Are points worth what they buy or what they save?


If your employer offered to pay the next $1,100 you earn in pizza, what would you say?

a pizza with pepperoni and bacon

Unless you work at a pizzeria and they’re offering to let you sell your pizza share or something, you’d probably be skeptical at best about choosing pizza over cold hard cash. Why? That’s a silly question, but the obvious answer is that you can’t pay the mortgage with pizza, you can’t buy clothes with pizza, etc. The pizza isn’t worth as much to you as cash. Choosing pizza over cash is obviously absurd.

Yet we choose to earn points over cash every time we take out a card that earns something other than cash back. It would only make sense to make that trade if you had a way to turn the pizza points into something more valuable to you. Thankfully, points can be turned into travel that is much more valuable…but how valuable? Do you base the value of your points on what they can buy you or what they can save you? It’s important to find a value, but how?

Valuing points based on what they can buy

On Tuesday, I wrote a post about why you’re better off using a cash back credit card and buying Hilton points with your cash than you are using a Hilton credit card on everyday purchases (See: Does it ever make sense to spend on a Hilton card?). In that post, I used the Conrad Tokyo as an example of a valuable Hilton redemption. The Conrad was charging over $1100 per night or that same room could be booked with 95,000 Hilton points.

  • Conrad Tokyo Cash Rate = $1,162
  • Conrad Tokyo Award Rate = 95,000 Hilton points
  • Value of Hilton points =  1.22c per point….?

Based on the numbers, this redemption yields 1.22 cents per Hilton point.

But I also noted that I don’t truly value a redemption that way since I’d never be willing to spend $1100 on a room for one night. While I didn’t say it in the post, I would be more likely to value my points based on the highest rate I would be willing to pay.

I was challenged in the comments on that post by a couple of readers. The basic premise of their argument was that the room sells for $1100 and I can use points to buy that $1100 item. Therefore, I’m clearly getting $1100 in value from the points. One reader challenged me by saying this: Suppose a particular Porsche sports car costs $100,000. Next suppose that I’m only willing to spend $30,000 on any car. Is the Porsche only worth $30,000? The argument here is that the value of the Porsche has nothing to do with what I’m willing to spend on a different product or my unwillingness to buy the Porsche. It’s still a $100K vehicle regardless.

And indulging that line of thinking for a moment, if I were able to use my $30K to buy something the Porsche seller really wanted and then trade that something for the Porsche, would I not tell all my friends about the amazing deal I got on a $100K Porsche? It certainly wouldn’t be known as my $30K Porsche. Is the room at the Conrad Tokyo any different? If I have points that the hotel is willing to accept in trade for their $1100 room, did I not get $1100 worth of hotel room for my points?

And so sprouts the argument: do you value your points based on what they can buy? I mean, we value our money based on what it can buy us, right? When the cost of living goes up, we want a raise in salary so we can continue to buy the same stuff. We choose to be compensated by our employers in money based on what that money can buy us. We wouldn’t accept less than enough to buy the stuff we want/need to buy. If we value our money based on what it can buy, why wouldn’t we value our points based on what they can buy?

Valuing points based on what they can save you

My argument in response was that I generally prefer to value points based on what they save me from spending. I’m no Scrooge McDuck, but I’d rather hold on to my money when I can.

In the Tokyo example, I said (in the comments) that I’d probably be willing to pay about $200 per night for my hotel. Using points saves me $200 per night — it keeps that money I’d have otherwise spent in my pocket.

Further, I wouldn’t buy the $1100 room because, like the pizza example at the top, it just isn’t more valuable to me than the money.

I’m not saving $1100 since that money never would have left my pocket in the first place. If my choice were to spend $1100 per night or not go to Tokyo, I’d be spending my nights at the Chateau Reyez. So while 95K Hilton points will get me a room that’s being offered for sale for $1100, I wouldn’t say I’m getting $1100 in value out of the points.

That should be obvious for a few reasons. First, I can’t buy $1100 worth of stuff with the room. I can’t pay the mortgage with a room at the Conrad Tokyo, I can’t use the room to buy clothes, I can’t pay the light bill with nights at the Conrad Tokyo. That room isn’t worth the same to me that $1100 is worth. And I’ll mention a big difference with the Porsche here: I can resell the Porsche at any time for some value. The room expires as soon as the reservation date passes (and that’s to say nothing of the logistics and viability of selling the room to another traveler, etc). Of course, you could make that type of argument about a room at any price point or extend it to any type of perishable food, etc. Is nothing in the world worth its price tag price? I’m not arguing that. I’m noting why the points aren’t worth $1100 to me. I’m not trading the points for the opportunity to keep $1100. I’m trading the points for the opportunity to keep $200. So is my value for 95K points $200?

