows points to be used for travel bookings through their portals. In most cases, American Express Membership Rewards can be valued at one cent per point. However, looking into transfer options often yields better results.
Chase Ultimate Rewards points vary in cash value depending on the card held, offering up to 1.5 cents per point for premium cardholders. Similarly, Citi ThankYou Points can range from one cent to 1.25 cents based on the card you have, making it essential to assess transfer partners before utilizing points.
5. Tools for Points and Miles Calculation
Several impactful tools assist in evaluating points and miles to ensure optimal value. Notably, ExpertFlyer.com is excellent for finding award seats and calculating value; however, it comes with a subscription fee. Additional tools include:
- Seat 17A “Should I” Calculator: Helps users determine whether to use points or pay cash.
- Miles.biz: A simple yet effective calculator for comparing flight costs across several programs.
6. Getting Started with Points and Miles
For those new to collecting points and miles, starting with cash-back credit cards or bank points programs is advisable. These methods provide fixed redemption rates, simplifying decisions about when to redeem points. As travel preferences become clearer, expanding to additional points programs can enhance earning potential and lead to exciting travel opportunities.
