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What Are Points and Miles Worth? August Monthly Valuations

by on August 18, 2014 · 45 comments

in Mile and Point Value Series

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You can view all posts in the Monthly Valuation Series here.

One of the questions I’m asked most often is “how much is a point or mile worth?” That question varies from person to person and depends on how well you can maximize a particular currency for your needs. Still, some points are worth more than others.

How much are all those points and miles really worth?

How much are all those points and miles really worth?

To give readers – both old and new – some context, I’ve included my valuation of points from 2013 and from July, as well as explanations for any changes in value (like devaluations or new fees). There weren’t many definite changes in the last month, but the August list notes some programs like IHG and Ultimate Rewards that lost a little value, but not quite enough to show up in the chart. There’s plenty of other program related news, and I noted which credit cards out there can help you rack points up fastest, in case you decide you want to focus in on a loyalty currency you haven’t considered previously.

The Calculations
I’ll be honest, there isn’t a mathematical formula at work here. At some point I’d like to create a system that could calculate a precise value based on award availability, fees, award levels, and ease of accrual, but for now these valuations are based on a combination of how much I would pay to buy points if given the opportunity, and the overall value I could get from redeeming them.

I encourage you to share your thoughts where you think I’m off base (and on point, no pun intended), and I’ll take TPG reader feedback into consideration when I update the list next month. This list doesn’t include every currency under the sun, and I’ll work to add more moving forward, so let me know which you’d like to see featured.

PROGRAM 2013 (cents) July 2014   (cents) August 2014 (cents) What Changed/ News?
American Express Membership Rewards 1.9 1.8 1.8 Amex Centurion Lounge opens in New York LaGuardia. Amex Membership Rewards 25% JetBlue Transfer Bonus
Barclaycard Arrival Miles 0.5-1.1 0.5-1.1 0.5-1.1 Rising TSA fees add an attractive redemption option for fixed value points.
Capital One 1 1 1
Chase Ultimate Rewards 2.2 2.1 2.1 More changes to Ultimate Rewards, including portal earning and Pay Yourself Back feature.
Citi ThankYou 1.3 1.1 1.5 Added 8 new transfer partners, including one in each of the major airline alliances. Citi Prestige updated benefits.
FlexPerks 1.33-2 1.33-2 1.33-2
Aeroplan 1.9 1.6 1.6
Alaska 1.8 2 2
American 1.9 1.7 1.7 Partner Etihad announces new nonstop service between Abu Dhabi and SFO, DFW.Citi AAdvantage Reduced Mileage Awards for Cardholders
Avianca - 1.7 1.7 Announced program changes (i.e., devaluation) for October.
British Airways 1.6 1.7 1.7
Delta 1.5 1.2 1.2 Added free entertainment to domestic flights over 90 minutes. 50,000 sign-up bonus offers for Delta Amex cards.
Flying Blue 1.3 1.3 1.3 Announced 50% off Promo Awards for Oct.-Nov.
Frontier 1.3 1.2 1.2
JetBlue 1-1.3 1-1.7 1-1.7 Added Mint business class service with better returnsAlso, see American above.
Singapore Airlines 1.5 1.5 1.5
Southwest 1.8 1.4 1.4 50,000 point offer for Chase Rapid Rewards Premier card (personal) is still available.
United 2 1.5 1.5 50,000 mile offer for United Explorer card is back.
US Airways 1.8 1.9 1.9 Minor increases in award levels went into effect on August 1.
Virgin America 1.5-2.3 1.5-2.3 1.5-2.3
Virgin Atlantic 1.4 1.5 1.5
Club Carlson 0.7 0.6 0.6
Hilton 0.7 0.5 0.5 HHonors app adds Choose Your Own Room feature.
Hyatt 2 1.8 1.8
IHG 0.7 0.7 0.7 PointBreaks list is looking steadily less impressive. If this continues, value may fall.
Marriott 0.7 0.7 0.7 Announced plans to add Atlantis Resort and Casino to the Marriott Autograph Collection this fall.
Starwood 2.4 2.6 2.3 End of 50% transfer bonuses to American and US Airways.

