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Point Valuations (self.creditcards)

submitted 1 year ago* (last edited 1 year ago) by Cstrrider to c/creditcards

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So I am always curious to hear how folks value points in different reward systems. I think many of the card reviewers greatly overvalue points based on booking ridiculously overpriced international first class tickets at a fraction of the cost, but still 2x-3x or more what you would pay for an economy ticket. Here is how I would value the point systems I have had cards for:

Amex MR: 1.2 ¢/pt
- I generally will transfer points to domestic or international economy flights or to hotels when I can get at least 1 ¢/pt. The CS platinum sets a good minimum redemption rate.
Chase UR: 1.6 ¢/pt
- Assuming CSR. May get better rates for Hyatt and occasionally economy flights, but portal bonus/PYB set the minimum
Marriott Bonvoy: 0.67 ¢/pt
- Based on what I typically see scrolling through the site.
Hilton Honors: 0.5 ¢/pt
- Based on what I typically see scrolling through the site.
Hyatt: 1.67 ¢/pt
- Can be higher but the options are more limited.
Delta Miles: 1.2 ¢/pt
- Based on what I typically see scrolling through the site. Sometimes there are good deals on partner flights internationally.

That all said I mainly use the Amex trifecta because I can earn MR at a fast enough rate to make up for the lower valuation and I can use the credits effectively.

How do you value points?

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[–] thrawn 2 points 1 year ago* (last edited 1 year ago) (1 children)

I only redeem for high CPP, and find that I usually get around what the sites I’ve seen suggest. I don’t read card reviews, but while searching for good redemptions, I do see their estimates.

There are places and things I’ll do every year, some of which are good redemptions, others I pay normally instead and store the points for later. Then there are things I’ll do simply because they are good redemptions, and allows me to try things I might not think about otherwise. This is a good balance and leaves me with a ton of points in cases of emergencies.

There’s some level of inefficiency because points are devalued and sitting on hundreds of thousands of them can lead to value lost. At some level though, it’s too much to think about, so I just accept that.

[–] Cstrrider 2 points 1 year ago* (last edited 1 year ago) (1 children)

It really depends on what you want. For me, I would rather optimize point usage to minimize out of pocket costs to go places, either offsetting trips I have to do or enabling trips I want to do. I would rather pay for a decent resort ($150-$250 per night) and coach tickets with points and get 1-1.5 ¢/pt than pay the same total for business class tickets and pay for the hotel out of pocket but get 2 ¢/pt. Basically in calculating redemption rate I would use:

(Cost I would pay for the trip w/o a rewards card) / (points spent)

Instead of:

(Listed cost of the trip) / (points spent)

If your travel cards got cancelled and your points cashed out and you just had a flat 1.5% back card, would you pay for Business class or First class or would you save the money and fly coach for your next international trip? Not to mention the out of pocket cost for first class is greatly inflated because a large portion of first class tickets are going to people getting "outsized value" from redemptions and people paying cash rates likely simply don't care what they spend. It would be interesting to see what the average cost of first class tickets is assuming 1¢/pt for redemptions, but I am sure airlines don't publish that.

I am not judging someone for choosing to use their points to enable a more luxurious trip, but when valuing travel points I think its important to remember what you personally would have paid out of pocket instead of what the listed cost is.

[–] thrawn 1 points 1 year ago

Yeah point value depends so much on how you travel to begin with. In my case, I get more value from the points than you do, but I also pay more out of pocket and tank devalues far worse.

I wholeheartedly believe you should calculate based only on what you would have paid if points weren’t a concern. I do fly business, first, or room/D1/other “premium” options for international trips to begin with, depending on how much the upgrade to each class is, so I can calculate my point tickets like that. Otherwise I would do it exactly like you do, since yours is the smarter way for at least two reasons: since I don’t redeem for poor CPP I always have a surplus of points, and minimizing cost is wiser to begin with. I don’t think I play the points game correctly haha.