Pondering Reasonable Redemption Values

Figuring out the value of airline miles or hotel points is difficult.  In fact, I’ve argued in the past that it is impossible (see “Impossible point valuations and the joy of free”).  And, so, rather than estimate the value of points and miles (except in certain specific cases such as with Southwest Airlines points, and BarclayCard Arrival points) I have previously chosen to estimate the “Fair Trading Price”.  The Fair Trading Price is an estimate of how much money a person gives up by choosing to put spend on a specific points-earning credit card rather than on a 2% cash back card.  For example, if you use a credit card that earns just one mile per dollar, then you are effectively giving up 2 cents per dollar for each mile earned.  In other words, you are unintentionally buying points for two cents each.  Similarly, if you use a credit card that earns 5 points per dollar everywhere (such as the Club Carlson Premier Rewards Visa), you are essentially buying points for .4 cents each.  I’m not saying that buying points at these rates is good or bad, I’m simply pointing out that there is a trade off between earning points and cash, and that trade-off can be used to estimate the Fair Trading Price of points and miles.


When considering buying points or miles, either directly or indirectly, Fair Trading Prices can be used as a benchmark to tell you whether the price is low or high compared to the cost of acquiring those points through daily spend.  Fair Trading Prices do not tell you, though, whether or not that purchase is a good idea.  After all, even if you can buy points for half the Fair Trading Price, there is no guarantee that you’ll actually realize much value from those points.

More and more, I think it is important to supplement Fair Trading Values with estimates of the redemption values of points and miles.  Such numbers could be used to help decide whether buying points or miles is a good idea.  And, they can be used as a target when booking awards to ensure that you get good value from those awards. 

Reasonable Redemption Values

I’m considering developing a table of “reasonable redemption values” for popular points and miles programs.  The idea would be to identify values that people could reasonably expect to get from their points.  Let’s take an example:  The US Bank FlexPerks card offers points that are worth up to 2 cents per point when redeemed for flights.  US Bank charges 20,000 points for flights costing up to $400, and 30,000 points for flights costing up to $600, and so on.  To maximize value from your points, you would have to redeem points for a flight costing as close to $400 (or $600…) as possible without going over.  Some people have mastered the art of doing this, but I think it is fair to say that most people never do.  If we assume that people, on average, will redeem for flights that are priced at the mid-point of each award tier, then we can estimate the reasonable redemption value of FlexPerk points:

Ticket Price Range

FlexPoints Required

Range Midpoint

Midpoint Value Cents Per Point

$0 to $400           20,000 $200 1.0
>$400 to $600           30,000 $500 1.7
>$600 to $800           40,000 $700 1.8
>$800 to $1000           50,000 $900 1.8
>$1000 to $1400           70,000 $1,200 1.7
>$1400 to $2000         100,000 $1,700 1.7
>$2000 to $3000         150,000 $2,500 1.7
>$3000 to $4500         225,000 $3,750 1.7
>$4500 to $7000         350,000 $5,750 1.6
>$7000 to $10,000         500,000 $8,500 1.7


The first range, above, is an outlier in that the value you would get from a midpoint redemption is only 1 cent per point.  With all other ranges, though, the midpoint delivers between 1.6 and 1.8 cents per point value.  And, the average across all ranges except for the first is 1.7 cents per point.  Therefore, I would argue that 1.7 cents per point is a Reasonable Redemption Value for FlexPoints.

Airline Miles

With the exception of fixed value programs like Southwest and JetBlue, airline miles are challenging for several reasons.  Many airlines offer region based awards in which all flights within a region or between specific regions cost a fixed number of miles.  For example, “saver level” economy round trip awards, within the continental US, cost 25,000 miles with most programs.  This is despite the fact that ticket prices between different airports in the US vary tremendously.  Those same airlines have multiple award levels.  When award seats are not available at the 25K round trip “saver” level, they might be available for more miles in a higher level.  So, one way to estimate reasonable redemption values for region based airline miles would be: 1) to estimate reasonable ticket prices for specific zone based awards (i.e. a reasonable price to pay for a continental US flight); and 2) to estimate the best award levels that are likely to be found in real life.  For example, suppose we decide that during non-peak travel dates, it is reasonable to find Delta awards at the Saver level in one direction of travel, and at the standard (mid) level for the other direction.  And, lets suppose we decide that during non peak travel times reasonable round trip flight prices are as follows:

  • US economy: $400
  • US business / first class: $800
  • US to Europe economy: $1200
  • US to Europe business: $3500
  • US to Japan economy: $1500
  • US to Japan business: $4500

(note: these are just made up for illustrative purposes). 