Movers and Shakers
There wasn’t too much moving and shaking this month. The only change was a decrease in the value of Starpoints due to the end of their 50% transfer bonus promotions. There was also some lateral movement as several programs announced small changes that weren’t enough to alter point and mile values.

Starwood Preferred Guest June Value: 2.6 cents July Value: 2.4 cents Why it changed: the SPG program continues to offer huge value, and Starpoints remain my most highly valued loyalty currency, but part of last month’s valuation was based on some particularly lucrative promos that are no longer available, like the effective 50% transfer bonuses to American Airlines and US Airways. With those promos gone, the value of Starpoints has come back down from the stratosphere.
Associated Credit Cards: Starwood Preferred Guest Card from American ExpressStarwood Preferred Guest Business Card from American Express

Disclaimer: The responses below 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.

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  • evthu

    I just wanted to say thanks for writing this series. I read a lot of miles blogs and this is by far my most anticipated post each month. Really keeps me in the loop.

  • thepointsguy

    Glad you like it! Thanks :-)

  • iamright

    Southwest Airlines is way off. Just by using the points against the fares gives over 1.6 cents. You can use the points on EVERY flight, not just the oddballs that are posted by the airlines. The fares are usually lower than other airlines so you are saving money against a lower starting fare, not artificially higher ones at other airlines. Finally there is the companion fare which one can easily qualify for after getting two credit cards in a year. This can represent thousands of dollars if you travel with your partner.

    By showing the Southwest return lower than virtually every airline is totally illogical, unless ….. TPG would rather his readers sign up for other cards. Just a thought!!

  • josh f

    Nice monthly update. The only thing that seems off to me is arrival points, aren’t they worth 2.2? 2 for travel + 10% rebate.

  • Daniel

    I’ll never understand the hostility of some of the posters on here. He is doing all the research and leg work for us so that we can save money and time. What’s the harm in him making some money for that service by peddling a few referral links etc. We are all still coming out winners in the end.

  • Redpanda

    This is great! Please keep doing this every month; it helps me keep track of everything in one simple article. Thanks!

  • http://aaadventurephoto.com/ Alan

    This point value chart is strictly for redemption rates. You may earn 2 points for every dollar, but you redeem them at 1:1 (with the 10% kicker for travel).

    In other words, if you had 1000 points, they would be good for $10, all day every day.

  • Martin

    Who offers the best cash deal if you have Delta Skymiles and Chase Ultimate Reward Points to sell?

  • Chris

    What do you value Alaskan miles at? I think they are pretty high…if not the highest for airline miles.

  • Ven

    I understand fully. It’s hardcore jealousy. I’m really jealous of TPG also, fly around the world trying out different first class products as your full time career.

  • http://www.CheersandGears.com Oldsmoboi

    So here’s a question: Next week I am spending $280 (before taxes) of other people’s money in a Courtyard Marriott.

    My Amex SkyBlue Preferred is offering $20 statement credit if I spend $100 at a CY Marriott.

    The value of the Amex Points I calculate out at $10.08 (2 x $280 x 0.018) + the $20 statement credit for a total of $30.08 in value.
    The value of points when using my Marriott Rewards Card I calculate out to $9.80 (2 x $280 x 0.007)

    Am I on the right track?

  • Mark Lewis

    Thanks for your efforts. I love your information. Why isn’t capital One Venture cards rated as, at least, .02 given that you get 2 pts for every dollar spend regardless of category? Just trying to understand the values.

  • Martin

    On the flip side, think of his job as something very boring, flying for 10-20 hours each time. Not my cup of tea. Even for flying, I don’t like to fly for more than 5 hours one way. However, the traveling part is fun, but not the flying part.

  • iamright

    I agree as long as the ‘conclusions’ are not biased by his ‘rewards’. The Southwest Airlines ‘conclusion’ is clearly wrong, Just wondering about the motivation.

