Award Valuation

We often work hard to earn enough points and/or miles to finally redeem for award travel. Sometimes these award trips are ambitious round-the-world adventures and other times they could be short trips to visit family. No matter what the redemption we always ask ourselves the question, “Am I getting enough value out of my points?”

To help answer this question the award travel uses a standard metric of cents per point (cpp). The basic equation for cents per point is:

Opportunity Cost being the points/miles which would have been earned from a cash redemption

While the formula is pretty simple, agreement on what a “good” cpp value is not. However, there are some guidelines. Generally the worst case most points can be redeemed for at least 1 cpp as cash back or statement credits. For travel, cards like the Chase Sapphire Reserve (CSR) allow cardholders to redeem Ultimate Rewards (UR) through the Chase Travel portal for 1.5cpp. Many bloggers and industry professionals value transferrable points such as Chase UR and American Express Membership Rewards (MR) at about 2cpp when leveraging the right transfer partners. Of course with anything in this pursuit, your mileage may vary (YMMV).

Regardless of what you think your points are worth you should be able to quickly calculate the cpp of your redemption. For that purpose we have created a handy online calculator to assist.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s