Airline Miles are worth 1.4 cents each. A simplified approach to Reasonable Redemption Values.


One credit card offers a $500 signup bonus.  Another offers 40,000 airline miles.  Which is better?

One online portal offers 10% cash back when shopping at Macy’s.  Another offers 8X airline miles.  Which is better?


Why I care

As a blog author, I’m proud to display unbiased credit card sign-up offer rankings:

The credit cards listed on these pages are sorted by estimated first year value based on methodology described here: Credit card signup bonus estimation details.  While its easy to nitpick various aspects of the methodology, it does have one big glaring problem: the estimation makes use of my Fair Trading Prices in order to estimate the value of each point or mile.

There was a time when Fair Trading Prices were a pretty good conservative estimate of point redemption values.  But, the Fair Trading Price calculations are not based on redemption value at all.  Instead, the Fair Trading Prices are calculated by comparing points earned with the best available credit card options to standard no-fee 2% cash back cards.  If a credit card earns 2 points per dollar, then those 2 points are earned instead of 2 cents, and the Fair Trading Price is then 1 cent per point.  As new cards came out with better and better category bonuses, this calculation led to weird results such as transferable Membership Rewards points being valued at only 1 cent each while American AAdvantage miles are valued at 1.81 cents each.

As a blog author, I need better point value estimates in order to fix my sign-up offer rankings.  The AAdvantage 50K offers are good, but there’s no way they should be listed at the top of the airline card offers and business card offers as they are today.

Impossible Point Valuations

I’ve argued before that it is impossible to know what points are worth.  See: Impossible point valuations and the joy of free.  The value you get from your points and miles depends upon many factors, but mostly the value you get depends on how you use your points.  With most points & miles programs, it is possible to maximize value through certain types of awards or minimize value through others (usually the worst option for travel points is to redeem them for merchandise).  So, we can’t really assign a fixed “value” to points or miles, but we can set a target…

Reasonable Redemption Values (RRVs) Reboot

A couple years ago I began a project to estimate Reasonable Redemption Values of points & miles.  The idea was to calculate a per-point redemption value for each airline and hotel program that was reasonable to achieve.  With US Bank FlexPerks, for example, it is theoretically possible to get 2 cents per point value by redeeming 20,000 points for a flight that costs exactly $400, but it’s not reasonable.  Perhaps redeeming those 20,000 points for a $360 flight is more likely.  That would lead to a reasonable redemption value of 1.8 cents per FlexPerks point.

FlexPerks points proved easy.  Regular airline miles proved to be more difficult.  Miles can be redeemed in many different ways (domestic economy, domestic first class, international economy, international first class) and for many different routes.  I made a lot of assumptions about award availability, airfare prices, and more, and calculated what I could.  Each airline was a project that I didn’t have time for.  And each program devaluation required a new set of calculations.

I still believe the project is worth doing, but I need to drastically simplify the process.


Most of my audience is US-based.  And most credit cards and portals I write about are US based.  And, I’ve read that most US frequent flyer award redemptions are for domestic economy flights.

I don’t know the chance of finding saver level domestic award availability.  But, in my experience, I think it is reasonable to assume that a person with flexible dates and times can find saver level awards if they try hard enough.

So, here’s the simplification:  Let’s calculate a reasonable value for domestic economy awards.  We’ll call that the Reasonable Redemption Value for miles.  Yes, people can do much better by redeeming miles for international premium cabins, or for last minute flights that are otherwise outrageously priced.  But, at least we would have a conservative target value.

Reasonable Redemption Value is the value per mile at which it is reasonable to get this much value or more.


In order to assign a Reasonable Redemption Value to airline miles, I made several assumptions:

  • Most people in the US use their miles to book domestic economy flights.
  • Most frequent flyer programs offer 25,000 mile round-trip economy awards within the continental United States.
  • It is reasonable to assume that people who are flexible with their flight dates and times can find saver level awards (e.g. 25,000 mile round-trip).
  • The average domestic round-trip flight price is $361 (Found here, based on 2016 data).