  • Chucks

    I think you should develop some “benchmark rates” that you check using these programs monthly- you look up the price in dollars and points and give us the average as well as the high and low. For flight programs, you might use certain coach fares, JFK-LAX, ORD-MIA, and ten more booked two weeks out on the 1st of every month. For a hotel program like SPG, you might look at a dozen category 3 hotels every month booked two weeks out on the 1st of every month. If SPG is running a lucrative 50% bonus for another program, then list the value of that transfer- 1.5 AA miles, 1 AA mile= 1.7, SPG= 2.55 cents.

    None of these are perfect, but as long as you explain what you metholodogy is, we’ll have a better idea when we redeem points. The more detailed you get the more of a headache it is, but even just a smattering of data helps. Obviously you can go deeper and also list luxury redemption rates for business class, category 7 hotels, cash and points, yadda yadda, but just giving us the kind of standard fares for things most readers would otherwise be paying straight cash (and for which points can be readily redeemed) I think it gives a decent floor on redemption values.

  • ocvagabond

    Capital One is rated. All cards are valued the same, which is why there is no specificity regarding the Venture card. Earning 2 pts per dollar, doesn’t mean the points themselves are more valuable, just that you accumulate them faster. Above he values all CO points at $0.01 each.

  • Brian C. Lee

    It says what he values them at in the post.

  • Matt

    idk, in my experience SW is always 1.4-1.6. I just booked a flight this morning with rewards and got 1.6

  • ocvagabond

    Out of curiosity, what is the cause of the range on the valuation of Virgin America Elevate points? I thought these points had a fixed value since they are earned based on revenue. Are there different redemption rates depending on what class service is chosen?

    Since all their planes are the same and transcon service is the same as short haul, I never consider anything beyond standard seat with them.

  • Chucks

    The fact that fares are lower doesn’t mean the points are worth more- everytime you redeem Southwest points you’re making the calculation “should I buy this fare in cash or in points?”. If the dollar cost of a comparable fare is cheap, your points are worth less. Now, it might be useful to compare the cost of all the cheapest Southwest flights against the point costs for other carriers on the same route, but this lowers the value of all points, potentially. It doesn’t raise the value of a Southwest point.

    AA points can be used on every flight too, though redemption rates can vary. I’d say that the fact that Southwest flies so many fewer flights to fewer places also hits their availability. If I want to fly someplace Southwest doesn’t go, the redemption value is 0.

    The companion pass is valuable, but it’s exact value varies so much it’s not really computable on a way that can be generalized to everyone. IF you want to get two hard inquiries this year, spend $6k AND you have a companion AND you and the companion fly a lot of places AND these places you fly are flown together, yeah sure it can be worth a lot and effectively double the value of your award redemptions for those flights. But that’s definitely not everyone on most flights.

  • chillg8r

    I understand but it seems to me that the ability to earn the points twice as fast should be factored in if we are looking to compare incentive values. If one dollar spend gets you 2 points and 10k points still equals $100 then each dollar spent gets you 2% in rewards. Isn’t that what matters?

  • iamright

    Look at the website – it says 1.6 and you get 1.6 off the fare. Tax is computed separately and the reduced fare reduces the tax, thus you actually get more than 1.6.

  • ocvagabond

    I can earn up to 1-5x UR points from Chase. That doesn’t make the value of the Chase UR points worth 2.1-10.5 pts, it just means that I can earn up to 5x as many points per dollar spent if I maximize my earnings and use cards wisely. Seems like you are mixing up two different concepts into one.

  • josh f

    Got it, thanks!

  • Gorbal

    The article says that the values are a combination of what he would pay for points and how much value he can get from them. I can get 5 cents per point from Ultimate Rewards when I hit the right redemption, but I would never pay that amount for them, and that’s an important part of the valuation. I think 1.4 seems about right for Southwest.

  • Mark Stefan Reinoso

    so I have a questions. Im new to the site, and a lot of this makes sense, but I think a lot of you are more knowledgeable about this.

    I have an AMEX gold, AMEX platinum and a Barclays arrival and Citi AAdvantage card….

    which 2 cards should I use? I spend about 16k a month, and my company reimburses me for a lot of it.

    Im having problems deciding which ones are the best.

