The numbers have been run. The data has been collated. The jumbo-sized bag of Doritos has been emptied and licked clean. (Ew.) We’ve come up with objective mile valuations for the major US-based airlines, British Airways, and the rewards programs of American Express, Chase, and Starwood. Now that the Great and Powerful Canuck has finished his point studies, the obvious question presents itself – just what the heck was the point of all this, anyway?
As I’ve mentioned before, the values I’ve derived contain objective information only – nothing subjective has been considered yet. In other words, the computer has spit out its logical recommendation, but it’s not the ultimate decision-making authority. You have to consider your personal preferences, and your gut instinct. Much the same way that Captain Kirk had Mr. Spock making cold, fact-based assessments on one side of him, while Dr. McCoy ranted and raved about the “human factor” on the other, you have to take the results of every value calculation with a heaping help of Reality Check. Let me give you a few real-world examples of how I’d use my numbers.
The US Airways Dividend Miles program has annoying fees, “iffy” customer service, and it can be difficult to make changes to an award after you’ve booked it. But I find great value in collecting US Airways miles and redeeming them for Star Alliance awards, to take summertime “special” vacations with my sweetie pie. Let’s say that I had 232,000 Dividend Miles in my account – that sounds like two romantic round-trip tickets in business class to La Belle France for us! (Ah, mah pigeon, let us stoke zee furnace of love together … le kiss, le smooch …)
But then I notice that US Airways is running a 100% Buy-Miles promotion. And I get to thinking: it might be nice to buy a few more miles and swank it up in first class. With US Airways miles on sale for half off, their price comes down to 1.88125 cents apiece, after tax. Since I value Dividend Miles at 2.98 cents apiece, this seems like a no-brainer!
But now it’s time to talk to your gut. Okay, to upgrade this vacation from business to first, I’ll need to buy 18,000 additional Dividend Miles. Under the promotion, this will set me back a total of $338.62. Is that a good deal? Bumping up two Biz-class tickets to first class in real life might cost me an extra five thousand smackers. So it’s worth it. But is it worth it? Is the first class seat and service worth an additional $338.62 to me? Wouldn’t I rather spend that money, wining and dining my honey at a fancy restaurant on the Champs-Elysees? In the end, I decided to spring for the first class seats. We can always share a Royale with cheese at Chez Ronalde.
Now let’s consider another scenario, involving American Express and Virgin Atlantic. Some time ago, American Express ran a 35% bonus promotion for transfers of Membership Rewards points to the Virgin Atlantic Flying Club program. Personally, I don’t find Virgin Atlantic miles especially interesting; there’s no easy way to use them from Denver, and the awards come with downright nasty squeal-like-a-pig fuel surcharges. But, a-ha, Flying Club miles can be transferred to the Hilton HHonors program at a 2-for-1 ratio! By using Virgin Atlantic as a middleman, I could transfer some of my American Express points to my Hilton HHonors account, and get a 270% transfer bonus!
So is this worth it? First, it helps to know something about HHonors points. Over the years, Hilton has devalued their currency almost as much as Zimbabwe has. While I haven’t run my own numbers yet for hotel programs, I checked some other miles blogs, and assigned a value of 0.7 cents to a Hilton HHonors point. Now, would I rather have 10,000 American Express points, or 27,000 HHonors points? The AmEx points are worth 10,000 x 1.67 = $167.00; the Hilton points are worth 27,000 x 0.70 = $189.00. The transfer looks like it’s worth it … barely.
In real life, I decided to sit this one out, and I left my American Express points right where they were. The promotion didn’t prove to be as lucrative as it might have appeared at first glance; plus, I already had a bumper crop of cheap Hilton points in the pipeline from a couple of credit card bonuses.
It just goes to show that no matter how convincing Spock’s argument is, sometimes you’ve just gotta go with your inner McCoy. (Dammit, Jim, I’m a doctor, not a calculator!)
Footnote: No, I didn’t really take my lady to a Parisian McDonald’s. Quel horreur! Momma didn’t raise no fool.
Chase Sapphire Preferred® Card
- Annual Fee: $95 fee waived for the first year
- Foreign Fees: No
- Card Type: Bank
The Sapphire Preferred offers 2x points on dining and travel, and no foreign transaction fees, making this the go-to card for travelers.
This card accumulates Ultimate Rewards points, which are very valuable for transfer to United and Hyatt. Overall, this card is a great choice for maximizing earnings on dining, travel, and every day spend.
- Earn 40,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $500 in travel when you redeem through Chase Ultimate RewardsSM
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening.
- 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases
- No foreign transaction fees, plus Chip and Signature enabled for international travel.
- 1:1 point transfer to leading frequent travel programs at full value — that means 1,000 Ultimate Rewards points equal 1,000 partner miles/points.
- 24/7 direct access to dedicated customer service specialists
- Introductory Annual Fee of $0 the first year, then $95