Get Started

Learn more about Credit Cards, Travel Programs, Deals, and more.

What Are Points Really Worth? The Four Great Debates, Part 4

This post may contain affiliate links - Advertiser Disclosure. As an Amazon Associate, we earn from qualifying purchases.

What Are Points Really Worth?

What Are Points Really Worth?

Three weeks ago I kicked off a 4 part series that discusses four of the most hotly debated topics in the travel hacking community. This week I would like to discuss if there should be minimum redemptions for award travel.

My goal is to offer up both sides of the argument and then have a civil discussion about it in the comments section.  The last three weeks have been amazing and I can not thank the readers who commented enough…you guys are great!  We had comments that swung on both sides of the argument, everyone was respectful, and everyone brought great points to the table.

The Four Topics

The four hot button topics that we will be discussing over the next month are:

  1. Opportunity Cost.
  2. Is Award Travel Really Free?
  3. The Value of Credit Card Airline and Incidental Credits.
  4.  Should There be a Minimum Redemption for Award Travel?

Should Points & Miles Have Minimum Redemption Valuations

You have seen the posts around the blogosphere putting a valuation on miles and points.  If you get 50,000 of these miles that is worth $1000 in travel etc.  We even do it here at Miles to Memories!

I have witnessed it in the comments sections of our Facebook group, on blog articles and on Flyertalk etc. where people are told they should use cash instead of points.  They are told it would be a bad redemption to use points.

FrequentMiler and TPG have monthly valuations that tell you what each point are worth. They update them as things changes, as transfer partners are added, as the rules of redemptions are changed etc.  The question is should we abide by these valuations?

The Common Thinking on Points Valuations

I would say the majority of people in our community believe that each point or mile has a minimum redemption valuation.  There is a value each point or mile has that they are not willing to go below.  They would rather use cash then use their points at that point.

The thinking is that each point should be maximized and only good redemptions should be used.  Save the points and miles for first class cabins and luxury hotels.  Spend your miles flying international in lie flat seats and pay cash for domestic travel.

There are blogs built around this concept.  They want you to have redemption envy.  Why use points and miles for that $250 domestic flight when you could be taking a shower while sipping Krug?

Maximizing any resource is a good idea and this is no different.  Anything you have of value you should try to get the best return possible when using/redeeming it.  But are we overvaluing our miles and points?  Are they worth anything sitting on the bench?

What Are Points Really Worth?

My Take

I think that point valuations should be used as a tool to help you in the decision process when booking award travel.  I don’t think these valuations should be used as religion though.  Everyone should have their own personal valuations but I would argue that they should be more towards the bottom of the spectrum. Unless there is a promo going or some ridiculous deal I am going to use points pretty much every time.  There are a few different reasons why I believe this is the best way to go.

Cash is King

Why am I going to use points almost every time?  Because points are more easily accrued than cash is. Banks are willing to give out 100,000 point sign up bonuses worth $2000 in travel but they usually limit cash bonuses to $500 or under.

Why do you think that is?  Because points are cheaper for them, they are less valuable than cash.  That $500 costs them $500 where 50,000 or 100,000 costs them less than that.  You may get $750 in value out of that 50,000 mile sign up but it cost the airline a fraction of that.  Sure they potentially lost $750 in revenue but what did that really cost them?

I can rack up a million miles and points in no time from sign up bonuses and increased spend.  Racking up the $20,000 that million points would be valued at would take a lot more effort.

Points Only Have Value If/When Used

If you sit around waiting on the perfect redemption you are losing value the longer you wait. Those miles and points are continuously depreciating in value.  If you are not able to find a redemption worthy of the point’s valuation then they have no value at all.  A resource is only valuable if you can use it to get something else.

In our Facebook group I see people asking what they can use some orphaned miles on or how can they easily keep them alive.  That means those miles have been sitting there for 2-3 years collecting dust.  If they are American Airlines miles, for example, imagine how much more valuable they were 2-3 years ago.  If they had used them for a middle of the road redemption then it is probably better than using them on a higher end redemption now.  Especially if they ended up spending cash instead of using the miles in the past.  That money could have been earning them interest instead of their miles continuously losing value in their account.

You may read a blog article that says a certain card has a sign up worth $800 etc.  That may entice you to sign up for the card but if you never use them then the sign up bonus wasn’t really worth anything.