  • Redpanda

    Just my opinion here, the key is to pay attention to what you are purchasing. I like to target bonus point categories such as the 3x on airfare from the AMEX gold, 4.5x on groceries on the AMEX everyday or the 2x on dining and travel on the Chase Sapphire. Since most of my expenses go on travel, dining and groceries, I spend a lot on the Chase Sapphire and AMEX everyday. For all non bonus categories, I would recommend either the Arrival+ or the AMEX Starwood card. I wouldn’t spend anything on the AAdvantage card because you can earn AAdvantage miles faster on the Starwood card. So its up to your own personal expenses, if you are only stuck with those cards, then you should direct all your spending on the Arrival+ and AMEX gold. Although like i said, depending on your spending patters, there might be other cards that could help you earn more.

  • iamright

    You are all over the map. The Southwest prices are cheaper AND you get 1.6 cents per points against THE CHEAPER FARE. Thus a double dip – a cheaper fare to start with and then A PUBLISHED 1.6 Cents against the CHEAPER fare. The 1.4 cent per point that TPG quotes is JUST INCORRECT, no matter how you spin it. It is inconsistent with the value quoted on the Southwest website.

    If you don’t like Southwest because it doesn’t fly where you want to go, that is OK. The issue here is that the value quoted by TPG is WRONG.

  • Norzan

    UA 1.5 and Hyatt 1.8 with UR 2.1? lol

  • iamright

    Maybe TPG will join the discussion about the value of SW points.

    I just priced two trips on SW from LAX to Dulles, both involved one plane change.

    The more expensive trip was $348 (fare + taxes) or 21163 points plus $5.60 for security. Taking into account the taxes, this gives a value of 1.62 cents per point.

    The cheaper trip cost $183 or 10419 points plus $5.60. This calculation yields 1.71 cents per point.

    These are only two cases but I did a few more and the result was always about 1.7. Southwest applies the quoted 1.4 cents per point against the ‘fare’, but it is actually about 1.7 cents per point when you actually compute total cost vs. total points.

    TPG is rather opaque as to how he ‘computes’ (guesses) the value of points for other programs. As for Southwest, the value is not a ‘guess’, so it should be reported accurately.

  • Redpanda

    Southwest is a fixed value program. 70 points cover $1 in value which comes out to about ~$0.00143

  • Redpanda

    Virgin America points are fixed value points according to Virgin America themselves. However, just like Southwest, it is very much possible to get higher values than the ones specified

  • http://www.lmfao.sssr/ Willie The Shake Speare

    This is a very useful summary for several reasons:

    - applies a relatively standard method to computing redemption values for many programs,
    - takes into account various transfer opportunities (Chase UR, Amex MR, etc),
    - provides a summary of changes in terms and conditions that materially affect mile values.

    Can I suggest another topic:

    - provide higher-value redemption options for each program. It could go, e.g.,:

    - United: {Biz Class to Asia using partner airlines, avg redemption value is 2.2 cpm},
    - US Airways: {Off-peak Biz Class to Australia, 2.4 cpm},
    - Amex MR: {maximum historical bonus transfer of 40% to XYZ Airline, and that can be maximized at 2.1 cpm}

  • Mark Stefan Reinoso

    that makes a lot of sense, thank you. after reading this website, I realized I am cashing in my amex points wrong…I shouldn’t do it on AMEX travel, its only 1 to 1, even with the 20% rebate with the amex platinum that I have

    I wonder about the arrival card though. I know its 2x on everything, but shouldn’t put my travel on that instead of my amex? Its a credit for travel on the arrival card, so I think I would need to book it on that particular card

    I also think I am going to cancel my AADvantage card, its 450 a year, and its 1 for 1. but it is linked to usair now and last minute flights are really easy and it usually 25k points on a route I travel 1x a month (PHX to PDX)

  • ocvagabond

    Thanks. I guess I’ll have to research.

  • SanDiego007

    First, I’m relatively new to this. Second, I think this is a helpful general comparison. Thank you TPG for continuing to provide these updates.