Given, the above information and Delta’s award chart, we can calculate reasonable values as follows:

From / To

Miles Required

Reasonable Price

Cents Per Mile

US to US Economy 32500 $400 1.23
US to US First 65000 $800 1.23
US to Europe Economy 77500 $1,200 1.55
US to Europe Business 162500 $3,500 2.15
US to Japan Economy 95000 $1,500 1.58
US to Japan Business 190000 $4,500 2.37

Please keep in mind that the table above simply represents an example of how reasonable point values might be constructed.  At this point it is just an example. Actual values in the table are likely to change and many more rows are likely to be added.  That said, the results are interesting.  We can see three groupings of reasonable redemption values:

  • Flights within the US: 1.23 cents per mile
  • International economy flights: 1.55 to 1.58 cents per mile
  • International business class flights: 2.15 to 2.37 cents per mile

As charts like this are fleshed out with more examples, it will be interesting to see if groupings like this exist across multiple airline programs.  If so, I think it would make sense to estimate reasonable redemption values in buckets like these rather than trying to combine them all into one number.

Hotel Points

Most hotel point programs classify each hotel into a category or level and they price awards based on that category.  For example, Hyatt currently offers the following award chart:


Points Required for Free Night
















We can calculate Reasonable Redemption Values by coming up with a reasonable price to pay for each hotel category.  In real life, there will be many times that hotels within those categories will cost more or less than the “reasonable price”, but we have to start somewhere.  Here are “reasonable” prices that I pulled out of thin air:


Points Required

Reasonable Price

Cents Per Point






























As you can see above, using the “reasonable prices” that I made up, Hyatt redemption values range from 1.2 to 1.5 cents per point.  In real life, I would spend more time trying to figure out the reasonable prices that drive these valuations rather than simply pulling numbers out of a hat. 

Transferable Points Programs

Programs like Ultimate Rewards and Membership Rewards, in which points can be transferred to airline and hotel programs, present a unique challenge.  We could assign Reasonable Redemption Values to these programs by calculating the values for each of their transfer partners and applying the maximum value, but I’m not sure that’s the best way to go.  On the one hand, that approach may overestimate redemption values since not all transfers are likely to be to that one partner.  On the other hand, it may underestimate redemption values since these programs give account holders the ability to cherry pick which programs they transfer points to based on their needs at the time.  I’m at a loss here about how best to approach these programs and so would probably tackle them later after calculating values for other popular bank, airline and hotel programs.

Other Factors

There are many things that affect the perceived value of an award beyond the price one would reasonably pay for the same trip.  Here are some things that drive the value downward:

  • Usually when using hotel points or airline miles for an award, you will not earn points or miles as you would with a paid trip
  • With airlines and many hotel programs, awards do not earn credit towards elite status
  • In some cases, elite benefits are not granted to those who are traveling on an award
  • Award flights and nights are often not upgradable in the ways that are possible with paid flights or nights.
  • Promotions (double miles, free breakfast, etc.) usually do not apply to award travel.

Conversely, here are some factors that make award travel more valuable:

  • Award flights often have more lenient routing rules than paid flights.  So, for example, it may be possible to visit more than one city with an award flight without increasing the number of miles required.
  • Award flights are more like refundable flights than non-refundable flights. When you cancel an award flight, you do usually have to pay a cancellation fee, but you should get all of your miles back.  Conversely, with non-refundable paid flights, at best you’ll get time-limited credit towards a future flight less the change fee.
  • Hotel award nights are always fully refundable (with no fee) whereas some hotel paid rates are pre-paid and non-refundable.
  • Trips booked with points and miles feel like they are free.  Trips booked with cash (even if that cash came from credit card rewards) do not feel free.  I believe that many people get a lot of joy (and therefore, value) from “free” points-based travel.

