Points, Miles & Credit Cards

# How Much are Points and Miles Worth?

When you’re booking travel with credit card points and airline miles, it’s not always obvious if you’re getting the best deal for your points.

Whatever the case may be, it’s important to know how to determine the value you’re getting out of your points when you use them to pay for flights. This guide shows you how to calculate cents per point in order to determine how much points are worth in a specific redemption.

Of course, some of this is subjective and up for debate—some people care about flying comfortably in the front of the plane; others just want to travel as often and as cheaply as possible. But this formula will help you be more confident about how you spend your rewards.

## How to calculate the value of points

To find how much mileage your points are getting you, we need to find the cents per point (CPP), i.e. the cash value of a point when it’s used to book a flight instead of paying for that flight using actual money.

To figure that out, we need to go back to algebra class and do a little math. Here’s the formula:

Cents per point = [(Cash price of the flight – the taxes and fees to be paid in cash for an award booking) / the cost in miles] x 100

When we’re talking about numbers and values, math is inevitably going to be involved. Sorry! Rest assured, however, this formula is straightforward and will help you better understand how credit card points and airline miles work—and what counts as a good value redemption for you.

## Cents per point example

To put that into practice, let’s look at a real-world example: Earlier this year, I booked a flight from Athens to New York via Munich, traveling in Lufthansa first class—a ticket that would have cost me \$7,717 had I paid in cash or with a credit card.

Instead, I booked the trip with points through Aeroplan, the airline loyalty program of Air Canada, which is a Star Alliance partner of Lufthansa. The ticket was priced at 100,000 Aeroplan points and about \$150 in taxes and fees.

To determine how much value I’d get by redeeming those 100,000 points, I plugged in all the numbers into the cents per point formula, like so:

[(7717 – 150) / 100,000] x 100 = CPP

Let’s walk through the math together:

Since I had to pay the taxes and fees in cash anyway (costs that are baked into the full price of the ticket), I subtracted that \$150 from the \$7,717 price. \$7,717 – \$150 = \$7,567

Next, I wanted to use points to pay for that remaining amount, so I divided \$7,567 by 100,000, the number of points required. That yields a number that represents how much of that cost is covered by an individual point. \$7,567 / 100,000 points = \$0.07567 per 1 point, or \$0.076, rounded up.

Finally, the easy part: To turn that weird number into a cent value (I mean, who really says “zero-point-zero-seven-six dollars”?), I multiplied the numeral by 100. \$0.076 x 100 = 7.6¢

That means, in this redemption, we’re getting a value of 7.6¢ per point. That’s a fantastic use of points, especially when you consider that credit card points are only worth 1¢ to 1.5¢ when redeemed through the travel portals at Chase, American Express, Capital One, and Citibank.

## When not to redeem points or miles

Here’s another scenario: You want to get from New York to London in business class on March 12. You find a one-way ticket for a Delta One seat on Delta flight 1 between JFK and LHR that costs \$1,910.

To book that flight with points, you go over to the Delta site, log into your Delta SkyMiles account, and search for that flight. The points cost? 375,000 SkyMiles and \$6 in taxes and fees. Let’s do the math.

[(1910 – 6) / 375,000] x 100 = 0.5¢

In this redemption, those SkyMiles are worth only 0.5¢ per point. Yikes! That’s less than a penny!

If you’re trying to use your stash of SkyMiles, you get better value by taking that flight in economy. The cash price for a Main Cabin ticket would be \$517, whereas the points cost would be 66,000 SkyMiles and \$6 in taxes and fees. Here’s that math:

[(517 – 6) / 66,000] x 100 = 0.77¢

That value of 0.77¢ per point is still atrocious, but still more than what you’d get for the redemption in Delta One; in this scenario, a single award for a one-way flight in business class is worth at least five (5!) one-way tickets in economy. And if what you have are Delta SkyMiles, then you’re limited to the pricing that’s available directly through Delta.

This is also why I recommend prioritizing credit card points, which you can transfer to different airlines, over earning miles directly with airlines themselves. You have more flexibility with credit card points.

For example, you can transfer points from American Express to Delta to make this redemption, sure, but your Amex points could get you further if you transferred them to another program like Air France Flying Blue.

## What is a good redemption?

This formula comes in handy when deciding if something is a “good” redemption, it helps to know how to calculate the value of points.

In general, you’ll want to aim for redemptions of 2 cents or greater. Points and miles geeks estimate each credit card point to be worth about two cents, so you’d want your redemptions to be worth at least that much—if not even more.

If our benchmark is 2 cents per point, then a redemption at nearly 7.6 cents per point is an excellent deal!

And if there’s a transfer bonus running, you’ll need to redeem fewer miles for this same ticket, meaning that the value from your points will be even higher.

Honestly, if my teacher told me solving for X gets me a free flight, middle school math class would have been a lot more fun!

## Other ways to value points and miles

The math I’ve shared with you is not a hard-and-fast rule for traveling with points, but it is a tool that can empower you to make travel choices more confidently in this wide, wild world of points and miles.

That said, math isn't the only way to value you your points and miles.

Here are some other ways to think about their value:

• Experience: Points and miles can allow you to enjoy business class for much less than paying cash for a ticket in a premium cabin.
• Nearly free travel:  You can experience another adventure without breaking your bank account.
• Last-minute flights: You could book flights with points and miles fairly late and not pay the exorbitant prices you typically see for last-minute cash fares.

Ultimately, the question you have to ask yourself is: Does this points redemption allow me to take a trip I wouldn’t be able to otherwise?

Published September 6, 2023

Last updated June 14, 2024

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