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“Reader Questions” are answered twice a week by TPG Associate Editor Brendan Dorsey.

Points are a currency. They hold monetary value and can be redeemed for goods and services that you can also pay for in cash. So what happens when you owe someone points? TPG reader Dick wonders how he can “pay” someone back in points…

I owe someone 24,000 SPG points. They want me to pay them back in Hilton points, I cannot find any reasonable conversion chart. Is there one? What would be your best guess of the equal number?

TPG Reader Dick

When you’ve got two unmatched point currencies, how do you match them? Well, one easy way is to employ our monthly point valuations. TPG bases his valuations on several variables: what he would pay if he had to buy points, the overall value he can get for redeeming them and other factors like award availability, fees and change/cancellation policies. Also, just like dollars and euros, the value of points fluctuates over time, which is why TPG updates his valuations on a monthly basis.

The current monthly valuations peg SPG points at 2.7 cents apiece, while Hilton points are worth 0.6 cents each. So how do we match the two? Dick can’t just give his friend 24,000 Hilton points — that would be a horrible deal since they’re worth so much less than SPG points. Think of it like exchanging British pounds for Mexican Pesos at the airport — you’re going to get a lot more Pesos than you had Pounds.

So the way to match two incompatible point currencies is to convert each one to a cash value, then calculate each point balance to match the same cash value. For example, here’s a comparison of three different frequent flyer currencies and how many miles you would need of each to get to $100 in value.

Value Per Miles Cash Value of 10,000 points Miles Needed For $100 in Value
Alaska Mileage Plan 1.9 cents $190 5,263
American AAdvantage 1.4 cents $140 7,143
Air France/KLM Flying Blue 1.3 cents $130 7,693

Dick could “pay back” his friend using this same method. First, we can calculate that 24,000 Starpoints at 2.7 cents apiece are worth $648 in cash (since 24,000 times 0.027 is 648). Then we can divide the value of Hilton points (0.6 cents each) by $648 to get the number of equivalent Hilton points — 648 divided by 0.006 is 108,000, which is how many Hilton points Dick would need in order to be all square with his friend.

An important note is that most loyalty or bank programs won’t allow you to transfer points to different accounts (at least not without fees or unless you live together), and it’s firmly against the terms and conditions of most points programs to sell them. However, you can book a hotel in a friend’s name using your own points, which most hotel loyalty programs allow (the same is true of most airline frequent flyer programs). Also, last year Hilton introduced Points Pooling, which allows up to 10 friends to pool their points together.

Keep in mind that just because 108,000 Hilton points have the same cash value as 24,000 Starpoints (according to our valuations) doesn’t mean you’re always going to get that exact value from them. You might get more value if you convert your Starpoints to Marriott points and redeem them for a Hotel + Air package, or use your Hilton points for stays at luxury properties like the Conrad Maldives. On the other hand, you can easily get less value from points by redeeming for properties that may have low cash rates.

This isn’t the only way to “pay” people in points, but it’s a good jumping off point and hopefully you can use it to figure out a fair exchange. Thanks for the question, Dick, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured photo by Katie_Martynova/Getty Images.

Hilton Honors Aspire Card from American Express

This card is currently offering a welcome bonus of 150,000 bonus points after you spend $4,000 in the first three months.

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More Things to Know
  • Earn 150,000 Hilton Honors Bonus Points with the Hilton Honors Aspire Card from American Express after you use your new Card to make $4,000 in eligible purchases within the first 3 months of Card Membership. Plus, enjoy a free Weekend Night Reward within your first year and every year after renewal.
  • Earn 14X Hilton Bonus Points when you make eligible purchases on your Card at participating hotels or resorts within the Hilton Portfolio.
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  • Enjoy complimentary Diamond status with your Hilton Honors Aspire Card.
  • $450 annual fee.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
N/A
Regular APR
17.74%-26.74% Variable
Annual Fee
$450
Balance Transfer Fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Recommended Credit
Good,Excellent
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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.