Since there are both advantages and disadvantages to award travel, and most of them are hard to quantify, my inclination is not to adjust the Reasonable Redemption Values up or down to try to account for them. 

Reader Input

As you can see from the examples given above, the creation of a Reasonable Redemption Values chart will be a huge task.  If I tackle this, I imagine having a series of posts in which I take on one program after another, each time incrementally building up the Reasonable Redemption Values chart.  Here is some feedback I’d like from you:

  • Is it worth it?  Will you find it valuable to have a chart of Reasonable Redemption Values to refer to?
  • Can you think of any ways to improve upon the approach to developing these values?
  • Do you know of useful public benchmarks I could use?  For example, where can I find average flight prices between various regions?  Where can I find average hotel prices for different hotel tiers?

Thanks in advance for your input!

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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46 Comments on "Pondering Reasonable Redemption Values"

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Rick I

Greg, love the idea and you are the guy to get it done. thanks for being a leader in the travel space


That does seem like A LOT of work, but I also think it would be really interesting. I can also see myself mixing and matching the entries, assuming that what you’re thinking of creating will look like the examples you have today. i.e. I’d like to fly business class, but I only value that as a certain increment over economy, let’s say $250 for an international flight, as an example. I could start with your chart, add $250 to the economy price and then divide by the miles required for business class.
That would probably make me switch to a cash back card. 🙂 Or maybe I’d go back and add another “joy of free” increment to my business class ticket value to justify spending the points on business class, since that’s what I really want to do.
The same would apply to hotel rooms… X is what a ‘good enough’ room is worth, so, if I’m redeeming for a much more luxurious hotel, I’m only getting the ‘good enough’ value plus an incremental value.
yeah, the charts sound fun!


Like the idea!

A complicating factor for me is the geographical heterogeneity of airline service. Living in a small western city served by RJs 200+ miles from the nearest hubs, I nearly always get 2.5-4 cpm US to US economy with DL or UA, but AA miles are almost worthless, since I can’t get there from here…


For FlexPoints, you should try to factor in the $25 airline allowance perk as well as the fact that you earn qualifying miles. I think FlexPoints may be the single most valuable currency for mileage runners with some type of airline status. Plus you can manufacture spend with Kiva loans and variable Visa gift cards at Kroger that earn 2x. Also I found that you can load AMEX for Target prepaid and that counts as 2x.


A tough task since sometimes a better ‘value’ may be obtained with cash and points

It’s also tough to catch all the permutations of desire as you may well get a more semi-ephemeral $ value by using miles to fly F class, but another seems more experiential value by taking 2 trips in coach instead.

Most readers of your blog are not average, at least I wouldn’t think when trying to redeem for value, if that’s the case, then putting a value in the middle only sets the bar low…sure a common bar across the board, but if you used those values to see if what you’re planning is a ‘good value’ for your points/miles, it would artificially give a false sense of ‘good value’ when deciding to book or not. Of course, not everybody books on value, they have a destination in mind and just try to do well. I lean towards having a top 10 places to go next and if a deal/great value comes up for one of them, it makes the first cut on the path to being a next trip.


Love the idea! Thanks for working so hard to take huge amounts of data and make it easily accessible.
One suggestion – what about adding another column for ‘Maximum Redemption Value’?
Some would be fixed – ex. FlexPerks at the high end of the range. Others would still be estimates, but geared at maximizing value – ex. Club Carlson max redemption value would be double using the CC Visa for 2-night stays.
I think you’re right that most travelers would be closer to your reasonable levels. But I would also guess that a large percentage of your readers are here because of the extra value you are so good at squeezing out by stacking promotions, doing lab experiments, etc.
Any other commenters out there think this would be helpful?


