No two points and miles programs are the same. The differences in points and miles provide you with options that allow you to receive an amazing value from the loyalty currency. At the same time, it can make picking the correct currency a daunting process. After all, you want to get the best value from your travel rewards.
I’m frequently asked which point or mile is the best, and my response is always: “It depends.” I quickly follow-up by asking a series of questions about travel habits and goals. Those responses help me figure out the best points and miles to help my inquisitive person achieve their goals.
The best point or mile is the one that gets you to your destination when you want, how you want and at a redemption that you feel is fair and equitable.
The redemption thresholds listed below are in line with how I like to redeem my points and miles. Before you read any further, I want to be very clear about a couple of things:
- The amounts and ideal redemption levels are not a true cash value or worth of points or miles, rather, they are the threshold at which I choose to make a booking using points or miles instead of paying cash.
- You need to set your own levels based on your travel habits and goals. If you like my guidelines, use it as a baseline. But please don’t use these numbers as a guaranteed value.
- My goal with points and miles focus on international business and first class travel with access to 3.5-star or higher hotels. I do travel domestically and use points and miles to offset those costs as well.
- In general, if I can receive an equivalent cash value listed or higher per point or mile, I’ll use those points or miles. If the equivalent value in cash paid would return less than the stated value, I would pay in cash (and I’d use my credit card to earn points and miles, of course).
- If you really don’t know what your goals are, stick to a 2 percent cash back credit card such as the Citi Double Cash. Cash is king and as long as you’re earning 2 percent on all your transactions, you’re doing okay. If you’re happy with taking 1.5 percent now and getting another 1.5 percent at the end of a year, pick up the Discover it Miles card (which is really a cash-back card in disguise) that’ll net you a 3 percent return for the first year.
A Quick, Simple Example
If I’m staying at an SPG property that is available at a cash rate of $110 per night (including all taxes/fees) or 7,000 SPG points, I’ll choose to pay cash. The reason behind this is I want to receive at least 1.85 cents in equivalent value per point when deciding to use points instead of cash. For me to use SPG points for this specific hotel room, the rate (inclusive of all taxes and fees) would need to be $129.50 or more. Rates below $129.50 (7,000 points * 1.85 cents/point = $129.50) and I’ll save my SPG points for another redemption.
For reference, you can review previous valuations from 2014, summer 2015, fall 2015 and winter 2016. Those posts will also give you some further insight into the process of identifying a threshold to use points instead of paying cash.
Flexible Travel Rewards Points
Flexible travel rewards points are the most valuable points out there because they give you the most choices for redeeming your points. More options mean you have a better chance of getting the flights and hotel rooms you want at the best possible price. These points are the most coveted and if you focus on only earning these points, you’ll give yourself the most and best options available.
- American Express Membership Rewards – 1.65 cents/point
- Chase Ultimate Rewards – 1.7 cents/point
- Citi ThankYou Points – 1.55 cents/point
- Starwood Preferred Guest Points – 1.85 cents/point (There is no timeline of what will happen with SPG as a part of the Marriott acquisition. For now, continue to earn and redeem these points for excellent value)
With all of these programs, some of the best redemptions can be had by leveraging the transfer partners within each program.
In this valuation period, I’ve dropped my redemption levels on all flexible travel rewards points except for SPG points. SPG points are still the hardest to come by and while Chase has made it more difficult to be approved for Ultimate Rewards-earning cards they’re readily available and with the Freedom Unlimited card it’s now easier to earn with 1.5 Ultimate Rewards/dollar on this new card.
Hotel points provide flexibility to redeem for a hotel stay or to use any one of their airline and other transfer partners. Transfer ratios are not as good as you’ll get with flexible travel rewards points, but the sheer fact that the option exists with hotel points increases their value. Included are major hotel brands that have significant relationships with credit card issuers and fit into the brands of major hotels that match my travel goals.
- Hyatt – 1.5 cents/point
- Hilton – .5 cents/point
- Marriott – .6 cents/point
- Club Carlson – .4 cents/point
- IHG – .6 cents/point
- Starwood Preferred Guest – See Flexible Travel Rewards Points
Remember, all programs charge a different amount of points for each of their hotels and the award charts for each program vary. If you want to see what a given property will cost in points check out AwardMapper. A tip to get an exceedingly great value out of Marriott points is to check out the Hotel and Air packages where you can redeem your Marriott points in a manner similar to SPG nights and flights.
I’ve upped my redemption threshold with Hyatt as I’m finding that I’m not receiving value far in excess of my desired levels. Maybe I happen to be staying at expensive places on expensive nights, but with standard and cash + bookings available, I’m able to consistently get more than two cents/point value with my Hyatt redemptions.