    One thing I’ve been thinking more of lately is how to maximize my earnings based specifically on what I’m saving for. For example, when buying gas the other day, I wondered if I should use my AMEX Blue that earns 3% cash back on gas. In general, I’ve been defaulting to cash back when I can earn 3%+ (gas, dept stores, and groceries). However, say I’m specifically saving for the Andaz in Costa Rica. For the dates in which I’m interested, the cost is 15k pts or ~$600/night (I know, pricey!)… in other words, the conversion is ~$0.04/pt. That said, if I bought gas with my CSP, I would only early 1 UR pt/$. However, given I’m currently saving for this hotel on these dates, those UR pts are seemingly worth $0.04 to me (vs. $0.03 in cash from the AMEX). That all said, wouldn’t I be better off using the CSP in this particular situation? At least until I earned enough to cover my stay. Would love to get the group’s thoughts on this. Thanks guys.

  • Redpanda

    I earned 5.5x UR points on gas 6 months this year with the chase freedom and then 3x Amex points with the Everyday card the rest of the year. In general points are better than cashback

  • BobChi

    I think the key is that everyone’s valuation in every program depends on how you, specifically, are able to use the points. To me, the 1.5 cents for United is way too low, since I consistently get much more value than that on my United awards. And the differential between United and Delta (1.5 v. 1.2) is far too narrow. A MileagePlus mile is worth way more than 1.25 Skypesos. But that’s just my view.

  • Ven

    One thing I would like to see is an analysis on Value/$ Spent for everyday CC Purchases. I believe these purchases make up the bulk of our spending (I know they do for me). For example, the Club Carlson card gaves 5 points/$ spent which equals a valuation of 3 cents on your chart while the SPG card only gives 1 points/$ or 2.1 cents of valuation. Wouldn’t that mean it’s better to put everyday purchases on a CC card instead of SPG? Even if you look at hotel spend, CC gives you 6 cents while SPG gives you 4.2 cents. I know this can get complicated quickly, but I think it would be very useful information.

  • augias

    don’t forget korean air points which are worth a lot, and which can be gotten through UR points

  • John

    The dude makes over a million dollar pushing credit cards.

    He doesn’t care about you. He is a bank employee. Do you know why he cannot tell you which card to churn and which one to not churn? Because that would piss Chase off.

    Do you know why he took down ALL Chase reconsideration numbers…? Bingo, Chase told him to.

    He is peddling a few referral links, he is pushing them on a regular basis. Those links pay him big money. Don’t get mistaken, he is a credit card salesman.

  • Greg

    Point values are always skewed higher when purchasing business or first class tickets. But, for a given cache of points, I can always maximize my miles traveled by purchasing coach travel, even though the value per point is lower. For example, traveling from LAX to JFK on AA, the coach ticket costs $500 and the cost for an AAnytime award is 50,000 AAdvantage miles, so the point value is only 1 cent per mile. But to travel in First class on a two-class plane, or Business class on a three-class plane, the fare is $2,000, or 100,000 AAdvantage miles, so the point value doubles to 2 cents per point. (This example is pretty accurate for travel mid-week next month). So although the point value for Business or First class is double the value when used to buy coach, I’d rather take two trips with my cache of miles than only one. I’m willing to put up with coach accommodations, since it’s really the destination I’ m seeking. Thus, a card that gives me 2 miles for every dollar spent, such as Capital One, ends up being more valuable than a card that gives me only 1 point per dollar, even though the CapOne points are worth “only” 1 cent each.

  • Aaron

    Your comparison charts you’ve done lately are excellent! I love the visual and way it’s laid out. I process information best this way. Thank you for taking the time out to present it to us this way.

  • Andrea

    Accorhotels loyalty program is actually pretty decent value for money. For every 2000 accorhotel points you earn, you can redeem this for 60 EUR. At the fx rate to USD today of 1.29, if my calculations are correct this means that every 1 accorhotel point = 3.87 cents.

    Of course, their worldwide locations are somewhat limited but I tend to find a Novotel in all the major cities globally.

  • Daniel Tahara

    When you do your valuations, do you compute against next-best alternative (i.e. the cheapest flight you would have taken instead of the award flight) or the dollar value of the flight you ended up booking? I’m trying to calibrate my own valuations and thresholds for booking with points or dollars (using yours as the goal). Thanks!

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