Am I comparing apples to oranges?

Is the Conrad Tokyo room only worth what I’m willing to pay for a room at the Motel 6 in the suburbs? Does the fact that I’m a cheapskate affect the value of the room itself? That doesn’t seem reasonable. That was really the heart of the Porsche argument: it doesn’t seem reasonable for me to value A based on what I’m willing to pay for B.

But really, in my argument against overvaluing my points, I’m not even concerned with the argument as to how much the $1100 room is really worth — I’m not arguing that the room isn’t worth whatever the Conrad’s customers are willing to pay. I’m saying that it doesn’t make sense to me to value my points based on the fact that they can buy that room. I believe that for a few reasons:

  1. I can’t trade the points for $1100 and use that money freely. They are locked to (in this case) a very specific type of use: Hilton hotels.
  2. Using them doesn’t save me from spending $1100 cash since I wouldn’t have spent $1100 cash.
  3. There are cheaper alternatives I’m willing to accept in this room’s place. This goes along with #3. I’d be fine with a $200 per night room in Tokyo. If $200 is an acceptable alternative cost, it doesn’t make sense to be to value the points used at more than 5x that acceptable alternative.
  4. Valuing my points based on ideal redemptions ignores all of the times I redeem them sub-optimally. I don’t make a habit of suboptimal redemptions, but they are a reality of the game sometimes. Creating a habit of making myself overvalue points will lead to poor decisions in terms of earning them.

So do I value the points at exactly the money they saved me — in this case, $200 per night? I don’t necessarily think that’s a fair valuation, either. I’ve stayed at the Conrad Tokyo and I’ve stayed at $200-per-night hotels. The Conrad Tokyo is definitely much nicer. I enjoy staying in fancy hotels (and flying in first/business class, etc). That enjoyment factor is part of what makes this world of miles and points appealing. If I could book either the Motel 6 for $200 or the Conrad Tokyo for $200, I’d obviously choose the Conrad Tokyo. If the Conrad Tokyo were charging $250 per night, I’m sure I’d choose that over paying $200 for the Motel 6. Even if they were charging $300 per night, I’d probably make that choice over the $200 per night establishment. But what if they were offering me a special promo code for 50% off: would I spend $550 per night over spending $200 per nice at the Motel 6? I personally wouldn’t.

And so I don’t necessarily think we should value our points based on the direct alternative cost we would accept, I do believe in valuing my points more conservatively than the cash cost of the room when that cash cost is so far out of line with what I would ordinarily consider.

A good method for measuring your redemptions

Our Reasonable Redemption Values are based on the value you can reasonably expect to get for your points without too much effort at maximization. The hotel point values are based on data from about 14 months ago comparing redemption costs at a wide range of properties. (Airline values are explained here and here). That’s a good baseline for what you can expect.

In Stephen Pepper’s recent post about his best redemptions of 2018, he created a formula that makes a lot of sense to me:

Average nightly rate / net cost in points per night / Reasonable Redemption Value

In this way, we compare the per-cent value based on room rate to the Reasonable Redemption Value. I’d like to collect my points based on the RRV and then use them at better-than-RRV.

In the Conrad Tokyo example, it would look like this:

  • $1162 room rate / 95,000 points per night = 1.22c per point
  • 1.22 / 0.45 RRV = 2.71x Reasonable Redemption Value

In the case of the Conrad Tokyo, I’m getting well over the Reasonable Redemption Value in comparison to the cost of the room. That makes it a good Hilton redemption and that’s why I would consider using my points there. I’d rather get a good redemption in Tokyo than an average redemption in Fredericksburg, VA.

Measuring redemptions over valuing them

The more I got to thinking about the two sides of this argument, the more I realized that I prefer to measure my redemptions rather than value them. I prefer to earn points based on their Reasonable Redemption Value — that is to say that I wouldn’t use a Hilton card at 3x since the reasonable value for that is only equivalent to 1.35% back. I like to use my points at greater-than-RRV. I place greater emphasis on getting a good deal than I do on cash value.

The same goes for airline miles, etc. I’d like to redeem at better than the RRV and make sure that I’m earning at or better than the earn on a 2% or 2.5% cash back card.