Hey Greg,

I like the way you approach problems like these, but I wonder if this is really worth it. What would be the goal of such a chart? Do you think it would change how most of your readers collect and/or value their points? Should it?
The question about what is reasonable is a subjective one that is different for everybody depending on their location and travel needs. Each person decides what is reasonable when booking their travel. Personally I doubt another bloggers valuations is going to change that much. Therefore, I would encourage you to focus your efforts elsewhere. It’s easy for people to say “go for it” here because they are not doing it and they like your content, but ultimately you need to decide what adds the most value to your readers. Personally, I don’t think this is it.


This is great. I just have to ask. Did you major in Econ?

Grover's Bathtub

I like the idea, but I would suggest possibly using the word typical rather than reasonable. If a typical redemption for a certain award nets 1.0 cents or less per point, it’s probably better to use those points for a different type of award and/or stop accumulating those points.


I think “reasonable redemption value”, while interesting, isn’t as accurate as asking how much money an individual take out of their poket and spend on the flight or hotel. Then, we have teh true value. People delude themselves into believing they get more value than they normally do, because they use sticker price. If you wouldn’t pay $400 cash for that round trip flight, then Delta isn’t worth 1.23.


I like the idea, but would raise a couple of points, tangential to Jonathan’s comments. if you were to do this, it would be interesting to matrix it against costs to accumulate points before and after credit card bonus. Bonuses are the easiest way to accumulate significant miles right now. They come with myriad spend and annual fee requirements. Using your FlexPerks example (I had the card recently), would justify holding points for 1.7 or 1.8 value redemption. However, the cost to obtain sufficient points for such a redemption skews the value. The 1-point-per-dollar cost to acquire points beyond the bonus makes the 1.0 redemption more attractive considering very little cost went into accumulating those points. US Bank did a good job of confining their costs (tiers and values)- a big reason I cancelled this card before paying an annual fee.


Think your analysis misses a few key ingredients – ability to scale and ability to choose programs with best value for particular destination.

No way to scale 2% to redeem F/J international in reasonable time frame. But one can earn points in several programs and combine (like DL Amex cards and MR-earning cards to transfer to DL – or UA/UR combo etc). And one can often sign up for multiple miles earning cards and/or churn them – can’t do that with cashback cards.

As such, you (and many others) make a false comparison (which is not unsurprising when the goal is to pimp cards to rubes). I’d argue 2% cashback cards value are grossly exaggerated in the real world unless you have special (and limited) needs (like live in major hubs and can take advantage of low cost flights). Using cashback cards for flights in premium cabins seems incredibly dubious. And unless you have the 2% Fidelity card, you are forced to redeem for travel (with some cards having very narrow definitions what travel is eligible).

For those interested in international F/J and want wide latitude to choose times/destinations, using miles is typically a vastly better value.

Take my upcoming trip to SFO-HKG-JNB r/t. 140K AS miles redeemed for CX F. $26K retail. Would I pay $26K? Of course not. But then I’d never fly in F either. But for $200 it cost using my AS debit card, it would be an insane choice to redeem cashback earned from a 2% card and purchase a paid ticket in any seat (let alone F). And I could have churned the BoA AS card for modestly higher cost. Or used a combination of AA/AS to redeem one ways.

As such, I don’t waste time on 2% cashback cards.


Well said, Paul!

Clearly this is a big tent, but I think the subset of folks whose goal is premium international air travel have very little use for cashback cards. Even at 5% cashback, you’d have to put $520k of spend to purchase that $26k ticket. It really doesn’t work. Points and cashback to me are disjoint spaces.

I applaud Greg for attempting to create metrics around this, but I really don’t know how much it will affect actual behavior. I look forward to the results, though!


I think it’s a good idea for people to have a benchmark when using miles/points. Power users are going to get far more value from their points than novices, especially if you bump up the 1-2 cpm valuations quote to account for changes and/or last-minute travel when revenue fares are high.

Also, IMO, only people manufacturing spend should care about the long-term % rebate, since otherwise they should always be earning the signup bonus on a succession of cards rather than a single one. The typical signup bonus / minimum spend is going to be an implied rebate of 6-10%.