Given the above assumptions, we can calculate the Reasonable Redemption Value:

  • RRV = (Average Flight Price – TSA Fee) / (25,000 miles)


  • RRV = ($361 – $11) / 25,000 miles
  • RRV = (36,100 cents – 1,100 cents) / 25,000 miles
  • RRV = 1.4 cents per mile

Note that these calculations may change going forward.  To find the most up-to-date calculations and results, please see: What are airline miles worth?


The Reasonable Redemption Value shown here applies only to the frequent flyer programs that offer 25,000 mile round trip domestic US awards.  These include:

  • Alaska MileagePlan
  • American AAdvantage
  • Delta SkyMiles
  • United MileagePlus


  • Air Canada Aeroplan (when used to fly United)
  • Avianca LifeMiles (when used to fly United)
  • Korean Airlines (when used to fly Delta)
  • Lufthansa Miles & More (when used to fly United)
  • Singapore KrisFlyer (when used to fly United)
  • Virgin Atlantic Flying Club (when used to fly Delta)

The following frequent flyer programs are not included in this calculation because they do not offer standard 25,000 mile round trip awards:

  • British Airways Avios
  • Frontier Bonus Miles
  • Hawaiian Miles
  • JetBlue TrueBlue
  • LATAM Pass
  • Southwest Rapid Rewards
  • Spirit
  • Virgin America Elevate

The above list of exceptions will each require separate assumptions and calculations.

What about award availability?

I imagine readers saying “Wait a minute! I can never find saver level awards with Delta!” or “Hold on! When was the last time you found a saver level flight on”

I wanted to include the likelihood of finding saver awards in the calculations.  I had conversations with the owners of AwardNexus and Expert Flyer (two online tools that help users find award space) to see if they had data that could be used to estimate award availability.  Both were willing to help, but neither had this data readily available.  Both suggested using their tools to estimate availability for a specified set of routes, dates, etc.

Estimating award availability would be a lot of work. And the truth is that availability changes all the time.  In order to keep the results relevant, the work would have to be re-done regularly.  And what would I do with the result?  How could I use award availability to estimate a Reasonable Redemption Value?  I had ideas, but the truth is that using that data would be complicated too.

In the end I made a practical decision.  I realized that I would never get this project done if it was dependent upon estimating award availability.  Instead, I’ll make the controversial assumption that it is reasonable to find saver level awards for domestic economy flights.  Individuals will no doubt have situations in which that assumption is not reasonable, but at least the assumption lets me move forward…

What about round trip requirements?

Some frequent flyer programs require awards to be booked round-trip.  For example, you can use Virgin Atlantic miles to book a round-trip domestic Delta flight for 25,000 miles, but you can’t book one-way for 12,500 miles.  This limits the reasonable use of these miles since round trip award availability is much harder to find than one-way.  Should I dock a programs point value as a result?  Truthfully, I haven’t decided yet.  What do you think?

What about hotel points?

This one is easy.  I’ll use Wandering Aramean’s Hotel Hustle median point values.  I previously discussed this approach here: Hotel rewards that offer the best value.

What about transferable point programs?

This is where it gets really hard!  How do we compute a Reasonable Redemption Value for points that can be transferred to many different programs?  If points can only be transferred to airline miles, should we value them at 1.4 cents each?  Shouldn’t we increase their reasonable redemption value due to the fact that many frequent flyer programs are available to choose from instead of just one?

Julian, author of our Bet You Didn’t Know series, suggested that we could increase the RRV by a small amount for each useful transfer partner.  I think that’s a good idea, but how much is the right amount to increase by?  How do we judge which partners are “useful”?

If you have suggestions, please comment below!

Please enter all required fields Click to hide
Correct invalid entries Click to hide
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

newest most voted
Inline Feedbacks
View all comments