I Have an Issue With the Valuation Process

One problem I have with the valuation process is putting a higher valuation on transferable currencies. Are transferable currencies like Membership Rewards and Ultimate rewards more desirable than an airlines miles?  Absolutely!  But are they worth more than the top transfer partner when you go to redeem them? No.

If the most valuable Ultimate Rewards partner is Hyatt, whose points are valued at 1.74 cents a piece by Frequent Milier, then how can UR points be valued at 1.82 cents?  The difference is even greater according to TPG, at 1.8 cents vs 2.1 cents per point. The points being transferable makes them more desirable but it I don’t think it makes their monetary value increase.

If the best redemption of the group is Hyatt then the value peaks with the valuation of Hyatt.  They are a more desirable currency than Hyatt points because you have more options but does that mean they have a higher minimum redemption?  What if you transfer them to Southwest where you can’t get more than 1.6 or 1.7 cents per point…how are you supposed to get 2.1 cents per point that way?  Where can you transfer your UR points to that you will be getting 2.1 cents per point on average on all redemptions?  There is no such transfer since Hyatt is the most valued transfer partner.

What Are Points Really Worth?

Bad Redemptions are Almost Always Avoidable

My final point is that you can usually work around “bad redemptions” by being diversified.  If the Hyatt room you are looking at is $200 a night but wants 20,000 Hyatt points that is a low value redemption. A better option is to use the Chase UR portal to book the room versus transferring them to Hyatt.  That would only cost you 16,000 points, instead of 20,000, at 1.25 cents per point.

Using the UR portal at 1.25 cents per point would be a bad redemption to most, since UR points are valued at close to 2 cents a piece. But, it was a better option between transferring them and using the UR portal.  You could go through the Citi ThankYou portal instead, if you value ThankYou points less.  That would also cost you 16,000 points but may be easier to swallow for some.  In another month you could use Flexperks points for the room at 1.5 cents per point, only needing 13,333 points.

I would have used the valuations during my decision making process but I still would redeem points with one of these options.

Another example I could offer from personal experience is from an upcoming flight to Atlanta I was researching.  Delta wants 24,000 miles for a one way flight.  The cash cost is $250. Most people would say pay cash for the flight.

I could transfer 24,000 MR points and book the flight or I could transfer 10,000 MR to Virgin Atlantic where the same flight is priced at 12,500 miles.  With Amex’s 30% transfer bonus to Virgin Atlantic I could save 14,000 miles going that route.

I used the valuations to help make the best decision.  But there is almost always a way to use points if you work at it hard enough.


While I don’t believe in “bad redemptions” so to speak I do think people should use valuations in their thought process.  I think most points should be valued near there min value.  So Chase Ultimate Reward points should be valued at 1.25 cents (1.5 cents if you have the CSR) because there is no reason to ever get less than that on a redemption since you have the UR portal etc.

If using the points gets you where you need to go then I say do it.  Just make sure you are using the best option for that particular redemption.  Using a portal instead of transferring to the hotel, or Virgin Atlantic miles to fly Delta are two examples of that.

Miles are much easier to accrue versus cash so I use them accordingly.  But I know I am probably in the minority here. I am curious to hear your take on it.  Let me know your thoughts in the comments section!

Thanks for being a part of this series and I hope to do some more series in the future!  Let me know if you have any good ideas or would like something discussed further in the comments section 🙂

Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.

Lower Spend - Chase Ink Business Preferred® 100K!

Chase Ink Business Preferred® is a powerful card that earns 3X Ultimate Rewards points in a broad range of business categories on the first $150K in spend per year. Right now earn 100K Chase Ultimate Rewards points after $15K $8K spend in the first 3 months with a $95 annual fee.

Learn more about this card and its features!

Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Mark Ostermann
Mark Ostermann
Mark Ostermann is a father, husband and miles/points fanatic. He left the corporate world after starting a family in order to be a stay at home dad. Mark is constantly looking at ways to save money and stay within budget while also taking awesome vacations with his family. When he isn't caring for his family or taking a weekend trip, Mark is working towards his goal of visiting every Major League Baseball ballpark.

Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.


  1. My vote for 5th myth is whether miles/points are worth less than they were in the past. Seems counterintuitive but I bet there can be several arguments put forth to argue against that “fact”.

  2. Yes, FM certainly does. I just had started my postings assuming TPG’s valuations as the benchmark.

    The value of Starwood/Hilton/Hyatt/Marriott points are very close to what their rooms price out at. I do not see a premium assigned for their transferability to airlines, car rental agencies, special events, etc. because they mostly all offer them (like all transferable currencies offer transfer partners & travel/shopping/dining portals).