These are points (miles) for an airline account. Unfortunately, airline miles are the least flexible of all travel rewards currencies, but it is important to keep in mind that when you have miles in an airline’s program, you can redeem them for flights on the airline and its partners. Just because an airline’s website doesn’t display all of their partners doesn’t mean you can’t use your miles to fly with them, some of the best value can be had with their partners!
Remember, Alaska, American, Delta, and United have zone-based award charts with flat rates that are not directly related to the actual cash price of a ticket. If you use miles with JetBlue or Southwest, the cost of the ticket directly correlates to the cash price of the ticket.
- Alaska Airlines – 1.7 cents/mile
- American Airlines, Delta Air Lines and United Airlines – 1.4 cents/mile
- JetBlue – 1.4 cents/point
- Southwest – 1.4 cents/point
I value Alaska miles so highly because of their great partner network and incredible redemption opportunities for premium cabin international travel.
Yes we saw some big changes in award charts recently. American Airlines completed their change at the end of March and we saw a big increase in the price of Emirates awards on Alaska Airlines, but I haven’t changed my thresholds for redemption with either of these airlines.
American still has great rates and Alaska added the ability to redeem with Hainan opens up more access to Asia as Hainan has flights from Boston, Chicago Los Angeles, San Jose and Seattle.
Bank Rewards Points
These are effectively cash back programs that don’t provide the ability to transfer points to other partners.
- Barclaycard Arrival Miles – 1.05 cents/point
- Capital One Venture Miles – 1.0 cents/point
- Discover it Miles – 1.0 cents/point
Here is a real world example from a trip I just completed to break down my decision on when I use points and when I use cash:
DoubleTree by Hilton Hotel Amsterdam Centraal Station, Netherlands (Four Nights)
- Cash cost (including all taxes and fees): 1,560 Euro ($1,777 USD)
- Points cost: 190,000 Hilton Honors Points (190,000 points for a 4-night Category 7 AXON award)
- Using points I have received .93 cents/point value (far above my desired .5 cent threshold), so I’m happy to use points.
Note: Had I used my Citi Prestige 4th night free benefit my out of pocket cost would have been $1,332.75 for four nights. Using points instead I would have received a .7 cent/point value — still higher than my threshold
||Citi Prestige® Card
Add to Favorites
$450 first year
$450 after first year
|40,000 Citi ThankYou points
After $4,000 in purchases made with your card in the first 3 months the account is open.
Read Review »
Already have this card? Track it and maximize your rewards.
Citi Prestige® Card
|Apply Now Add to Favorites|
|Read the FTG Review »|
In my example above the cost of the room was very expensive compared to the number of points required to complete the redemption. It is often easy to make a decision when the cash price of a room is expensive, however if the cost in points had been 2x what is was, redeeming those points would have provided a value below my desired threshold (half of what I received) and would have pushed me to pay cash instead.
Just because the cash price of a room is inexpensive doesn’t mean the best option is to pay cash and just because a room is expensive doesn’t mean that they best option is to use points. Always look at the value per point you’re receiving when you decide whether to pay with points, cash or a combination of both.
There are dozens of scenarios using specific credit cards and different points that could be reviewed to find the absolute best option, however in most cases a simple comparison of room cost in cash to room cost in points will work. Just remember to always add taxes and fees which, for the most part, are covered by a points redemption.
Whether booking airfare or hotels, you should always calculate how much value you’re getting from your points and decide what your thresholds are for redemption versus paying in cash. Don’t forget that when you’re earning points and miles if your rate of return is less than 2% you’re better off with a straight 2% cash back credit card that gives you the ultimate in flexibility.
If you have any questions about why I’ve assigned these thresholds, please don’t hesitate to send an email to [email protected]
How do you value your points and miles?
*Terms and restrictions apply.
[Image via Getty]
Delta® Reserve for Business
- Annual Fee: $450 fee
- Foreign Fees: No
- Card Type: Travel
Add to Favorites
- Earn 40,000 bonus miles and 10,000 MQMs after you spend $3,000 in purchases with your new Card in the first 3 months.†
- Earn 15,000 Medallion® Qualification Miles (MQMs) and 15,000 bonus miles after you reach $30,000 in eligible purchases on your Card in the calendar year.
- Earn 2 Miles per dollar spent on eligible purchases made directly with Delta. Earn 1 mile on every eligible dollar spent on purchases.
- Settle into your seat sooner with Priority Boarding and enjoy 20% savings on eligible in-flight purchases in the form of a statement credit.
- Pay no foreign transaction fees when you spend overseas.‡
- Complimentary Delta Sky Club® Access.‡
- Terms and limitations apply
- See Rates & Fees
Delta® Reserve for Business
- Annual Fee: $450 fee
- Foreign Fees: No
- Card Type: Travel
|FTG Review||Reward Breakdown||Points Breakdown|
Per dollar on eligible purchases with Delta Purchases
Already have this card? Maximize your rewards.