Just my .02, and please keep up the good work, Frequent Miler!


Definitely a good idea, in line with the kind of insight that led you to point out that using a mile earning card equates to buying that mile for 2 cents. It will be an important way for readers to put a likely ‘Reasonable’ value received against points/miles acquisition cost, and help them determine whether they are willing to do so. It also provides benchmarks that different types of readers can use, e.g. Paul loves his international F and there will be line items that will show him which programs deliver the most of that, while others will look at the economy redemptions as a baseline and then adjust up some amount for premium cabin redemptions.

Taking into account actual award availability is important, and don’t be afraid to use your extensive anecdotal experience to make initial assumptions on that and other metrics to provide a starting point that can later be refined if strong data can be obtained.


My coworkers and I have been tracking this in an XLS for the past year to help us decide when it was worth it to use miles/points vs paying in cash. You should turn this into something similar like your LAB where users submit their redemptions. For instance, let’s pick hotels. You could have columns like Date, City, Category, Room Type, Retail cost, Cash Cost, Total cost (calculated), Points Used, and then Program Value (calculated by total cost / Points). This will then help you track over time that say Hyatt points average redemption used to be 3 cents and now it’s 1.5 cents, etc. But it will also let users see that hey a Hyatt cat 5 redemption seems to be the sweet spot for value. Just my $.02


I think it would be very worthwhile for you do make the calculations you discuss. For most people, it is tough to value the points in all the different programs, so I’d welcome it if you did the work for us.

Regarding transferable points (such as UR), I think they should always be worth slightly more than the most valuable program that they can be transferred to. Because the more flexibility you have, the more likely you are to maximize the value of each point.

For example, Hyatt points are almost always more valuable than Priority club points. But occasionally I get tremendous value out of the Priority club pointbreak awards, even more cents per point than I’d get from Hyatt points. Thus UR are more valuable than Hyatt pts because I have that option to use Priority club on those occasions when they have a better value.


While I applaud you for tackling such a formitable project I think the main reason you are having trouble getting the methodology down perfect is that your genius sub-conscious is telling you that in the end it doesn’t matter…….what matters is where you want to go and the most efficient miles/points earning methodology to get there……..ie FC Europe and then the various cities and what hotels are there so you can adjust your strategy accordingly……….the smarter bears figure out where they think they might want to go over the next few years (5 for me) and then look at the sweet spots in the award charts and then adjust from there……….it is ultimately meaningless to say to me that Hyatt is worth 2.X when there isn’t a property in the city I want……or even more mind bending is the idea that the hotel program might even dictate the additional cities that you visit on a trip………Categories more important might be:
Domestic FC
Hawaii FC
Europe FC
Maldives FC
Around the World FC (Not with you AA)
Australia FC
from my simple perspective those mean much more to me than the number of cents each mile or point is worth…..but I can certainly learn from your endeavor as you always open another peel of the onion when you blog here……..


And you would probalby show that unless you are redeeming for FC that in almost all cases the CB cards are more flexible and just as valuable……..so it has to be FC to continue the myth………


Greg–Love this idea at a theoretical levep but your model is only looking at half of the picture, at best. You really need to integrate some clever formulas that factor in the existing point balance of a person in a program and their ease of earning additional points.

Because if I have 20,000 SPG points vs 100,000 SPG points in my account I’m gonna value SPG points significantly more if I only have 20,000 and can’t easily earn more.

Conversely, say Hyatt points I can super easily earn because of a very active MS strategy or other big spending on a Chase card that offers ultimate rewards is gonna make me feel much better at redeeming Hyatt points at say 1.2-1.4 whereas if I can’t easily earn more Hyatt points because I don’t have the right Chase cards then I want to hold out for a min 2 or even 2.5 redemption value situation.

I think you really could build something cool that would helps lots of people better work out different scenarios and what is their best option (cash vs points) you just HAVE to factor in current balances and earning rate and ease of earning.

getting the most from my credit cards

The value of points will never be determined to everyone’s agreement. For me, the value of your post is to get me thinking of which points to use in my own situation rather than how others value them,.


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