    If point systems haven’t historically handed out premiums for transferability with other programs, why even start with MR, TU, & UR? Their points still only ultimately buy what they can buy.

  3. I’ve enjoyed reading these posts and generally agree with you. As to value of points, there are many variables here. The biggest determining factor to me is how much you have in savings. Those who are rolling in $ can afford to cherry pick, most normal folks can’t. That’s my biggest issue with valuing UR points at 1.8 cents apiece or some other ridiculous number. For some, it makes sense, sure. Brian at TPG is obviously not hurting for money (no sarcasm), so yeah, he may want to hang on to his UR points for a first-class redemption down the road. We are a middle-class family, so my money situation is very different.
    Another factor is how often one travels. If you are fairly certain that you will burn your points at a more favorable rate in a few months, then perhaps it’s best to pay cash right now. When we are talking years, it’s probably best to just go for that “bird in a hand.” It’s not an exact science, that’s for sure.

    • Great point Leana – especially that last part…not an exact science. Everyone’s personal situation will affect how their decision making process.

      Thanks for reading and the comment!

      • By the same token, I would like to see the “UR transfer premium” included with your 5th Myth post if you decide to run it. I find the uptick to be a personal preference of partners that should either be applied evenly across the board of all transferable currencies or left entirely out of the equation, pls see my comments above. Thank you

  4. Good stuff and I’ve enjoyed reading the four parts. I am sorry there is no Part 5 to look forward to next week! Thank you for the articles!

    • A 5th part is becoming more likely. Pam offered up a good idea. We shall see if it has some legs though.

      Thanks for reading and commenting Scott!

  5. While I definitely agree bloggers overestimate point/mile values (obviously to promote the cards), I disagree that flexible points are only worth what their transfer points are worth. If I valued Hyatt at 1.6c and UA at 1.5c, I would still put UR at something like 1.7. You value Hyatt more than any other UR partner, but wouldn’t you still rather have UR than Hyatt? You said yourself cash is king and would rather use points that cash; so if you normally use UR for hyatt but want to book a Star Alliance flight, wouldn’t you want the option of having United miles even if you value them less than Hyatt points?

    • Dave see my comment above – I struggled with that point. They are more collectible and they allow you to cherry pick the best redemptions from partners. I guess I just think they are overvalued by most…

      By far my weakest point of the article.

      Thanks for the comment!!

    • If URs are assigned a much-higher-than-underlying transfer-program value because of their portability, then Thank You’s & MRs should be, too. The factor should be level across the playing field wheras TPG now scews transferability in URs factor over other transferable currencies.

      If then the UR transfer premium is because of “better” partners, then that is subjective to the consumer and not only the most valuable use of the underlying partners. I personally would like to see justification how 1.8 Hyatt rewards increases to 2.2 if all I was going to ever use URs for was Hyatt anyway! TPG values AMEX MRs at 1.9 & Virgin America miles at 2.4, but Virgin America miles are only worth 2 within the MR program (2.4 x 2 = 4.8/2.4 = 2). That is a 5% premium for MRs transferability vs UR’s 46%..why? Asia – Etihad miles are worth 1.4, but TUs are worth 1.5, only a 7% increase.

  6. Using TPG values (assuming they are the “gold standard”) for UR hotel partners, I find when I price out rooms that TPG’s stated values are relatively accurate and stable (i.e. a Category 4 standard Hyatt room usually prices out right around $270 or 15,000 points x .018). My purchasing power will never really be much more than a point’s stated value unless a promotion, invitation, or deal comes along. That can be one good reason to hold onto hotel points. Rather than spending 15,000 points on a standard hotel room now (and I am pretty certain this will be the same in 3 months), I could possibly use the same points along with a slight upcharge later towards a suite or boutique area within a hotel. That flies in the face of certain hotel point devaluation, but I have nevertheless been presented with opportunities for much better hotel values in the future and was glad I had “saved” my points.

    I think airline miles, however, are less precise and predictable. They change dramatically and intraday. The time value of money principle tells us that money available at the present time is worth more than the same amount in the future due to its future earning capacity. This is one of the areas where I agree with you, Mark – that it can make better economic sense to use depreciating points now and hold onto your appreciating cash position as long as possible when buying airline tickets. There is too much uncertainty with airline pricing, and it can often times be safer to “lock-in” (with the potential to change later) a fair deal with miles now rather than risk a ridiculous future price/miles increase.