But it bears repeating that I like to make sure I’m earning at or better than the return on a cash back card — and that to me is the danger in overvaluing points based on optimal redemptions. If I value the redemption side based on the cash cost of the room/flight, I might start fooling myself into accepting suboptimal value on the earn side with the justification that I’ll redeem for greater value.

If I begin valuing, as a different but related example, 1 Ultimate Rewards point more than 2 cents, it leads to trades on a small scale (accepting 1 point for this $1 purchase instead of 2.5 cents) that become big trades on a large scale (100,000 points instead of $2,500 cash). I might fool myself into thinking it doesn’t really matter whether I spend on a card that earns 1x or 1.5x since I’ll redeem 100,000 points at huge value either way. In reality, there is a large difference in opportunity cost. Check out the numbers:

  • $100,000 spent at 1x = 100,000 points
  • $100,000 spent at 2.5% cash back = $2,500
  • $66,666 spent at 1.5x = 100,000 points
  • $66,666 spent at 2.5% cash back = $1,666

The opportunity cost of choosing points over cash back drops significantly when you jump from earning 1x to 1.5x. To me, it’s important to keep that in mind. If I value my points based on redemptions, I might be tempted to say it’s OK to earn 100,000 points at 1x since I’m going to use them for a $10,000 first class flight. The reality is that by accepting that mentality, I accepted an increased opportunity cost to the tune of $834. In the end, my conservative slant on redemption valuation is in large part to protect myself (and readers) from justifying poor earning decisions.

Bottom line

This post doesn’t really answer the title question, and it shouldn’t. The way that I value my points and my use of those points won’t necessarily be the same as your value. That’s why we have the Reasonable Redemption Values — to give you a good idea of a reasonable value so that you can determine whether or not you’re getting a deal. I think that determination is one key, but it needs to come with a focus on making sure that your earnings aren’t coming at a higher opportunity cost than you’d like. Remember that you’re accepting a trade on the earn side: points for cash. Make sure that it’s buying you enough that it makes sense/cents.

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[…] I’ve previously debated the value of points, some readers have told me that we should value points based on cash rates. If you did that, […]


One useful way to capture the upper limit on the value of points is to ask what you would buy the points for or sell them for.

Figure out the dollar value at which you would be just as happy to have cash as the point and that is it’s value.

An example. You redeem 90,000 points for three nights at the park Hyatt Tokyo when cash rooms are selling for $1500. This is a very special redemption to you because of your obsession with Bill Murray and Sofia Coppola. If you want to test whether these points are really worth 5 cents a point to you ask yourself how much you would sell them for. What if I offered you $4,000 for them. Would you sell? If so, they are not worth $4500 to you.


I think the miles or points are worth the amount you would take if someone offered to take that award redemption off your hands for cash. Let’s say I book points for that $1,100 hotel room. If someone offered me $500 to take it from me (in a hypothetical situation where I would be free to make that exchange), I’d take the cash. $400? Who knows? But the hotel room is in any case not worth more than $500 to me, even if the sticker price is way higher.

This is not quite the same as saying it’s only worth what I’d be willing to pay, as some people reason. I doubt that I’d pay $300 out of pocket.


I had a similar discussion with another travel hacker comparing flights to vancouver for a vacation in the summer.

First to do this sort of comparison, you need to determine what your goals are and what you wouldve gone with origionally had you paid in cash with a competitor. Since I am a college student who is interested in maximizing my points, I dont care about getting a free meal or a big seat on my flight to vancouver. I just care about being able to get myself there and back saftely.

I checked some cheap flights to vancouver and I found a westjet red eye flight for $400 that fit my description, so that is what i wouldve been willing to have paid in cash to get there.

I also found I could take air canada there for 38K aeroplan points total. For my purposes I view booking a cheap flight on westjet and air canada an identical redemption since both meet my needs.

That means this $400 flight really means that I only value aeroplan miles at 1.05cpp since I could have booked the flight with cash with westjet for that approximate valuation.

This is why I “churn” travel rewards cards if I have a big trip coming up, but I mainly use cash back cards for my daily spend. Because of you compare a points redemption vs the cheapest hotel/flight you can find that will fit your needs, sometimes you wont even get 1cpp valuation.

Points are worth much less than peopke make it out to be.


I totally disagree with Nick on this and agree with the Porsche argument. I’ve often overheard someone say “my house is worth $xxx”‘ yet it sits on the market for a year or more. Why? No one else thinks it’s worth that much. Something, anything is only worth what someone else is willing to pay. Remember that a sale is a transaction between TWO parties. In the example of the Conrad Tokyo, clearly the Conrad thinks the value of that night is $1100 based on LOTS of real world data. Clearly other people think that as well. Just because you personally wouldn’t put cash out of your pocket doesn’t make that room worth less. IF the Conrad is willing to accept 95K points for that room, on that night means the value of those points IS worth $1100. My wife and I are at the at the stage in life where we don’t need “stuff” any more. We use our miles and points for travel experiences that we probably would do otherwise. I’m too cheap to spend $5-20K on a first or biz class international ticket and due to some minor medical issues wouldn’t fly international coach. Therefore we just wouldn’t go. At the moment, I’m sitting in the Presidential suite at the Park Hyatt Mendoza on 16K points/night. (We got an upgrade from the Governor’s suite which was the standard Premium suite upgrade for a Cat 2 Hyatt). The room sells for $1200/night. The room is 1600 SQ ft. Do the two of us need that. Of course not. Are we enjoying it after two long days of steaks and wine? Absolutely! Thank you Chase UR.


I’m glad to see that my comments the other day sparked a blog post and a lively discussion. Nick, I hope I didn’t come across as angry or argumentative. I think your view point is valid, especially if you are traveling as much with points as you would without and just making your travel more comfortable. For me, I probably travel 10x as much with points as I would without, so I feel like my points are really getting me close to the value my travel would cost and not just saving me some smaller amount. I wouldn’t be going to Europe, Asia, Australia or Africa in J and staying at Conrads. I’d be driving my car to Dallas, Nashville, St Louis and Kansas City and staying at a Holiday Inn Express.

Bob D

interesting topic on the arbitrary value of currency. So what your saying is the value of your points is whatever you want them to be. You value points one way when you earn them or buy them and then revalue them when you spend them. It’s a game there is no right answer


Strange that there are several Hilton properties in Tokyo for less than 95000 points (Hilton Narita 20.000 points for example) but you choose to stay at that hotel for 95000 but value it only $200. The value of something need to be daparate of what we are willing to pay for it. The value of the room is what it cost at that moment…now what you or I are willing to pay. Later today I am flying Korean First ATL to MLE…$12000 ticket booked with miles. I wouldn’t say that I am saving $12000 but I I wouldn’t say that I am saving $500 because $500 is what I would pay for an econo one way ticket to Mle. The value of the tickets is still $12000…since that is for what’s on sale now.


Thank You Nick for pointing that and sharing another point of view when earning and redeeming points.

I think the best way any points/miles blog can do is pointing out ALL view points and so people have depending on their goals all the info’s they need to do their math.

In my opinion:
For someone collecting points and miles, has to consider this a long run to redeem for maximum value, because it takes a while to collect enough for a useful redemption or the redemption would need to be done for something far out like 6months or a year (unless you get lucky or are flexible and not picky).

For someone who’d rather have cash or gift cards for flexibly use the rewards, it is probably better to go with cashback cards or high reward cards with 1:1 cash/GC redemption.

Hotel points are among the most worthless points/rewards out there, not just because of the valuation per point but because there are difficult to redeem. Other than getting the signup bonus, they are not really worth collecting. The only exception is for business if you stay for business somewhere the award game is much easier and different, then hotel points can be very valuable and get quite a return for your stays.

Guys/gals, what is your redemption goal? Depending on that goal you have to work your way backwards on what the easiest and best way is to achieve that.

You want to pay bills with your rewards? I’m sorry but that doesn’t sound like a reward to me, and sorry you have to resort to that and not getting enough money to make ends meet. But yeah it is an option although not the most fun.

You rather want to use the points/miles as much as possible? So instead of getting one business class ticket, get two economy class ticket? Or getting one week of hotel nights at an average hotel instead of only a couple nights at a fancy hotel. Sounds good to me. Still do the math if the deal is good and may not count on what it cost to get these points otherwise you burn through your signup bonus in no time.

You really want to tread yourself and have a special for you and possible your partner? Like a business class ticket and a really nice hotel, something you would never buy from your heard earned money. Sounds good to me. Just make sure you really get a good deal and are aware when points/miles are gone they are gone. Only way to get more is lots of spending or signup bonus and sign up bonus are getting harder to get with churning and/or have to wait longer.

In any case/goal don’t wait too long with the redemption, the next points/miles devaluation is just around the corner.

And yeah, I would rather jump on the Amazon deal where I get 0.5 cent per Hilton point than wait a million years to get a better redemption or to look for the best redemption. Would I do a trip to somewhere I didn’t really plan or like that much going there just to get the best redemption and pad and brag I redeemed points for multiple times of the average valuation? Nope. Would you guys/gals?