    People who have a huge amount of points/miles and those who have minor accounts both seem to be extra careful with spending them. Perhaps those who have more… simply have more… because they are hoarding rather than spending. And those who have less are going to be very careful before letting any of their hard-earned points go unless they represent a very good value to them. It is those in the middle category who I think present a more balanced approach to spend vs. save and are more lenient with pulling the trigger on point usage.

    We discussed Opportunity Cost in Week 1 and concluded they are phantom expenses that aid in decision making that should not be treated as actual accounting costs. There is an opportunity cost with selecting and using transferrable currencies. I could spend my CSR at 1.5 now in the Chase portal on a sure thing, for instance, vs transferring them later and potentially saving more than that on a room or flight.

    By selecting a card like the CSR that offers a transferable currency (vs a co-branded card), I agree a premium should NOT be placed on its valuation for the transferability element. Having transfer partners went into my decision making in acquiring the card to begin with, and though it is certainly convenient and efficient to have multiple programs available within one platform, my actual benefit caps out at either 1.5 or the value assigned to each individual program. My net result would be the same as running each of the 11 programs separately on its own, albeit most people relegate their purchases to only a few of those when left to their own devices. Assigning a 46% increase in value for mainly portability reasons (2.2 – 1.5/1.5) is, at minimum, a gross exaggeration. Because of this, I asked TPG to defend their assigned 2.2 in their November valuation, but…no response.

    Points are less valuable than cash to companies who issue them because the assumption is consumer breakage with points and Chase, for example, doesn’t have to pay up until URs are actually transferred to a partner. Their float is superior to paying for points/miles monthly with a co-branded card. Cardholders will typically hold onto points longer than redeeming a cash bonus. I mean, does anyone actually let Discover bank their quarterly 5% cash back, interest-free, for very long?!

    Thought-provoking series, Mark – thanks for taking the initiative to break down the elements that others merely gloss over to the consumer’s detriment. I hope you will do a post soon on a 5th Great Myth – “Every Cardholder Should Start Their Portfolio with a CSR/CSP!” Best to you and your family this holiday season.

  7. — Understanding of MR/UR/TY, round about redemption (booking DAL flights with VX miles) and cash booking and which airports to book from is usually a good approach.

    — Business class from YVR and YYZ are usually much cheaper. And every couple of months we end up getting some pretty good fare sale from certain airports.

    — Outside of signup bonuses, spending on airline specific cards usually is a low return strategy.

  8. I agree in general, and actually was talking someone through the idea that “points not spent have 0 value”. The value of a point is how much you can use it for. If you have no use for a 5 cent/mi redemption in business class, because you travel with family and you’ll never earn enough miles to fly more than yourself in J, then the value of those points is whatever you can use them to fly your family for.

    But I think where I disagree is whether transferable points can be worth more than the top partner. They can, for 2 reasons.

    1. A points “valuation” should be an average of redemptions. I recently booked an AA flight last minute, and got about 4 cents/mi; also, the cash price for our economy flight to Hawaii next year is now cheaper, and the redemption is about 1.5 cents/mile. I would value AA miles at the average I could redeem them for (minus some amount for devaluation and availability risk). So if I value them at a hypothetical 1.8 cents/mile, it would be due to all the options involved.

    2. Transferable points give you more chances to redeem for maximum value. If that Hawaii flight is 1.5 cents/mi on AA, but I can use fewer miles elsewhere and thus get 2 cents/mi, then I’d do that instead. Or, to think of it another way, I could use the same number of transferable points for a better redemption on another partner instead. So I am measuring the transferable currency not against some absolute value of the top partner, but against an average of the best possible redemptions through all partners. Make sense?

    • If I am being honest I almost pulled that section out because I was internally debating over it. And it was mainly because of what you say in point #2 – transferable points allow you to cherry pick the best redemptions from each partner’s award chart. There is value in that for sure. I think it leads people to valuing their transferable currencies a little more than they should though. They may resist using them at Southwest because they think they need to get 2 cents a piece for them etc. I guess that is more the point I was trying to make. Collect transferable first but don’t be afraid to use them.

      Thanks for the great comment! You were able to put what I was thinking into words better than I could 🙂

  9. Cash is King – I totally agree. I earn points to spend points. Spending points allow me to spend my cash on experiences during the trip. I can always earn more points so I spend them. The only reason I would not spend the points is if I have another trip coming up very soon that I want them for. Points loose value to often to keep them – so I spend them.


Please enter your comment!
Please enter your name here