The value of points are what the average value they provide. Nobody is able to consistently redeem Hilton points for 1.22cpp. Yes, in certain sweet spots you can, but nobody in their right mind would value points on the very best redemption. It’s pretty clear Hilton are worth 0.4cpp on average, and anything better is a good redemption. As such, when Amazon allowed H points to be redeemed for 0.5cpp, I used 400K to buy $2000 in Amazon gcs. Could I get $2000 value from those points if used for hotel bookings? Sure, but I might not need to book a hotel for several years (while I constantly buy from Amazon).

Another thing that bloggers constantly forget is that points aren’t cash, and hence don’t require me to use after-tax dollars to get a room. So when you claim you’d only be willing to spend $200 cash a night, you need to add back your various taxes to get a pre-tax equivalent value. In my case, my effective tax rate is very close to 50%, so a $200 room really requires $300 of pre-tax income. Adding back taxes gives effective cost of that room and inherently makes points much more valuable…


The tax difference is an interesting twist.


Good point about the tax. Although technically you would need to pay taxes on points miles (I think TPG has an article about that) but so far IRS hasn’t enforced that.


No taxes on point/miles–they’re considered rebates.


unless T&E is a write off

Greg The Frequent Miler

You don’t have to pay taxes on points or cash back when the rewards are earned from credit cards. Both are considered rebates rather than taxable income.


Maybe, this article suggests otherwise, but as said hasn’t been enforced/followed up by IRS:


Yea u Right after Taxes as in cash so add like 20% or so to the the internet price .


The argument only holds if you are just comparing a $200 Motel 6 vs that same room on points. If you stay at Conrad and/or fly front of the plane to get there, you’re not just buying a bed or a seat. You’re buying the experience of that room… the details… the finishings. I stayed at the Conrad in FLL. The sconces in the bedroom gave off the most balanced warm light. and even the foldout sofa had a better mattress than anything you’ll find over where they leave the light on for ya.

It’s an intangible that makes you FEEL a certain way. That has value. That experience has a $1100 price tag on it. Would you use 95k points to have that experience? Then those points are worth $1100. It’s a fluctuating currency because that room may always be 95k points but the cash price will fluctuate. If you time the market, you can get a windfall. But the price is set by the seller based on what the market bears. If you value your points as equivalent to $200 cash, you must be talking about the Motel 6 points.

That said, I agree with you 100% on why you should use a 2% cashback rather than Hilton card. I thought that post was spot on and was a great insight making me rethink how my 2% card factors in my overall strategy. And you refuted a lot of the comments that totally missed the point. But I think you’re trying to have it both ways in this instance.


I 100% agree with you about the “intangible” factor of luxury rooms – when I can shut down a room’s entire lighting system from an iPad at a Waldorf Beverly Hills suite v trying to hunt down the bathroom light switch at a Microtel hovel there is indeed an emotional difference (as well as a logistical one). But also 100% disagree with you how to get there.

Because another intangible is the feeling of actually BUYING points off proceeds from a cashback card (rather than earning them for what I was going to do anyway) for cash and then not getting such a great value based on expectations. I assure you I will be a LOT more careful how I spend purchased points rather than bonus/spend points! And those very well may not involve the luxury experience you & I have apparently both grown to love. Luxury feels more luxurious when you know you have made a major score rather than actually paying(gasp!) for them.

Thank you for your comments – you highlighted well why luxury accommodations are even sought after – I, too, was just at that Conrad and could well identify.


That’s what’s I was afraid of staying in so many 4* orb 5* hotels for nothing I wouldn’t enjoy the 3* I pay for.


Legitimate question – do people actually seek to book a given room on a night when it would cost the most in cash, so that it’s worth more? Even if the room and the points cost are the same and there is no other reason to prefer personally one date over another?


Credit card companies are going to love you guys…till you value the points above the value of cash.


Do a report (cost ect) on the Bullet train while in Japan . Just watched the new ones on Ngeo ..Cheers


Like I said, I’m working on a thing to address this very question in a (hopefully) intuitive way.


With a family of 6, I do this sort of calculation all the time. It really does matter. Do I want to cash out or spend the 80K UR points I just got from a signup bonus? That’s $800. I value travel; it’s my hobby, so while I could use that cash for something else, I honestly spend about $5K+ a year on travel ($3K for a family trip and $2K for couples trips, including food and activities) and will likely use the bonus for travel either way. However, luxury travel is not set up for a family of 6. It costs a LOT of points, and 6 redemptions for F and J (not going to split- some of my kids have special needs, so having us all together is way more valuable than a lie flat seat) are very rare. That means coach for us. With fare sales, especially to Asia from LAX, it is often a way better deal to pay cash or book through the UR portal than to redeem through a mileage program. Same goes for lodging. I am looking more and more at Airbnb Gift Cards than I am hotel points for our family vacations. $126 for a 6 bedroom house with private pool in Orlando? That’s what we did this last November rather than using our Hyatt points for a Hyatt Place that slept 6… all in 1 room. I look at points as a way to either save off of what I already plan to do or to improve on what I plan to do with little extra cost.

Now, for couple trips, points allow me to do things that I really want to do but wouldn’t normally pay for out of pocket because the expense would be too much. My husband loves tropical fish. We have always dreamed of staying in the hotel with the underwater restaurant. After Nick’s post and learning that it was the Conrad Maldives, I had a very serious conversation with my husband about getting the Hilton Aspire cards. Before, I wasn’t sure I wanted to be saddled with 2 $450 fee cards. That’s $900/year! But because this is a dream vacation, and would otherwise be out of our budget, we plan to spend the money. Yes, it will come at an opportunity cost of about $3000, but it is something we really want to do, and we wouldn’t spend the $9000 it would cost out of pocket. So sometimes I look at points earnings as a way to get something expensive that I want and otherwise might not get at a significant discount. I think one of the things about points earning is that it doesn’t just save money or earn us money for the mundane things of life, but for those who love to travel, it allows us to dream. That’s why we call this a hobby. I love blogs like this because they push me to question my limits of what I think is possible and make what I thought was not attainable in my daily life a reality. I am glad Nick takes the time to reign us in and makes sure that we spending our time and money on things we value while also maximizing the monetary value. Thanks for teaching us to spend smarter on both the earnings AND redemption side.


Great for you and the kids u did Way better then we did. ,We had 8 total so There was Camping and There was Camping ..Nutthing like that today when we grew up .. CHEERs


Very well said. Would love to see the trip report at Maldives!


Very good read. I’ve done a lot of thinking on the subject; some thoughts:

I know I want to see some cities and some exotic destinations, but I just can’t get myself to spend the hundreds nightly or the thousands for the plane trips when there are cheaper destinations. I’m not talking about staying in the budget property vs. the luxury one across the street, as I generally stay in the cheapest highly-rated property in an area anyway. I’m talking destinations where I’m completely priced out – big cities where I can’t be bothered to drive in from the outskirts every day, like Chicago and LA; exotic destinations like the Maldives; faraway places like Australia; or generally pricey places like Switzerland or England (where activity costs limit my hotel budget further still). Since I’ll definitely want to gothere, and don’t want to wait for retirement to do so, I need a way to get myself to save up for them, preferably by locking away funds.

With cash back, the money is accessible, and both the earning and redemption rates are fixed. With points, it’s stashed away, you can find offers for earnings above your base rate (e.g. online portals, hotel promos), and the redemption rates are different for different options at different times.

I use the formula (best price for a property/flight that meets my standards/requirements)÷(points redemption for equivalent from Brand X) to get my point valuation for Brand X. If the property I’ve done the math for would earn me points, I account for that, too: if the brands are the same, the denominator becomes (points redemption + points I’m giving up); otherwise, the numerator becomes (price – estimated point value).

I’ve done the above for multiple brands in multiple potential vacations (that I’d actually take), then took the top quartile (25%) of the valuations. That’s become the value I use when deciding between a cashback-earning CC/transaction and a points-earning one, or between different brands’ shopping portals. The minimum point value to redeem is 10-20% less than that, because I feel I can be a bit more lenient with “free money.”

More math: cashback-equivalent earning rate of points Y transferred in the future to Brand X is (Y points earned / $) × (X:Y transfer ratio) × (X point value). This is an important one, as cashback earnings from e.g. Discover & Bank of America cards are sometimes better, sometimes worse than points earners like most AmEx and many Chase and Citi cards. If you don’t know what your points will be worth TO YOU, you might be over- or undervaluing them.

Final point: Public valuations and program reviews are all over the place. You have to figure out what each program is worth to you, at your spending level, with your travel preferences, and with the amount of work required to eek out maximum value. Are you at the tier that will multiply your earnings or redemptions? Do you have the card that allows transfers (looking at you, Citi)? Are your points worth more when used for your style of travel (Economy vs. Business, budget vs. luxury, etc.)?